Montreal Real Estate Blog » Danuta Levitzki

The difference between pre-qualification and pre-approval?

Danuta Levitzki — Thu, 26 Jan 2012 11:30:19 +0000

Updated from our Mortgage and Financing Archives. Originally posted in March 2009

Pre-qualification is the starting point in your search for mortgage financing. A quick snapshot is taken which includes income, existing debt, savings, length of employment, etc. All of these factors will then be analyzed to determine your loan eligibility.

Pre-approval is written documentation that shows you have the support of a lender who is willing to finance you. It means an underwriter has reviewed your loan application. Based on your income, debt ratio and savings, the underwriter provides the dollar amount you are eligible to borrow. Now you can shop around for houses that fit into that loan amount category.

Here is the nice thing about the pre-approval: It gives you the leverage to shop as a cash buyer!

With a pre-approval in hand, you now have the power to negotiate.
The seller will take your offer much more seriously knowing you are already approved by a lender.
Pre-approval can also shorten the time it takes to close, making even a lower bid attractive to sellers who are seeking to move quickly.

What will my monthly payments be?

The amount of your monthly payment depends on what loan program you choose. We like to provide our clients with an easy-to-read spreadsheet that narrows their choices down and compares different loan programs that meet both current and long-term goals. You will have the opportunity to select a program you feel comfortable with before you make an offer on a home.

What does it cost to get pre-approved?

Pre-approval is FREE! You have absolutely nothing to lose and everything to gain

The Benefits of a Professional Consultant

Choosing the right lender is a key element to managing your mortgage. As a mortgage consultant, my goal is not just to provide you with a loan, but also to help select the one most beneficial to you and your long-term goals, and then, help you manage that debt over time. There are not many lenders out there who provide this type of personalized service.

My job is just beginning when your first loan closes. I will continuously monitor rates on your behalf, and stay in touch with you to make sure we remain on target with your financial goals.

Seek Pre-Approval before you begin your home search.
For a free consultation, you can contact Danuta!

Posted By: Danuta Levitzki. Executive Manager of Mortgage Agency at HYPOTHECA Ac Accredited. With over 10 year experience, Danuta specializes in residential and multi-unit mortgage financing. Offering the lowest interest rates and finest mortgage service in Montreal, Qc. For home purchase pre-qualification, mortgage refinance, renewal or debt consolidation please visit www.RateDirect.ca http://www.hypotheca.net

Understanding the Home Appraisal Process

Danuta Levitzki — Wed, 02 Dec 2009 14:30:12 +0000

Consumers are often baffled by the home appraisal process. They may feel their home is worth a certain dollar amount, and therefore, the appraised value doesn’t make sense to them. It is important to know that appraisal guidelines are dictated by the lenders.

In many provinces, the lenders must disclose the purpose of the appraisal, as each situation carries its own set of rules. In essence, lender guidelines force appraisers to put a fair market value on a home based upon comparable sales in the area where the home is located, as the home must be bracketed according to size and value.

For example:

There is no set amount associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, and the local marketplace supports the value of a pool at $15,000, that item will be bracketed as [$15,000] on the appraisal.

Upgrades can usually be expressed at full value in newer homes since they required investing additional money onto the cost of building the home. On the other hand, the amount invested in upgrading or remodelling an older home is rarely reflected in full in the final appraisal.
The reason is the home had value in its original condition, and again, the value of the upgrades must be supported by comparable examples within the same marketplace.

These comparisons must be drawn from current market activity within the last six months. Some lenders may want to look at both closed and pending sales to see if there is any room for negotiation. This is a safeguard to prevent appraisers from over-valuing the home in question.

It is further stated in the guidelines that appraisers can only place a value on homes that have status as “closed/funded transactions.” However, when property values rapidly increase within a marketplace, appraisers are generally permitted to make concessions and put more weight on the evidence provided by comparisons to pending sales and listings. This allows for a “real time” appraisal.

Although there is no formal standard to speak of, most lenders give the appraiser a 5% margin of error. If the file is reviewed and the appraiser is off by 8%, there is a good chance the value will be cut by the full 8%. It is in the best interest of both the appraiser and the homeowner not to push the value up higher than the market will support, otherwise the property evaluation may be exposed to a strict appraisal review.

As a loan executive, I make it a point to follow lender guidelines at all times, and work within the systems they provide. This promotes a good relationship with the lender, and smooth closure for my borrowers. As always, you are welcome to contact me if you have any questions.

Call me directly for a free consultation.

Faut-il verrouiller son hypothèque?

Danuta Levitzki — Mon, 28 Sep 2009 12:23:11 +0000

Les taux d’intérêts sont encore bas, mais ils augmentent régulièrement. Voici quelques conseils pour vous aider à prendre les bonnes décisions en ce qui concerne votre hypothèque.

Si vous achetez une maison, vous vous demandez peut-être s’il vaut mieux verrouiller son hypothèque à un taux fixe, (si les taux continuent à monter) ou choisir un taux variable qui fluctue avec le taux de base. De même, si votre hypothèque existante est à taux variable, il serait peut-être temps de la verrouiller.

Les taux hypothécaires sont difficile à prévoir. Il est préférable de prendre sa décision par rapport à sa situation personnelle plutôt que sur des spéculations économiques.

Taux variable

Les hypothèques à taux variables sont attractives car les taux d’intérêts sont plus bas que pour une hypothèque à taux fixe de même montant et de même durée.

Si vous avez une hypothèque à taux variable les montants à payer varieront également. Ou, avec des paiements fixes, la portion du paiement qui couvre votre hypothèque fluctuera.

Avec les taux d’intérêts qui baissent, votre principal sera plus important mais vous paierez moins d’intérêts.
Mais si les taux grimpent votre principal diminuera et vous mettrez plus de temps pour payer votre maison.

Devez-vous prendre une hypothèque à taux variable? Si vous pouvez gérer le stress de l’incertitude, le taux variable peut vous faire économiser de l’argent à long terme.

Taux fixe

Si vous avez une hypothèque à taux fixe, le taux d’intérêt sera plus élevé qu’une hypothèque à taux variable. Par contre l’avantage c’est que votre taux est fixe pour toute la durée de votre hypothèque.

Même si les taux généraux augmentent, votre taux reste invariable. Au moment ou vous signez votre contrat à taux fixe vous savez exactement ce que vous aurez à payer et combien il restera à payer..

Devez-vous prendre une hypothèque à taux fixe? Si les fluctuations des taux vous créent des insomnies il vaut mieux le faire pour dormir en paix!

Votre décision

Finalement , la décision est un choix personnel comme le fait de choisir votre maison.
Chaque individu est unique et particulier, et cette décision devrait toujours faire l’objet d’un avis donné par un professionnel.

Pour toutes questions concernant le financement hypothécaire, taux d’intérêts, programmes etc….veuillez contacter: Danuta 1-800-605-6154

Know the Score: Three Steps to Better Credit

Danuta Levitzki — Mon, 20 Jul 2009 12:35:30 +0000

If you are looking to buy, invest in, or obtain a better rate on your current mortgage now or in the coming months, your credit is going to play a more significant role in today’s tight-fisted credit environment than it has in the past. It’s that simple. Would-be borrowers need to address any and all credit issues now to avoid having to pay for it later.

But, here’s the kicker: a great number of all credit reports contain errors of some kind. The credit reports contain mistakes so egregious that applicants could actually be denied credit! Don’t let this happen to you.

Step One: Get Your Report

The main credit bureau Equifax is required by law to provide you with a free copy of your credit report.

To request your free copy visit http://www.equifax.com/contact_us/en_ca or call 1-800-465-7166. (Note: free credit reports do not include credit scores. Scores can either be purchased online or pulled by your mortgage professional.)

Step Two: Report Inaccuracies

Study your credit reports and make sure everything is accurate. If you do find any discrepancies, you can legally dispute mistakes or outdated items for free. Once notified of a mistake on your report, a credit bureau has thirty days to investigate and respond. If the information can’t be confirmed, then the item should be removed. (If you’d like more information on this process, give me a call at my office at 514-803-9764 and I will send you our Sample Dispute Letter to help get you started).

Step Three: Meet With Your Mortgage Professional

Now that the information on your report is accurate, what if there are still some items in your credit history you would rather forget about? All is not lost. For some, small changes to your credit profile could yield big results that could save you thousands of dollars. For others, enlisting the services of a professional credit improvement company may be required. This important process can take up to six months or more so don’t wait. Give me a call. As an experienced mortgage professional I can share other insights into the ins and outs of credit scoring and credit repair.

Stay tuned for more valuable credit tips.

STOP Paying Your Landlord’s Mortgage!

Danuta Levitzki — Mon, 13 Apr 2009 13:16:58 +0000

Lets begin this article by stating: Renting is wasting money!

All those payments you’ve made at the end of each month, you will never see them back again. Ever.
But your landlord will, once he/she decides to sell the property.

If you remain a tenant, you are making your landlord rich, but you do nothing for yourself. But if you put those exact same dollars into a house payment instead of rent, you create “equity”…value that you own, that later can send your children to college, finance the start-up of your own business, or pay for your retirement.

For example:

If you are currently paying $1,000 a month for rented housing, then over the next three years, your landlord will effectively have reaped $36,000 of your hard earned cash! You’re paying his mortgage when you could be building equity in your own property.

What if I don’t have the money to buy a home right now?

There are many loan programs available that offer low and no down payment options. Some programs permit gift money as a down payment, and often sellers are willing to make a contribution to your purchase if they want to sell the home quickly. On top of that, the city of Montreal offers a Home Ownership Program that provides financial assistance to help first-time buyers.

Become your own landlord and build up future financial security. I’ll even show you easy strategies to speed up the pay-off of your home without making extra payment.

Call me to discuss your specific needs and we’ll find the program that’s right for you. We have a variety of low down payment and no down payment programs available.

How Purchase Loans Are Made

Danuta Levitzki — Mon, 02 Feb 2009 14:40:23 +0000

A Step-By-Step Walkthrough

1 Loan Application and Pre-Approval – Lenders are encouraging buyers to get pre-qualified for a mortgage even before they begin looking for a house. This way, buyers know ahead of time how much house they can afford.

2 Loan Search – Although buyers often use a lender recommended by their Real Estate agent, some prefer to do their own comparisons. Borrowers may choose to contact a mortgage broker who has access to a wide variety of loans.

3 The House Hunt – At this point, the buyer begins shopping for a house. When the right one is found, the terms of the sale are negotiated, including the sale price and often the type and conditions of the loan being sought.

4 Documentation – It is crucial to supply the lender with copy of Promise to Purchase, Annexes, Counter Offers and all other paperwork supporting the application.

5 Loan Review – The loan package with all pertinent information is to be sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.

6 Appraisal – Lenders may require an appraisal on home sales not insured by CMHC. This step could jeopardize a deal if a big discrepancy were to exist between the home’s sale price and appraised value.

7 Underwriter’s Review – Based on the information put together by both the loan advisor and the processor, the underwriter makes the final decision on whether a loan is approved.

8 Mortgage Insurance - Lenders require mortgage insurance with CMHC or Genworth or AIG when borrowers put down less than 20 percent on a loan. Even if a loan meets the standards of a lender, a mortgage insurance company could choose to deny coverage. This law does not apply to subprime lending.

9 Title Search – This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.

10 Insurance – Lenders require fire and hazard insurance on the replacement value of the structure.

11 Signing – Final loan and documents are signed at the notary office.

12 Funding – The lender sends a wire or check for the amount of the loan to notary.

13 The Buyer Begins Making Mortgage Payments.

Written by Danuta Levitzki. Conseillère en Financement Hypothécaire | Mortgage Loan Specialist
For current interest rates or to get more information on mortgage financing feel free to visit her website or call direct at 1-800-605-6154.

Credit: Biggest Myths, Mistakes, and Misconceptions

Danuta Levitzki — Mon, 19 Jan 2009 14:42:23 +0000

Good credit is well worth the effort it takes to both achieve and preserve it. If you have good credit, the following tips will help you keep it that way. If you are looking to improve your credit, however, now is the time to get started.

Give us a call. We’ll review your credit and find out exactly where you stand. In the meantime, if you plan on entering into a loan transaction in the next 6 to 12 months, you simply cannot afford to make the following credit mistakes:

Don’t fall behind on existing accounts. This includes your mortgage and car payments. One 30-day late can cost you anywhere from 30-75 points.
Don’t pay off old collections or charge-offs during the loan process. Paying collections will decrease your credit score immediately due to the “date of last activity” becoming recent. If you want to pay off old accounts, do it through closing, and make sure that
1) you validate that the debt is yours, and
2) the creditor agrees to give you a letter of deletion.
Don’t close credit card accounts. If you close a credit card account, it will appear to FICO/BEACON that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure that it is an account you’ve opened more recently.
Don’t max out or overcharge your credit accounts. This is the fastest way to bring about an immediate drop of 50-100 points in your credit score. Try to keep your credit card balances below 30% of their available limit at all times during the loan process. If you decide to pay down balances, do it across the board. Meaning, make an extra payment on all of your cards at the same time.
Don’t consolidate your debt onto 1 or 2 credit cards. It seems like it would be the smart thing to do; however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above. If you want to save money on credit card interest rates, wait until after closing.
Don’t do anything that will cause a red flag to be raised by the scoring system. This would include adding new accounts, co-signing on a loan, or changing your name or address with the bureaus. The less activity on your reports during the loan process, the better.
Don’t do it alone. If you feel that the credit challenges you’re facing are too much, or you don’t have enough time to do the work necessary to improve your own credit, don’t lose hope and give up.