For self-employed Canadians, securing a mortgage can feel like navigating a maze. While traditional employees often have straightforward paths to homeownership, self-employed individuals face unique challenges. These hurdles can be addressed with proper preparation, an understanding of the process, and collaboration with the right mortgage professionals. Here’s a comprehensive guide to help you understand what to expect and how to overcome obstacles.

Why Mortgages Are More Challenging for the Self-Employed

Lenders view self-employment as a higher risk than salaried positions. Income for self-employed individuals is often variable, making it harder to guarantee consistent payments. Additionally, tax write-offs, while reducing taxable income, can lower the figure lenders use to assess borrowing potential.

Common Challenges:

1. Variable Income Streams: Unlike salaried employees, self-employed borrowers often face fluctuations in income.
2. Tax Deductions: Writing off business expenses reduces taxable income, which can make you appear less creditworthy.
3. Limited Employment History: Lenders typically prefer at least two years of consistent self-employment income.
4. Higher Down Payments: Without traditional income verification, lenders may require larger down payments to offset perceived risks.

Essential Documents for Self-Employed Mortgage Applicants

Documentation is crucial when applying for a mortgage. Lenders rely on thorough records to assess income stability and financial health. Here’s a breakdown of what you’ll need:

Proof of Income

1. Personal Tax Returns (2–3 Years): These provide insight into consistent earnings.
2. Notice of Assessments (NOAs): Issued by the Canada Revenue Agency (CRA), these confirm income and taxes paid.
3. Business Financial Statements: If applicable, these validate your business’s financial health.

Proof of Stability

1. Business License or Articles of Incorporation: Verifies legitimacy and longevity of your business.
2. Client Contracts or Letters of Engagement: Demonstrates ongoing work and future income potential.

Creditworthiness

1. Credit Report: A strong credit score is vital. Aim for 680 or higher for better rates.
2. Bank Statements: Typically, lenders ask for six months of statements to verify savings and cash flow.

Strategies to Secure a Mortgage as a Self-Employed Individual

While challenges exist, strategic preparation can significantly improve your chances of approval. Here are practical tips:

1. Maintain a Strong Credit Score

Your credit score plays a pivotal role in determining mortgage eligibility and interest rates. Pay bills on time, minimize debt, and regularly check your credit report for errors.

2. Organize Your Finances

Keep detailed and organized records of all income and expenses. Use accounting software or work with a professional accountant to ensure accuracy and readiness.

3. Show Consistent Income

Aim to demonstrate at least two years of steady or growing income. Avoid excessive tax write-offs during this period to present a more robust financial picture.

4. Save for a Larger Down Payment

Saving for a down payment of 20% or more can make lenders more willing to work with you, as it reduces their risk.

5. Consider Alternative Lenders

If traditional banks are hesitant, explore private lenders or credit unions. These lenders may have more flexible requirements but often charge higher interest rates.

6. Work with a Mortgage Broker

Mortgage brokers, such as GLM Mortgage Group, specialize in helping self-employed individuals navigate the complexities of home loans. They have access to various lenders and can guide you toward tailored solutions.

Benefits of Using a Mortgage Broker

Self-employed individuals often benefit greatly from working with a mortgage broker. Here’s why:

1. Access to Diverse Lenders: Brokers have relationships with lenders who cater specifically to self-employed borrowers.
2. Expert Advice: They understand the nuances of self-employment income and can present your case more effectively to lenders.
3. Time Savings: Instead of approaching multiple banks, a broker does the legwork for you.
4. Negotiation Power: Brokers can secure competitive rates and terms on your behalf.

Why Choose GLM Mortgage Group?

Known for their personalized service and expertise, GLM Mortgage Group specializes in assisting self-employed Canadians. Their team understands the unique challenges you face and is committed to finding solutions that work for you.

Government Programs for Self-Employed Borrowers

In Canada, several programs can make homeownership more accessible for self-employed individuals:

1. The First-Time Home Buyer Incentive

If you’re buying your first home, this program offers shared equity with the government, reducing your monthly payments.

2. The Home Buyers’ Plan (HBP)

Allows you to withdraw up to $35,000 from your RRSP to use as a down payment.

3. Self-Employed Borrower Program

Offered by many lenders, this program caters specifically to self-employed individuals, using a broader assessment of income.

Tips for Successful Mortgage Approval

1. Plan Ahead

Start preparing at least a year before you apply. Organize your finances, reduce debt, and save aggressively for a down payment.

2. Be Transparent

Lenders appreciate honesty. If your income fluctuates or you’ve had financial challenges, provide context and explain your stability.

3. Use a Co-Signer

If you’re struggling to qualify on your own, a co-signer with strong credit can strengthen your application.

4. Explore Green Mortgages

If you’re considering an energy-efficient home, green mortgages may offer favorable terms for eco-friendly properties.

Overcoming Challenges with Professional Guidance

While securing a mortgage as a self-employed individual requires extra effort, the reward of homeownership makes it worthwhile. By preparing thoroughly and partnering with the right experts, such as GLM Mortgage Group, you can achieve your dream of owning a home.

Final Thoughts

The path to homeownership for self-employed Canadians may be less conventional, but it’s certainly achievable. Understanding the requirements, staying organized, and leveraging professional help will set you on the right track. With dedication and the right support, your entrepreneurial spirit can lead to a successful mortgage journey.

For tailored mortgage advice, reach out to GLM Mortgage Group, and take the first step toward securing your dream home today!

The post Navigating Mortgages for Self-Employed Individuals appeared first on GLM Mortgage Group.

In a monumental shift aimed at making homeownership more accessible for now and the future, the Canadian government and the Office of the Superintendent of Financial Institutions (OSFI) have recently introduced sweeping reforms to the nation’s mortgage rules. These changes include an end to stress testing for certain borrowers and the introduction of a 30-year mortgage amortization for first-time buyers and purchasers of new homes, among other updates. While these policy adjustments signify progress, understanding how to leverage these new opportunities best is essential. GLM Mortgage Group, a top mortgage advisory service, is here to help Canadians make the most of these unprecedented changes.

This blog delves into two major announcements: OSFI’s elimination of the stress test for lender switching and the federal government’s recent expansion of mortgage amortization and price caps. We’ll explore how these changes impact Canadian homebuyers and highlight how GLM Mortgage Group can support you through this evolving landscape.

1. OSFI’s Stress Test Removal: A New Dawn for Borrowers

Historically, Canada’s stress test required borrowers, including those switching lenders at the time of mortgage renewal, to qualify at a higher interest rate, usually the greater of 5.25% or their contract rate plus 2%. This requirement was often seen as a barrier for borrowers looking to find competitive rates, especially with alternative lenders. In response to mounting industry feedback, OSFI announced it will eliminate the stress test requirement for borrowers switching lenders at renewal—meaning that as long as the loan amount and amortization schedule remain unchanged, borrowers can bypass this extra hurdle.

How This Affects Canadian Homeowners

With the stress test no longer applied during lender switching, homeowners will have more flexibility to shop for better rates when renewing their mortgages. This not only boosts market competition but also gives borrowers the power to secure more favorable terms without the fear of requalification.

2. Federal Reforms: Expanding Amortization and Price Caps

In addition to OSFI’s stress test announcement, the federal government has rolled out significant mortgage rule amendments, effective December 15, 2024. Here’s a quick overview:

• 30-Year Amortization for New Builds and First-Time Buyers: As of August 1, 2024, first-time buyers and Canadians purchasing newly built properties now have the option for a 30-year amortization on insured mortgages. This reform allows buyers to reduce their monthly payments, offering much-needed relief amid Canada’s high housing costs.
• Increase in Insured Mortgage Cap: To reflect current housing market realities, the government has raised the insured mortgage cap from $1 million to $1.5 million. This increase, effective December 15, 2024, allows more Canadians to qualify for insured mortgages, which require smaller down payments (below 20%) and generally offer better interest rates.

These changes are designed to make homeownership more achievable, particularly for younger generations and first-time buyers, and contribute to the government’s ambitious goal of constructing nearly 4 million new homes.

GLM Mortgage Group’s Take on the Reforms

GLM Mortgage Group welcomes these amendments as an important step forward for Canadians. As a client-centered mortgage advisor, GLM can guide clients through these new opportunities and help them navigate the mortgage market. These updates, especially the 30-year amortization and raised price cap, provide substantial new options for first-time homebuyers—a demographic often challenged by affordability issues.

Why Working with GLM Mortgage Group Matters

Navigating the mortgage landscape can be complex, especially in light of these new regulations. GLM Mortgage Group offers expert advice and personalized support to make the most of these changes. Here’s how we help:

1. Expertise in Mortgage Switching and Rate Negotiation

With the stress test requirement lifted for lender switching, now is the perfect time for borrowers to assess their options. GLM Mortgage Group’s team can help clients find the best rates and terms when switching lenders, ensuring they maximize their mortgage savings. Our expertise in negotiation and our relationships with various lenders allow us to secure the most favorable rates for our clients.

2. Guidance on Insured Mortgage Options and the New Cap

The increase in the insured mortgage cap from $1 million to $1.5 million provides significant new opportunities for buyers in high-cost areas. GLM Mortgage Group understands the nuances of insured mortgages and can guide clients through the qualification process. We help clients understand their down payment options and tailor solutions to meet their needs, even in competitive markets.

3. Support for First-Time Buyers and 30-Year Amortization Planning

One of the most exciting aspects of the recent reforms is the extension of the 30-year amortization to first-time homebuyers and new-build purchasers. GLM Mortgage Group specializes in helping first-time buyers navigate the mortgage process and can assist them in taking advantage of this extended amortization period, which lowers monthly payments and reduces financial strain.

Additional Federal Measures Supporting Buyers and Renters

Alongside the mortgage rule changes, the government has introduced the Canadian Mortgage Charter, Renters’ Bill of Rights, and Home Buyers’ Bill of Rights to make housing more fair and transparent. These initiatives aim to create a more level playing field for buyers and renters alike by:

• Allowing Insured Borrowers to Switch Lenders without a Stress Test: With the Canadian Mortgage Charter, insured borrowers now have the freedom to switch lenders at renewal without requalification, fostering competition and potentially lowering rates.
• Renters’ and Home Buyers’ Rights: These blueprints are designed to increase transparency, curb unfair practices, and provide broader protections for both renters and buyers across Canada. In collaboration with the provinces, the federal government plans to implement protections against evictions, standardize lease agreements, and require the disclosure of price histories, which ultimately contribute to a more balanced housing market.

GLM Mortgage Group: Your Partner in Homeownership

In a rapidly changing mortgage landscape, having a trusted partner like GLM Mortgage Group is essential. As a top mortgage brokerage in British Columbia, we are committed to helping Canadians navigate these reforms, whether it’s securing a mortgage, switching lenders, or making the most of the new amortization options. GLM Mortgage Group provides:

• Personalized Mortgage Planning: We take time to understand our clients’ unique financial situations and help them find the best mortgage options that align with their long-term goals.
• Access to Diverse Lending Options: GLM’s extensive network includes banks, credit unions, and private lenders, giving clients access to a range of products tailored to their needs.
• Step-by-Step Guidance: From initial consultation through closing, we ensure clients feel supported and informed, making the home-buying process smooth and stress-free.

Final Thoughts

These recent changes signal a promising shift in Canada’s mortgage policies, offering hope to aspiring homeowners facing affordability challenges. For Canadians ready to buy, switch lenders, or explore new builds, GLM Mortgage Group provides the knowledge and support necessary to navigate these changes effectively. Contact us today to discover how we can help you make the most of Canada’s new mortgage landscape and achieve your homeownership dreams.

In Part 2, we’ll explore further government initiatives and additional support measures designed to help Canadians attain and maintain homeownership. Stay tuned!

The post Navigating Canada’s New Mortgage Reforms with GLM Mortgage Group: Part 1 appeared first on GLM Mortgage Group.

Investing in real estate can be a rewarding yet complex process you go through. Whether you’re diving into rental properties, flipping houses, or purchasing a vacation home, making informed decisions is key to success. That’s why surrounding yourself with a team of experts is crucial. Among the most important team members for real estate investors are a skilled lawyer and a knowledgeable mortgage broker. These professionals bring specialized expertise to your ventures, helping you mitigate risks, navigate legal complexities, and seize the best financing opportunities.

In this blog, we’ll explore the powerful roles that lawyers and mortgage brokers play in real estate investment ventures and why their guidance is essential for long-term success.

Building Your Power Team

Real estate investment isn’t just about finding the right property; it’s about assembling a team that can guide you every step of the way. A successful team often includes a mentor, an accountant, a realtor, a home inspector, a lawyer, and a mortgage broker. Each professional brings unique knowledge to the table, helping you optimize your investment strategy.

In past discussions, we’ve highlighted the role of mentors and accountants in real estate ventures. Now, let’s shift the spotlight to two equally critical members of your team: the real estate lawyer and mortgage broker. Both professionals serve distinct but interconnected roles that can make or break your investment outcomes.

The Critical Role of a Real Estate Lawyer

One of the first steps in any real estate transaction should be securing a competent lawyer. A real estate lawyer ensures that every legal detail of your investment is properly managed, protecting you from unforeseen complications down the line. But their role goes far beyond simple contract reviews.

Legal Expertise and Compliance

A lawyer helps you navigate the often-complex web of regulations, local bylaws, and real estate laws that govern property investments. In provinces like British Columbia, where regulations can vary depending on the type of property and its location, having a lawyer who understands these nuances is invaluable. For instance, a lawyer familiar with Vancouver’s real estate market would be able to alert you to zoning restrictions, property disputes, or future urban development plans that might impact your investment.

In real estate, compliance isn’t optional. Failing to comply with local and provincial laws can result in hefty fines or legal disputes. Your lawyer ensures that you stay compliant, protecting your investment from unnecessary risks.

Risk Mitigation and Due Diligence

Beyond legal compliance, a lawyer’s job is to minimize risk. They conduct thorough due diligence, investigating the property’s legal history, title, and any potential liabilities attached to it. This process is essential in preventing costly surprises, such as discovering outstanding liens on the property or boundary disputes with neighboring properties.

If you’re investing in rental properties, a lawyer can also help you navigate landlord-tenant laws and ensure that your lease agreements protect your interests while complying with provincial legislation.

Dispute Resolution

Even the most well-researched investments can run into disputes, whether it’s with tenants, contractors, or even government authorities. A skilled real estate lawyer is adept at resolving these conflicts through arbitration or mediation. Having an expert who can guide you through these processes ensures that you reach favorable outcomes without dragging the issue through lengthy and expensive court battles.

The Essential Role of a Mortgage Broker

While a lawyer protects you from legal pitfalls, a mortgage broker ensures that your financing aligns with your investment goals. Mortgage brokers serve as intermediaries between borrowers and lenders, offering invaluable advice on securing the best loan terms and ensuring that your investments are financially viable.

Access to Multiple Lenders and Products

Unlike traditional banks, which offer a limited range of mortgage products, mortgage brokers have access to a vast network of lenders. This includes major banks, credit unions, and private lenders, which can be crucial when looking for a loan that fits your specific needs, especially in markets as dynamic as British Columbia’s.

For instance, if you’re looking to purchase a rental property, a mortgage broker can identify lenders who specialize in financing multi-family properties or provide flexible terms for investors. They also help you compare interest rates, loan structures, and hidden costs, ensuring that you get the best possible deal.

Market Insight and Strategic Advice

Mortgage brokers don’t just secure financing; they also offer invaluable insights into the real estate market. They can advise you on which areas are likely to experience property value appreciation, helping you make informed investment decisions. In a competitive market like Vancouver’s, where properties can fluctuate in value rapidly, having a mortgage broker who understands the market trends can give you a strategic advantage.

A broker can also guide you through different financing options, such as second mortgages, refinancing, or leveraging equity from existing properties to fund new investments. Their expertise in creative financing solutions can help you grow your portfolio faster while minimizing out-of-pocket expenses.

Time Savings and Convenience

The real estate investment process is time-consuming, especially when it comes to securing financing. Mortgage brokers streamline this process by handling negotiations with lenders, gathering the necessary documentation, and ensuring that you meet the requirements for loan approval. This allows you to focus on your investment strategy rather than getting bogged down in paperwork.

Working with a mortgage broker not only saves you time but also increases your chances of securing the best financing deal. Their industry connections and knowledge can help you navigate the mortgage approval process with ease, even if you have a complex financial situation.

Combining the Expertise of Lawyers and Mortgage Brokers

When a lawyer and mortgage broker work together on your behalf, the results can be transformative. The lawyer ensures that your legal rights are protected, while the mortgage broker secures financing that aligns with your investment goals. Together, they help you maximize your returns while minimizing risks.

For example, if you’re purchasing a property that requires significant renovations, your lawyer can ensure that the sale contract includes provisions for any necessary repairs or zoning adjustments. At the same time, your mortgage broker can secure financing that accounts for these additional costs, perhaps through a construction loan or other tailored mortgage products.

In cases of refinancing or taking out a second mortgage, the synergy between these two professionals becomes even more critical. A lawyer can advise you on the legal implications of refinancing, while the mortgage broker helps you find the most favorable terms. This combined expertise ensures that you’re making financially sound decisions that align with your long-term investment strategy.

Conclusion: Maximizing Real Estate Success

Entering the real estate market for investment purposes requires more than just a keen eye for properties. To succeed, you need a team of professionals who can guide you through every step of the process. A competent lawyer protects your legal interests and mitigates risks, while an experienced mortgage broker helps you secure the best financing and navigate the real estate market with confidence.

At GLM Mortgage Group, we understand the importance of these roles in real estate success. Whether you’re a first-time investor or a seasoned pro, our team is here to provide the expertise you need to achieve your goals. Contact us today to learn more about how we can help you succeed in your real estate ventures!

The post Real Estate Success: The Power of Lawyers and Mortgage Brokers in Investment Ventures appeared first on GLM Mortgage Group.

As Canadians continue to grapple with the fastest rising interest rates in over four decades, the prospect of renewing a mortgage can be overwhelming. With experts warning of potential increases of 30 to 40 percent in monthly payments upon renewal, it’s essential for homeowners to be informed and proactive. Whether you’re among the 3.4 million Canadians set to renew their mortgages by the first quarter of 2025 or part of the 80% whose mortgages will renew by 2026, understanding your options is crucial.

Understanding Mortgage Renewal in a Changing Landscape

Renewing your mortgage is a significant financial decision that requires careful consideration, especially in today’s rising interest rate environment. Financial institutions like Valley First, a Division of First West Credit Union, stress the importance of being well-informed. Char Oakley emphasizes the need for Canadians to know where rates stand and to consider their long-term plans for their property.

With financial experts predicting substantial increases in monthly payments upon renewal, it’s more important than ever to explore all available options. Ron Butler, host of the podcast Angry Mortgage, highlights the sheer volume of mortgages up for renewal, emphasizing the financial strain many Canadians may face.

Top Tips for Mortgage Renewal Success

Here are some key strategies to consider when approaching your upcoming mortgage renewal:

Start Early:

Don’t wait until the last minute to explore your options. With rising interest rates, being proactive can significantly impact your ability to secure the best possible rate and terms for your mortgage renewal. Begin researching your options at least 120 days before your maturity date. This ample time frame allows you to thoroughly evaluate different lenders, compare rates, and understand the terms of various mortgage products. By starting early, you avoid the pressure of making rushed decisions and have the opportunity to make a well-informed choice that aligns with your financial goals and circumstances.

Negotiate for Better Rates:

When it comes to mortgage renewal, never settle for the rate offered on the renewal slip without exploring your options. Many borrowers overlook the potential savings that come from negotiating for better rates with their current lender or exploring offers from other lenders. By actively seeking out competitive rates and terms, you can potentially save thousands of dollars over the life of your mortgage. Remember, lenders are often willing to negotiate to retain your business, so don’t hesitate to advocate for yourself and secure the best possible deal.

Consider Your Financial Goals:

Before committing to a mortgage renewal, take the time to assess your current financial situation and future plans. Consider factors such as whether you anticipate downsizing, relocating, or accessing equity in the near future. Understanding your long-term financial goals and objectives is essential in choosing the right mortgage product that aligns with your needs. Whether you prioritize stability, flexibility, or affordability, tailoring your mortgage renewal to your specific goals ensures that you make a decision that serves your best interests both now and in the years to come.

Explore Refinancing Options:

In a rising interest rate environment, exploring refinancing options can be a strategic way to mitigate the impact of higher rates on your monthly payments. Refinancing your mortgage or opting for a blend and extend strategy allows you to access lower rates or extend your term, thereby reducing your monthly payments and improving your financial flexibility. By refinancing, you can potentially lower your overall borrowing costs and better manage your budget in the face of increasing interest rates. Consider consulting with a mortgage broker like GLM Mortgage Group to explore refinancing options tailored to your unique financial circumstances.

Seek Expert Advice:

Navigating mortgage renewals can be complex, especially in today’s dynamic market conditions. Seeking advice from a trusted mortgage broker like GLM Mortgage Group can provide invaluable clarity and peace of mind throughout the renewal process. Our team of experienced experts can analyze your unique financial situation, assess market trends, and recommend strategies to optimize your mortgage renewal. Whether you’re a first-time homebuyer or a seasoned homeowner, having access to expert advice ensures that you make well-informed decisions that support your long-term financial goals. Don’t hesitate to reach out to GLM Mortgage Group for personalized guidance and support tailored to your needs.

Understanding Interest Rate Risk

Interest rate risk is a significant consideration for homeowners in today’s market. With successive increases in interest rates, renewing your mortgage at a higher rate could add hundreds of dollars to your monthly mortgage payment. By understanding interest rate risk and exploring your options, you can make informed decisions to protect your financial wellbeing.

Conclusion: Secure Your Financial Future with GLM Mortgage Group

As Canadians face the challenges of renewing mortgages in a higher interest rate environment, it’s essential to make informed decisions and explore all of your available options. By partnering with GLM Mortgage Group, you can navigate these challenges with confidence and secure the best possible outcome for your financial future.

Our experienced team is dedicated to providing personalized advice and exceptional service to help you achieve your homeownership goals. Contact GLM Mortgage Group today to schedule a consultation and take the first step towards securing your financial future.

Remember, Canadians have been hit with the fastest rising interest rates in more than four decades, and with many poised to renew their mortgages in the months ahead, some shock may be in store. But with the right guidance and expertise, you can navigate these challenges and emerge stronger financially.

The post Navigating Mortgage Renewals in Rising Interest Rate Environment appeared first on GLM Mortgage Group.

In the dynamic and ever-evolving landscape of financial institutions, Credit Unions have emerged as distinct players, offering a plethora of advantages for savvy borrowers. In this comprehensive blog post, we’ll delve deep into the unique benefits of Credit Unions, exploring their regulatory independence, common-sense lending practices, community-centric approach, and providing real-life case studies to showcase their financial prowess. Additionally, we’ll discuss potential limitations to offer a well-rounded perspective for individuals seeking mortgage solutions.

1. Regulatory Independence: A Game-Changer for Borrowers

A key differentiator for Credit Unions is their regulatory independence. Unlike traditional banks regulated by the Office of the Superintendent of Financial Institutions (OSFI), Credit Unions operate under provincial regulations. This distinction becomes particularly impactful in light of recent changes, such as the B20 regulations introduced in 2018. Unlike their bank counterparts, Credit Unions are not bound by the B20 stress test, offering borrowers more flexibility in mortgage qualification.

This regulatory freedom allows Credit Unions to sidestep certain regulations, such as the B20 changes that mandate a mortgage with a down payment greater than 20% to qualify at the greater of the contract rate +2% or the Bank of Canada benchmark rate. A Credit Union, however, can still qualify a mortgage solely on the contract rate, providing borrowers with a unique advantage.

2. Common-Sense Lending Practices

Beyond regulatory advantages, Credit Unions also stand out due to their common-sense approach to lending. While traditional banks may adhere strictly to predefined criteria, Credit Unions often adopt a more flexible stance. This extends to considering properties with larger acreages, leased land, and those in the Agricultural Land Reserve (ALR). This flexibility can be a game-changer for individuals seeking unconventional mortgage solutions beyond the typical criteria imposed by traditional banks.

3. Community-Centric Financial Growth

A compelling aspect of Credit Unions is their commitment to keeping profits within the community. This community-oriented approach means that when you choose a Credit Union, you’re contributing to the local financial ecosystem. Profits generated stay within the community, supporting local initiatives and fostering economic growth. This stands in stark contrast to larger banks, where profits may be distributed across a broader geographic scope.

Real-Life Case Studies: Unveiling the Financial Advantage

To illustrate the practical benefits of Credit Unions, let’s delve into two detailed case studies comparing Credit Unions to traditional banks under the B20 changes:

1. Refinance Scenario:

• Two-income family with a combined annual income of $85,000.
• Credit Union’s qualifying rate allows for a borrowing capacity of $560,000.
• Bank’s qualifying rate permits a borrowing capacity of $455,000.
• Result: Credit Union offers access to the full $145,000 home equity, while the bank limits access to $40,000.

1. Purchase Scenario:

• Same two-income family with an $85,000 combined annual income.
• Credit Union’s qualifying rate enables a home purchase at $560,000.
• Bank’s qualifying rate restricts the home purchase to $455,000.
• Outcome: Credit Union facilitates a $105,000 higher borrowing amount.

Understanding Limitations: What to Keep in Mind

While Credit Unions offer compelling advantages, it’s essential to be aware of certain limitations. For instance, the inability to port mortgages out of province might be a factor for those considering relocation. Additionally, the increased demand for Credit Unions following the B20 changes can result in higher rates compared to their bank counterparts.

Conclusion: Empowering Your Financial Journey

In the dynamic world of mortgage lending, understanding the differences between banks and Credit Unions is crucial. Credit Unions, with their regulatory freedom, common-sense lending, and community focus, provide a viable alternative for borrowers seeking personalized and flexible financial solutions. At GLM Mortgage | Dominion Lending Centres, we navigate this financial landscape to ensure you’re connected with the best lender to meet your unique needs, guiding you toward financial empowerment and success. Explore the possibilities with Credit Unions and unlock the path to financial freedom today. Your journey to financial empowerment begins with informed decisions, and Credit Unions offer a compelling avenue to explore for a secure and prosperous financial future.

The post Title: Unlocking Financial Freedom: The Comprehensive Guide to Credit Unions and Their Distinctive Advantages appeared first on GLM Mortgage Group.

In the dynamic landscape of mortgage financing, traditional options like banks, credit unions, and monoline lenders stand as stalwarts of the financial world. However, life’s intricate tapestry, coupled with unique financial situations, often renders individuals ineligible for these conventional avenues. In such instances, the realm of private and alternative financing emerges as a beacon of hope, offering tailored solutions to those who may not fit the traditional lending mold. In this comprehensive exploration, we’ll delve deeper into the world of private lending, examining its benefits, eligibility criteria, terms, and the essential documentation required.

Understanding the Three Levels of Financing:

• Traditional Lenders: The stalwarts of the financial world—banks, monoline lenders (accessible exclusively through Mortgage Brokers), and credit unions.
• Private Lending: Crafted for individuals facing unique challenges, such as business-for-self, past or current bankruptcies, challenged credit, life-altering events like divorce, consumer proposals, and low reporting income.
• Alternate Lenders: With a down payment minimum of 20%, these lenders offer increased flexibility in debt servicing (up to 48%/50%).

Key Considerations for Private Lending:

Down Payment and Terms:

• Down payments vary based on the client’s circumstances, the nature of the property, and the individual lender’s preferences.
• Private mortgage terms typically span 12 months but can be structured as open-ended, allowing for early payoff with penalties outlined in the contract.

Interest Rates:

• Interest rates on private mortgages exhibit a broad range, from as low as 5.99% to as high as 19.99%.
• Rates are influenced by factors such as the down payment amount, the client’s creditworthiness, and the specific terms set by the lender.

Additional Fees:

• Private lending entails a lender/broker fee, paid directly by the borrower, often exceeding the basic interest cost.
• In addition to the lender/broker fee, borrowers may encounter administration fees and renewal fees, contributing to the overall cost of private financing.

Documentation Requirements:

• Documentation varies among private lenders, but in general, these lenders prioritize the marketability and selling potential of the property.
• Essential documents include an appraisal, reflecting the property’s marketability, and occasionally, additional documents like bank statements or discharge papers from a bankruptcy.

Conditions and the Closing Process:

• Private lenders may set specific conditions for borrowers, such as requiring satisfactory fire insurance or a good faith deposit.
• After meeting these conditions, the mortgage file is transmitted to the client’s lawyer, who finalizes the transaction, including details like the down payment and outstanding fees.

Conclusion:

In scenarios where traditional lending avenues prove elusive, private lending emerges as a resilient and viable alternative. The key to navigating this financial landscape successfully lies in partnering with a knowledgeable mortgage professional. 

At GLM Mortgage Group | Dominion Lending Centres, our expertise and extensive network ensure not only sound decisions but also steadfast support throughout the financing journey. 

Consider private financing opportunities with confidence, and reach out to us at any time. Experience our commitment to providing prompt responses within 90 minutes and let us guide you towards securing a financial future that goes beyond mere transactions, paving the way for a better tomorrow and a more secure financial footing.

The post Unlocking Financial Opportunities: Navigating Private and Alternative Financing for a Secure Tomorrow appeared first on GLM Mortgage Group.

Late mortgage payments are not a fun topic on top of the pandemic that has been a source of worry for people in a variety of different ways. It has brought up health concerns, anxiety increases, financial concerns and much more. Inflation is up to 6.8%, gas prices are soaring drastically, and the cost of living seems to be exploding with every passing day. 

With these concerns Canada is seeing more and more people choosing between paying off a bill or eating a meal. With these issues, mortgage payments are becoming a struggle for people to keep up with.

We want to assure you that lenders like banks and credit unions do not want to take your house away. If you know that you are starting to be on the brink of missing your mortgage payments it is best to go talk to your lender about your situation as soon as possible.

It may surprise you, but many lenders will present you with other options that could help with your financial situation. Unfortunately, if you do miss a mortgage payment without a discussion with your lender, you could be only weeks away from losing your home. 

What are some of the options you have?

An option you could do is refinance your mortgage. This would bring down your monthly payments significantly in the short term. Likely how this would look is you would extend your mortgage’s amortization period so that you would pay less a month over a longer period of time. Just because you choose this option does not mean you can not pay it off by the time you want because most mortgages have early payment options where you can pay your mortgage down faster when you happen to come into some extra cash, such as a tax refund or inheritance.

Another options depending on your situation is changing a mortgage with a variable rate to one with a fixed rate, delaying a foreclosure to assess your choices, selling your house or being referred to a trustee in bankruptcy.

Are you all alone?

No not at all, a lawyer named Maria Grande who has represented banks and credit unions in these types of situations has noted that there has been an uptick in recent months in mortgage sale proceedings in her law practice. 

With mortgages maturing, interest rates climbing, and employment challenges persisting, it’s a trend that could intensify throughout this year and into next year. 

It is important to understand that you are not alone. This period of time is not easy and between different worldly events such as the pandemic and the war in Ukraine, many things have changed leading to the increase in gas prices, the rise of inflation, and the uneasiness of the real estate market. 

Recently the Bank of Canada raised the benchmark interest rate to 1.5%. It has already created changes and we continue to update our rate everyday on our website. We are anticipating more changes in the coming months and we will keep you updated via social media. 

It is important to understand that lenders are not your enemy and they are willing to help within a reasonable means. We recommend reaching out right as you are starting to feel panicked as being proactive is always the best solution. 

We are also here to help at any time. Please send us an email or give us a call and we will be happy to discuss potential options that your lender could present you and to give you advice for how to enter that conversation with your lender. A home is such an important part of everyday living and to understand these potential proactive solutions is the first step in keeping yourself accountable and safe.

The post Late Mortgage Payments appeared first on GLM Mortgage Group.

Banks VS Credit Unions

Finding somewhere to trust with your life savings and all personal information can be a big decision. Two of the most common types of facilities that are around to help are either Banks or Credit Unions. Banks VS Credit Unions… What is the main difference between the two you ask? To keep things simple, one of the biggest differences is that a Bank is FOR profit and a Credit Union is NON profit.  As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with understanding the difference between Banks VS Credit Unions.

Banking is a financial system in which regulated institutions partake in accepting deposits, lending money, and transferring funds.

Canadian banking system groups financial institutions into five main categories:

• Chartered banks
• Trust and Loan companies
• The Cooperative Credit Movement
• Insurance Companies and
• Securities Dealers

The Big Five banks listed below dominate Canada’s financial ecosystem:

• Royal Bank of Canada (RBC)
• Toronto-Dominion Bank (TD)
• Bank of Nova Scotia (Scotiabank)
• Bank of Montreal (BMO)
• Canadian Imperial Bank of Commerce (CIBC)

In Canada, credit unions are regulated at a provincial level and either Provincial corporations or non-government insurers insure deposits made into the organization and can offer mortgages to borrowers who would not pass the current mortgage stress test. Yes, they can approve a mortgage application without a stress test.

There are many similarities between a bank and a credit union as a financial institution, which operates under similar regulations pertaining to loans, mortgages, and security. In terms of financial products, credit unions vs banks debate is irrelevant because you will likely find your banking needs at both credit unions and banks.

• Checking accounts
• Savings Accounts
• Loans
• Credit cards
• Mobile Banking
• ATM facilities

However, there are also a variety of differences such as:

1. Ownership
   1. The main difference of ownership between a bank and credit union is that Banks are for-profit and Credit unions are non-profit.
2. Membership
   1. Banks can do business with any customer if they do not have a history that challenges financial or legal regulations, whereas Credit Unions can only do business with their internal members.
3. Customer Service
   1. Banks offer 24/7 call centers with support available in multiple different languages. Credit Unions may not offer 24/7 support but usually can offer their members fasters personalized services at a quick pace.
4. Interest Rates
   1. Generally speaking, Banks do have lower interest rates than Credit Unions.
5. Fees
   1. Credit Unions often have lower and fewer fees than traditional Banks, however, Banks have more financial products in their portfolio.
6. Tax
   1. Banks are liable to taxation whereas Credit Unions are tax-free.
7. Regulatory Bodies
   1. Banks need to follow the guidelines and restrictions put into place by the following companies: Minister of finance of Canada (Finance Minister), Office of the superintendent of Financial Institutions (OSFI), Bank of Canada, Canada Deposit Insurance Corporation (CDIC), and Financial Institutions Supervisory Committee (FISC). Whereas Credit Unions are chartered and regulated provincially, that means they are subject to provincial deposit insurance regimes.
8. Insurance
   1. Banks provide insurance by the Federal Deposit Insurance Corporation (FDIC) and Credit Unions provide insurance by the National Credit Union Administration (NCUA).

There are several advantages of a credit union mortgage as opposed to a large, federally regulated bank…

1. Easier approval processes

This is primarily because credit unions hold the loans that they originate whereas banks often take mortgages off their own books by selling them to outside investors. As such, these investors are often the ones that influence the interest rate charged as well as underwriting standards. This means that banks will typically have far less power to be flexible with their lending in terms of the rates offered and who they can lend to.

2. Reduced rates

This member-focused mandate further helps mortgage borrowers to secure lower rates on their mortgages. Credit unions are largely designed to break even on their costs and are not taxed at a federal level.

3. Customer service

At a credit union, loan officers generally have a smaller portfolio of clients than banks. This enables a more personalized experience when originating a new mortgage.

4. No Mortgage Stress Test

That’s right! Credit Unions can approve a mortgage application without the need for a mortgage stress test. This does come with a slightly higher interest rate, but it still tends to be a lower interest rate than you would get from a trust company or a private mortgage lender.

If you have any questions, concerns or would like more information on Banks VS Credit Unions please reach out and one of our Senior Broker Partners would be more than happy to assess your unique situation and give you the best advice.

At GLM Mortgage Group, we are with our clients for the entire journey. From the beginning, we can identify client needs, any possible roadblocks, and give a variety of tailored solutions.

The post Banks VS Credit Unions appeared first on GLM Mortgage Group.

Increasing Your Purchase Power

Most individuals that we connect with to discuss a Mortgage Pre-Approval also want to know how we can go about Increasing Your Purchase Power. More often than not, those individuals could afford to make mortgage payments. Usually, they already pay monthly rent in the same amount as a mortgage, or perhaps even more! As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with your Purchasing journey.

Part of our process as Mortgage Brokers at GLM Mortgage Group is to connect with new clients with a Discovery Call, which involves key questions on important factors of a Mortgage Approval. We spend 10 minutes gathering information on income, credit, and down payment and with that, can provide a possible purchase price, and a piece of mind to shop within one’s budget.

Sometimes at the end of the conversation, we find that an individual may not be able to purchase within the price range they had planned to and brings us back to the drawing board to discuss options and a gameplan for the Increasing Your Purchase Power in the future.

Now, the reason that someone may not qualify for a mortgage that they could afford payments on, is due to the Stress Test, which newest rules were released in June 2021 and decreased borrowing power by 25%. To pass the mortgage Stress Test, you need to qualify at the contract mortgage rate plus 2% or the benchmark rate of 5.25%, whichever is higher. The purpose of the Stress Test is to ensure that should interest rates rise – a borrower will still be able to afford their mortgage payment.

This is a tactic by the Bank of Canada to ensure that consumers can withstand rising interest rates, as well as tackle household debt issues in Canada by preventing consumers from getting into further debt – but it greatly affects your purchase power, as you will qualify for less.

There are a few options to consider, that can help Increasing Your Purchase Power, potentially bypass the Stress Test and qualify for the purchase you are hoping to make.

First, down payment – if you have 20% down payment, this can provide various options that will allow you bypass the Stress Test, which will increase purchase power. Local credit unions are provincially regulated and therefore can allow you to bypass the Stress Test, although this comes with a slight rate premium. Secondly, having a 20% down payment can also make Alternative Lending an option – but be sure you understand this, as it may be easier to qualify, but these interest rates will be higher and could cost you more in the long run.

Nonetheless, with a 20% down payment – there are two viable options to Increasing Your Purchase Power in the Pre-Approval stage.

Further advice that we share with new clients, when we find they may not qualify for what they hoped is bringing a Co-signor to the mortgage. This could be a friend or family member that will be on the mortgage with you, and on the title of the property as little as 1%. We would be able to factor their income, assets, and debts into the equation to increase the purchase power. The primary borrower is still responsible for making mortgage payments, but the co-signor is there as a back up, and is required to make payments should the primary borrower default.

Another solution to Increasing Your Purchase Power is to increase the down payment.

This could mean putting your plans to purchase on hold for another 12 months while you continue to save, perhaps withdrawing RRSP or other Investments or even a gift from a family member may be possible. Given the current market conditions, we are seeing family members offer financial aid to their kids and grandkids to make home ownership possible for them.

Lastly, to help with Increasing Your Purchase Power, you can INcrease household income and DEcrease household debt. Although these options have a positive effect on purchase power, it takes time to see these effects take place. Perhaps obtaining a second part time job is possible, to increase income – but keep in mind, lenders will want to see this sustained for 2 years to consider the income. Also, decreasing debt will increase purchase power significantly.

For every $14,000 of debt that we carry, or $400/month payment, our borrowing power is decreased by $100,000. If you have a significant down payment, it’s always more advantageous for qualifying, to use a portion to pay down debts. It’s important to understand tips like this as they will contribute to Increasing Your Purchase Power.

At GLM Mortgage Group, we are with our clients for the entire journey. From the Discovery Call, we can identify client needs, any possible roadblocks, and a variety of solutions. Our brokers know how to Increasing Your Purchase Power and know how to assess your unique situation, giving the right advice so you can best move forward in your plans to purchase a home.

The post Increasing Your Purchase Power appeared first on GLM Mortgage Group.