Tag Archives: Mortgage Broker

Ways to Obtain a Mortgage When You’re Self-Employed

Own your own company? Find out how you could have a house too!

Data shows that almost 20% of all income earners in Canada are now self-employed. Today, lenders desire evidence of a steady income. Here are a couple of ways to ease the process and raise your possibilities of obtaining a low mortgage rate.

Document Every Penny

You’ll be required to record your income when preparing for a self-employed mortgage pre-approval. Stated Income/Stated Possession (SISA) mortgages are made without any sort of documents or bank records to verify income levels.

Keep Your Credit in Check

When it involves securing the very best mortgage rate, a good credit history and solid credit history rating will always work in your favour.

Bump Up Your Bank Account

A large down payment and hefty savings account can help encourage a lender that you’re much less of a liability when it comes to credit.

Consider a Joint Mortgage

The best way to enhance your opportunities of scoring the best mortgage rate is to take out a joint mortgage with a person who has a full-time job.

Talk to a Broker

Having a certified Canadian mortgage rate broker on your side could make a substantial difference for self-employed individuals.

Merely due to the fact that you’re self-employed does not mean you have to surrender your dream of being a homeowner. Contact FamilyLending.ca today to learn just how you could start climbing up the real estate ladder.

What are Blended Mortgages?

Blend your mortgage to improve your rate.

Quite a few people are wondering how to lower their current mortgage costs.

Generally, the mortgage penalties you incur to break your mortgage are set up as the greater of three months interest or the value of your Interest Rate Differential. If you’re going to break your mortgage, try and do it when your mortgage is sitting in the “sweet spot”– this is when your rate is not high enough to trigger IRD and thus you’re only required to pay the three months interest penalty.

Unfortunately, the sweet spot rarely comes at a convenient time. Also, most people will have trouble ever fitting into this scenario if their rate is over 4 %. If this is your situation, speak with your low mortgage rate planner about a blended mortgage. There are two options that most banks will offer:

Blend and Extend or Blend to Term

Under a Blend and Extend option, the bank will give you a brand new term at the current rate but ‘blend’ in your penalty to your new rate.

The Blend to Term option is the same idea but your term remains as is. For example, you would end up with the same two years left but at a lower rate with the penalty blended in.

If you are in that “sweet spot” a good Canadian mortgage broker will show you calculations on just how much you can save by breaking your best mortgage rate. If you’re subject to an IRD, a good planner will go over what blended options are available to you and take into account your time frame and overall goal to help you select the option that’s the best fit.

Mortgage Transfers

What you will need to know.

Are you planning to transfer your mortgage to another property? If you’re trying to sell, chances are you still have a mortgage on the home you currently own. So what happens to your existing mortgage when you want to move on from your current home and purchase a new one?

Well, the reality is you still must repay the remaining mortgage balance, and this will need to be either paid off or transferred to your new home. You will also need to consider that since you are repaying your mortgage early, if you do not have an open mortgage, you may be required to pay a prepayment penalty.

Ask Your Lender

Here’s some information you should speak with your best mortgage rate lender about:Question mark

  • What amount do I have remaining on my mortgage balance?
  • Can the buyer assume or take over my mortgage? If so, what are the requirements for the buyer?
  • Am I able to pay off the total mortgage balance? If so, is there a prepayment penalty?
  • Can you transfer this mortgage to my new property?

Sometimes your lender will waive the penalty if you or the buyer takes out a new Canadian mortgage rate with them. Getting the answers to these questions in writing will avoid any unpleasant surprises later on.

Still have questions? Not a problem, speaking with a low mortgage rate specialist can help you determine what’s best for your personal situation. It’s free and there are no obligations.

Mortgage Life Insurance

Is this coverage right for you?

Ask Your Mortgage BrokerAnother thing to take into consideration during your low mortgage rate shopping process is Mortgage Life Insurance, which is different than Mortgage Default Insurance.

What is Mortgage Insurance?

Mortgage Insurance is also referred to as mortgage life insurance and creditor insurance. In Canada, banks use post-claims underwriting for Mortgage Insurance. They only confirm that you qualify after you submit a claim.

Here are a couple of reasons why you ought to take a look at options aside from Mortgage Insurance:

  • Coverage decreases with time

While your premiums remain the same throughout of your mortgage, the coverage you’re receiving is in fact decreasing with your Canadian mortgage rate balance.

  • Coverage is not eternal

Your mortgage insurance will simply last as long as the “term” of your mortgage.

  • The lender is the beneficiary

Assuming that your claim has been approved, the lender is the recipient and the money goes straight into their pockets.

What’s the Alternative?

Another choice is to purchase Term Life Insurance. With Term Life Insurance your coverage does not decrease with time, you’re approved in advance, and the money goes straight to you.

Term Life Insurance

The most common types of term life insurance for mortgage protection are 10-year, 20-year, and 30-year terms. These products charge consistent premiums for that time period. No medical examinations in the middle, no re-qualifying, and no surge in premiums.

Life Insurance Benefits

Individual term life insurance products are not tied to your mortgage.

Name Your Own Beneficiary

Plus, the majority of term life insurance policies in Canada have what’s referred to as a conversion privilege. This enables you to trade in your term life insurance policy for a permanent life insurance policy– without a medical examination.

Other advantages of life insurance consist of:

  • Discounts are offered based on your health and your family history
  • Premiums are taxed at a much lower rate
  • Versatile– you can switch mortgage lenders and take the coverage with you if you move or you can convert a term policy into a permanent policy
  • Policy terms do not alter and in most cases the policy premiums are guaranteed

If you’re shopping for mortgage insurance, you ought to consider life insurance as an alternative option.

Shop Around

Compare life insurance rates to the mortgage insurance rates provided by your bank.

Top It Up

Think about purchasing or topping up an individual life insurance policy to cover your best mortgage rate instead of utilizing mortgage insurance.

Speak with an Expert

Speak with a licensed insurance broker, not just your mortgage broker, to get insight on coverage.

Mortgage Life Insurance

Is this coverage right for you?

Scrabble MortgageAnother thing to take into consideration during your low mortgage rate shopping process is Mortgage Life Insurance, which is different than Mortgage Default Insurance.

What is Mortgage Insurance?

Mortgage Insurance is also referred to as mortgage life insurance and creditor insurance. In Canada, banks use post-claims underwriting for Mortgage Insurance. They only confirm that you qualify after you submit a claim.

Here are a couple of reasons why you ought to take a look at options aside from Mortgage Insurance:

Coverage decreases with time.

While your premiums remain the same throughout of your mortgage, the coverage you’re receiving is in fact decreasing with your Canadian mortgage rate balance.

Coverage is not eternal.

Your mortgage insurance will simply last as long as the “term” of your mortgage.

The lender is the beneficiary.

Assuming that your claim has been approved, the lender is the recipient and the money goes straight into their pockets.

What’s the Alternative?

Another choice is to purchase Term Life Insurance. With Term Life Insurance your coverage does not decrease with time, you’re approved in advance, and the money goes straight to you.

Term Life Insurance

The most common types of term life insurance for mortgage protection are 10-year, 20-year, and 30-year terms. These products charge consistent premiums for that time period. No medical examinations in the middle, no re-qualifying, and no surge in premiums.

Life Insurance Benefits

Individual term life insurance products are not tied to your mortgage.

Name Your Own Beneficiary

Plus, the majority of term life insurance policies in Canada have what’s referred to as a conversion privilege. This enables you to trade in your term life insurance policy for a permanent life insurance policy– without a medical examination.

Other advantages of life insurance consist of:

Discounts are offered based on your health and your family history.

Premiums are taxed at a much lower rate.

Versatile– you can switch mortgage lenders and take the coverage with you if you move or you can convert a term policy into a permanent policy.

Policy terms do not alter and in most cases the policy premiums are guaranteed.

If you’re shopping for mortgage insurance, you ought to consider life insurance as an alternative option.

Shop Around

Compare life insurance rates to the mortgage insurance rates provided by your bank.

Top It Up

Think about purchasing or topping up an individual life insurance policy to cover your best mortgage rate instead of utilizing mortgage insurance.

Speak with an Expert

Speak with a licensed insurance broker, not just your mortgage broker, to get insight on coverage.