Effective December 15th, 2024, significant changes to Canadian mortgage rules will provide new opportunities for homebuyers, including higher default insurance limits. The maximum home purchase price eligible for default insurance has been raised from $1 million to $1.5 million. Additionally, select borrowers will now have access to default-insured mortgages with 30-year amortization periods. These changes aim to make homeownership more attainable for Canadians in a competitive housing market.

In this blog, we’ll explore what these updates mean for you and why GLM Mortgage Group is your go-to partner for navigating these opportunities.

What’s Changing in Default Insurance Eligibility?

Default insurance protects lenders when borrowers are unable to meet their mortgage payments. It also allows buyers to purchase homes with smaller down payments. Until now, only homes priced up to $1 million were eligible for default insurance. However, starting December 15th, the threshold will rise to $1.5 million, opening doors for buyers in higher-priced markets.

Down Payment Requirements

The down payment rules remain the same but now apply to homes priced between $1 million and $1.5 million. Here’s how they break down:

• 5% for the first $500,000
• 10% for the portion between $500,001 and $1.5 million

For example, to purchase a $1.5 million home:

• 5% of the first $500,000 = $25,000
• 10% of the remaining $1 million = $100,000

Total minimum down payment: $125,000

This means buyers can now purchase a $1.5 million home with a down payment as low as $125,000, a massive improvement in accessibility for those looking to enter or upgrade in today’s market.

Introduction of 30-Year Amortizations for Default-Insured Mortgages

Another major update allows some borrowers to access a 30-year amortization for default-insured mortgages. Previously, insured mortgages were limited to a maximum 25-year amortization.

Who Qualifies for a 30-Year Amortization?

Borrowers eligible for this extended amortization include:

1. First-Time Home Buyers: New buyers can now reduce their monthly payments by spreading their mortgage over 30 years, making it easier to afford their first home.
2. Purchases of New Builds: Those buying newly constructed homes can take advantage of this option, encouraging homeownership and supporting housing development.

This change helps reduce monthly mortgage payments, making homeownership more affordable, particularly in high-cost markets like Vancouver, Toronto, and other major Canadian cities.

Why These Changes Matter

1. Broader Market Access

Raising the price threshold for default insurance enables buyers to access homes in higher-priced markets without needing a 20% down payment. For example, instead of requiring $300,000 for a $1.5 million home, buyers can now qualify with as little as $125,000.

2. Lower Monthly Payments

The introduction of a 30-year amortization reduces monthly payments for eligible buyers, allowing them to manage their cash flow better while still entering the housing market.

3. Increased Affordability for New Builds

Encouraging purchases of new builds with 30-year amortization will support Canada’s housing supply, which is a critical step in addressing housing affordability challenges.

The GLM Mortgage Group Advantage

Navigating these rule changes can be overwhelming, but with GLM Mortgage Group, you’re never alone. Here’s how we can help you take full advantage of these updates:

1. Expert Advice on New Rules

We stay ahead of regulatory changes to help you understand how they impact your homeownership journey. Whether you’re upgrading to a higher-priced home or looking for a first-time buyer advantage, we’ll guide you every step of the way.

2. Tailored Mortgage Solutions

Every buyer’s situation is unique. We assess your financial goals, current circumstances, and eligibility to create a personalized mortgage plan that takes advantage of these new rules.

3. Access to a Wide Network of Lenders

GLM Mortgage Group partners with a variety of lenders, ensuring you get the best rates and terms. Whether you need higher default insurance limits for a high-value home or are looking for a 30-year amortization, we’ll connect you with the right options.

4. Support for First-Time Home Buyers

First-time home buyers face unique challenges. With the new 30-year amortization option and higher default insurance limits, our team will help you unlock the door to your dream home while keeping your finances on track.

5. Seamless Application Process

We make the process of applying for a mortgage stress-free. From pre-approval to finalizing the deal, we handle the details so you can focus on your future home.

What Should You Do Next?

If you’re considering purchasing a home or exploring your options under these new rules, here are the steps you can take:

1. Determine Your Budget
   Use a mortgage affordability calculator to see how much you can afford under the updated rules.
2. Consult with a Mortgage Expert
   Speak with a trusted mortgage professional at GLM Mortgage Group to discuss your unique situation.
3. Get Pre-Approved
   A pre-approval gives you a clear idea of what you can borrow and strengthens your position as a buyer.
4. Explore Your Housing Options
   With the higher price limit and 30-year amortization options, you may have access to homes that were previously out of reach.
5. Finalize Your Mortgage Plan
   Work with GLM Mortgage Group to secure the best rates and terms for your mortgage.

Why These Changes Are a Big Deal

With Canadian housing prices continuing to rise, these rule changes address some of the biggest barriers to homeownership. By raising the default insurance price threshold and introducing 30-year amortizations for select borrowers, the government is creating pathways for more Canadians to achieve their homeownership dreams.

Your Trusted Partner: GLM Mortgage Group

Understanding and leveraging these changes can make a significant difference in your home-buying journey. That’s why it’s crucial to work with a mortgage professional who understands the market and can tailor solutions to your needs.

At GLM Mortgage Group, we pride ourselves on our client-focused approach. We’re here to simplify the process, secure the best terms, and ensure you feel confident in every step of your mortgage journey.

Contact us today to learn more about how we can help you navigate these exciting changes, higher default insurance limits, and turn your homeownership dreams into reality.

This blog is designed to inform, engage, and highlight GLM Mortgage Group’s expertise in guiding clients through these new opportunities. Let me know if you’d like to refine it further!

The post Big News for Homebuyers: Higher Default Insurance Limits and 30-Year Amortizations appeared first on GLM Mortgage Group.

Mortgage refinancing may offer lower interest rates but entering into this type of agreement is ONLY beneficial or advantageous to the borrower under certain circumstances. Therefore, you must do some research about the current value of your property as well as what the market rates in your region are. 

If the present situation is close to ideal and the projected state of the market in the foreseeable future is relatively stable, then it’s the right time to apply for a loan. 

However, coming to a decision can be tough, so please reach out to a Mortgage Broker with GLM Mortgage Group | Dominion Lending Centres to discuss.

There are many reasons why it could be a could idea to apply for mortgage refinancing, but below is a list of very common reasons:

• You are planning to renovate your house
• You are thinking about buying a rental or vacation property
• You want to pay for your child’s education fund
• You are thinking about entering a new business venture, but do not have the capital to proceed.
• Refinancing your home is a strategy to consolidate all your debts
• Interest rates have dropped to the point that refinancing your home can lower your borrowing costs. 

When you refinance the mortgage of your house, the amount you borrow will depend on the equity of your home. You can only receive a loan that amounts to a maximum of 80% of the appraised value of your home. Knowing this information, you can calculate the amount of a loan you could receive and the payments each month. 

We think that it is best to ask yourself what you are refinancing for and if the budget is comfortable enough for something of that size. If the answer is no, then perhaps it’s not the right time to refinance.

Every lender has their own standards but three areas that will be looked at the most are your credit score, your debt-to-income ratio, and your home equity.

Yes, you can get a rate lock for a refinancing mortgage.

Yes, there is a penalty to break the existing mortgage and refinance into a new mortgage. The penalty will be either 3 Months Interest Cost (if you have a variable rate) or an Interest Rate Differential (if you have a fixed rate). It’s always best to reach out to your current lender to confirm this penalty and factor that into the refinance calculations to assess it’s worthiness.

Refinancing does come with some expenses, seen below for consideration. 

• Home appraisal costs
• Title search fees
• Title insurance fees
• Legal costs.
• Penalty to break existing mortgage

Second Mortgage: A second loan you can secure with your home equity. You must pay off the new mortgage as well as the original one, and if you default on your payments, your home may be sold off to cover your debt on both loans. 

Home Equity Line of Credit (HELOC): Operates like your typical line of credit but is secured by your property. You can withdraw funds up to the established credit limit, and after you’ve paid the amount back, you can borrow from this line of credit again. 

Reverse Mortgage: Another option for homeowners who are at least 55 years of age and would like to convert their home equity into cash.

Fixed-rate mortgage: You will pay the same monthly payments and interest rate for the duration of the mortgage term.

Variable-rate mortgage: Your monthly payments and the interest rate of your mortgage will fluctuate depending on market conditions.

Hybrid or combined rate mortgage: Terms may include fixed and adjustable rates.

The post Home Refinancing FAQs appeared first on GLM Mortgage Group.

Credit Medic for You & Your Mortgage

Your credit score is a huge factor in getting a mortgage, and it won’t go away. The first thing Lenders do when they look at your application is to look at your credit score. From there, they build your file. It is crucial that you know where you stand with your credit score because so much of your lending availability is based on it. Credit Medic is here to help you. As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with understanding the benefits of improving your credit.

The most important step in getting approved for a loan with bad credit is to improve your credit score. If you had a bankruptcy, once your bankruptcy has been discharged, you can apply for a secured credit card. There are companies that will give you a secured credit card if you pay the deposit. In fact, it can take as little as 30 days to turn your credit score around to make an application look more desirable.

Below are some simple steps from Credit Medic to help rebuild your credit…

• Open a savings account and add regular deposits

• Having cash savings is a great way to show credibility to a credit card company. When you put funds into your savings account, it proves to a lender that you can manage your money. Once you have $1000 or so saved up, you can go to your Bank and get your secured credit card.

• The optimum amount for your credit score is to keep your balances at 30%

• Once your balance surpasses that 30%, you jump into a different category. If you get to 80% or higher, then you fall into yet another category that lowers your credit score even more. Obviously, you can’t raise your credit score if you’re late on payments. But that doesn’t mean you should avoid using your credit cards. In fact, having credit cards shows the Lender you can manage credit.

• Have at least two different types of credit cards. For example, a VISA and a Canadian Tire card

• You should have at least two or three active trades (credit card transactions) each month. Too often people pay off their credit cards and then believe it’s best to begin using cash for all transactions. The problem with this strategy is Lenders want to see active trades. Once your credit cards are paid off, try a simple transaction such as filling up your car with gas or buying groceries. Then pay off that balance at the end of the month so you keep your credit card or line of credit current.

• The minimum amount of credit between your trades should be $2000 – $5000

• This may require having a couple of credit cards and/or a loan. The bottom line is Lenders won’t loan to people who haven’t proven they can handle credit. As mentioned earlier, you don’t have to go out and spend the entire limit on the credit card. Just make some sort of transaction that you can pay off right away. The key is keeping your accounts active.

• Rule 2, 2, and 2

• Simply put, there is a basic 2, 2, and 2 rule that you can apply to your strategy to improve your credit. As mentioned earlier, make sure you have at least 2 credit cards from unique sources, make sure they have minimum limits of $2,000, and establish 2 years of credit history.

• Make at least the minimum payment monthly

• The biggest mistake that consumers make with their credit is not making their minimum payments on time! Make sure you set up your payments in a way that you will remember to pay them EVERY month and ON TIME! Not doing so can affect your credit negatively.

• Don’t let your credit be pulled too often

• Limit the number of times you apply for credit in a short period of time. It is a good idea to seek credit only when you really need it.

Another tip from Credit Medic is to check your personal credit report (at least once a year) to make sure you recognize all items reported are accurate on your history. If you practice this, you will most likely notice any discrepancy promptly and be able to fix it.

Think of it as an annual checkup for your financial health! You have the right to dispute any information on your credit report that you believe is wrong. You can ask the credit reporting agencies to correct errors. It’s free.

Credit Medics’ few important things to look out for…

• Mistakes in your personal information
• Errors in credit card and loan accounts
• Negative information about your accounts that is still listed after the maximum number of years is allowed to stay on your report
• Accounts listed that you never opened yourself, which could be a sign of identity theft

Errors in your credit bureau should be taken seriously as they may give the lender the wrong impression of you and your financial health. If you feel you have not been treated properly by a credit reporting agency, you can make a written complaint to the office of your provincial or territorial government that handles consumer affairs.

GLM Mortgage Group | Dominion Lending Centres is available to you for free credit consulting. If you want to purchase a home but feel like you’ve been handcuffed by your credit, don’t be discouraged! We can help. Call us at 604-259-1203. We always return our calls within 90 minutes. Or visit our website www.GLMmortgage.com and fill out our online application.

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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.

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What is a Flex-Down Mortgage?

A Flex-Down Mortgage is a mortgage product that has a flexible down payment amount. There is still a down-payment required, but it will vary based on the property value.

• For a property valued under than or equal to $500,000, 5% down payment is required (sources available below)
• For a property valued at greater than $500,000 and less than $1,000,000 –5% down payment is required up to $500,000 with an additional 10% down payment on the portion of the home value above $500,000.

Flex-down mortgages can only be on first mortgages, not second or third or used in refinance situations. As noted above, the total property value has to be less than $1,000,000. This type of mortgage will also have insurance included with it—the premium will be lesser of the premium as a % of the total new loan amount or the premium as a % of the top-up portion additional loan based on the rates at that time.

Those that choose to go with this type of mortgage product will have to meet requirements, just like any other mortgage. There are a few specifications with this product:

• You must show that you have standard income and employment verification papers
• A credit score of 650 or higher is highly recommended
• You must have no previous bankruptcies
• Some lenders may still require you to have some of the down payment from your own resources

Those considering this type of mortgage are recommended to have very little debt and be able to accommodate the additional cost of higher mortgage insurance (due to the higher risk to the lender on this type of mortgage). Typically, the insurance premium would be 0.2% higher on a flex down mortgage.

How it Works

You can borrow your 5% payment from a Line of Credit or even a credit card.  This can then be used for your down payment. You have to disclose this to the Insurer and it will be on the application that goes to the Lender.

This is perfect for someone just getting into a new high paying job or for someone who is renting and can afford higher monthly payments but would take forever to save up the 5% down payment. This type of mortgage product can be an excellent option if you don’t quite have enough for the down payment. Are you interested in learning more about this mortgage product? Contact us and let us show you how a Flex mortgage can make the home of your dreams happen sooner than you think!

The post Zero Down Payment Mortgage–Does it Exist? appeared first on GLM Mortgage Group.

One thing that we find though, their expectations are often not aligned with reality. We are always honest with our clients about the reality of the situation, but we thought it would be helpful to clear up a few of those “expectations”.

Down Payments

Expectation: They have enough saved for their down payment
Reality: This seems to be the first “shocking” point to many first-timers. It’s also one of the most heartbreaking ones to explain to them too. Many times, they have saved for several years and come in with what they think is a sizable down payment…but, in reality, it’s less than what is needed. They will often have their sights set on a home that is well out of their price range. They have also potentially failed to account for stress-testing measures. As a general rule of thumb, 5% is the minimum on a property with a purchase price of less than $500,000. However, 20% or more is the ideal in order to avoid your mortgage being classified as a high-ratio mortgage and require mortgage insurance.
Expectation: Once you have the down payment you are all set!
Reality: There are many different costs associated with moving, buying a home, and other fees that many first-time buyers may not be aware of. A few fees to consider include:

• Legal Fees
• Property Transfer Fees
• Moving Costs (moving van, moving crew)
• Appraisal fee
• Searches and Title Insurance

These will total approximately 1.5-2% of purchase price.

Monthly Costs

Expectation: Costs will stay the same when going from renting to owning a home.
Reality: This is not true in most cases. Many people forget to account for the day-to-day and general upkeep associated with home ownership. These can include repairs on the home, insurance, property taxes, extra utility costs, etc. This is why we always encourage first-time buyers to sit down and look at their budget and “practice” the strains and additional costs. This allows you to see if you are truly ready financially for home ownership and also alleviates stress down the road.

Pre-Approved Mortgage Amounts

Expectation: We qualified for (blank) amount of dollars—let’s use all of it.
Reality: This is rarely a recommended or smart decision. Pick a price range that you are comfortable house shopping for that would allow you to accommodate things like home renovations, upgrades, and updates. Looking at homes that still fit your needs but may just need a little more work can significantly decrease the amount you are borrowing. If you are open to different options when house-hunting, you can save money in the long run.

These are just four examples of how a first-time mortgage holders’ expectation are rarely the reality. However, there are other areas that we find they may have questions in or not be aware of. The mortgage industry is one that is forever changing, and it can be difficult to stay on top of all of the changes! If you have a question, concern, or just want to know about what to really expect when you are going through the mortgage process, consider meeting with a DLC broker.

The post First Time Mortgages: Expectation vs. Reality appeared first on GLM Mortgage Group.

• Lease agreements for two suites (loft and basement)
• Notice of assessment and T1 generals from the last two years
• Standard income documentation for full-time employment
• Confirmation of self-employment for the last two years

 
Step 3: Calculate the total debt services ratio.
We took the above numbers and worked with them to present a debt service ratio that started out as 47.74% and brought it down to 42.5%
 
Step 4: Share the mortgage solution!
The down payment was provided by the parents and the rental income from the subject property was used. All their remaining debts were paid with $25,000 cash back from the lender who also provided an interest only payment Line of Credit to cover both the mortgage and consumer debt.
 
Our clients were thrilled to be able to purchase their dream home and to have their consumer debt under control. We are proud to be able to help couples like this to make their dreams become a reality, and really, all it took was 4 simple steps to get them into their home!

The post Client Story: 4 Mortgage Steps to Overcoming High Consumer Debt appeared first on GLM Mortgage Group.

• Have at least 2 credit lines at all times

 
This means that you should always have 2 “tradelines” going. Whether this be 2 credit cards, a credit card and a line of credit and a car loan etc. You want to show that you can manage credit, and this is one easy way to do it. As an added note, the limit on the credit lines will need to be set at a minimum $2,000.
 
 

• Make your payments on time each and every month

 
No skipped payments! You should ALWAYS make the minimum payment required on all your lines of credit each month.
 

1. Do not let your credit be pulled too often.

This one is something people often forget about. Having your credit pulled for new credit cards, car loans, and other things frequently raises a red flag for lenders and can significantly lower your credit score
 
 

• Do not exceed 50% of the available credit limit on your credit card or credit line.

 
We know this one can be hard to do. One easy way to monitor this is to only use a credit card for certain fixed bills such as a cable/internet bill, cell-phone bill, etc. This way you can easily keep track of what credit you have used and what is available still.
 
 

• If you have missed a payment, get back on track right away.

 
If you did, by chance, miss a payment, do not fret. Instead, get back on track with your month by month payments. Lenders would look at the one missed payment as an abnormality versus a normal occurrence if you are back on track by the following month.
 
 

• Make sure each partner has their own credit.

 
We cannot tell you how frustrating it can be for couples when they realize that all their credit cards and lines of credit are only under one name…leaving the other person with no proven track record of managing credit! We advise clients to both grow their credit by making sure all joint accounts report for you both.
 

7. Do not exceed the Credit limit.

It is important to not go over or exceed the credit limit you have been given. Having overdrawn credit,  shows the lender that you are not able to responsibly manage credit.
 
If you follow these 7 steps and are responsible with your credit, you will have no problem when it comes time to purchase a home! In need of more advice? Contact a Dominion Lending Centres Broker-they will be more than happy to help you.
 

The post 7 Sure-Fire Ways to Grow Your Credit Score appeared first on GLM Mortgage Group.

1. It’s All In The Numbers

Just like house-shopping, building a home from the ground up requires you to know what you can afford. Most house plans offer a cost to build tool (usually for a nominal fee) to give you an accurate estimate of construction costs based on where you’re building. The numbers include the costs of construction, tax benefits, funds for the down payment and slush account, and other related calculations.
 
Once you have determined what you can and are willing to spend, meet with a mortgage broker to discuss how much you wish to borrow for your home.
 
Renovations and the actual building portion aside, we often are asked on what a mortgage looks like for an unbuilt home. This is where a “construction” mortgage comes into play.  The budget you give your broker should include your hard and soft costs as well as the reserve of money you plan to have set aside in case you run into unexpected events.
 
It’s this initial budget that a lender will determine how much you qualify for.
 

• For example, based on the lender loaning up to 75% of the total cost (with 25% down):

Land purchase price (as is) Total soft and hard costs Total Cost (as complete)
$200,000
$400,000
$600,000 x 75% = $450,000 available to loan
Keep in mind, the lender will also consider the appraised value of the finished product. In this example, the completed appraised value of the home would have to be at least $600,000 to qualify for the amount available to loan. The appraised value is determined before the project begins.
As well, the client will have to come up with the initial $150,000 to be able to finance the total cost of $600,000. A down payment of $150,000 plus the loan amount of $450,000 = the total cost of $600,000.
 

2. Choose a Reputable Builder

Builders are a dime a dozen, but not all of them are qualified or will be the right one for your project. Careful research is needed when determining who will be the head contractor of your home-building project. Alternatively, one of the best ways to find your perfect contractor is by asking friends and family who have gone through the process. Another great source is your mortgage broker! They often have many industry connections to some of the most qualified contractors and builders. Ask them if they know of anyone—we can almost guarantee they can will have at least one or more referrals for you.
 

3. Build a Home for Tomorrow

It can be tempting to personalize your home to the tenth degree—after all you are building it to meet your unique, customized wants and needs. However, keep resale value and practicality at the back of your mind at all times. Life can often throw a few curve balls that lead to you-for one reason or another-having to place the home for sale. If that time should ever come, you want to be able to appeal to all buyers easily and not have to hold the house longer than necessary. Ask yourself if the features you are putting into your home will appeal to others and if the features suit the neighborhood you are building in as well.
 

4. Go Green!

Now more than ever before energy efficient upgrades are easy to add to your home. When you are in the design stages, selecting energy efficient appliances, windows, HVAC systems, and more can save you money in the long run and may also make you eligible for certain grants and discounts. For example, the CMHC green building program rewards those who select energy efficient and environment friendly options.
 

5. Understand the Loan

As a final note, once construction is done it’s crucial to understand how a Construction Mortgage Loan repayment works. To make it easier, we have a list of points that you should know:

• Construction loans are usually fully opened and can be repaid at any time.
• Interest is charged only on amounts drawn. There are no “unused funds”
• Once construction is complete and project completion has been verified by the lender, the

construction mortgage is “moved over” to a normal mortgage.

• A lender will always take into consideration the marketability of a property. They will look at

not only the location based on demographic but also the location based on geography. For instance, a lot that is in a secluded area where no sales of lots have occurred in the last five years and mostly consisting of rock face may not be a property that they are willing to lend on.

• Depending on the lender, you may have a timeframe within which you need to complete construction (typically between 6 and 12 months).

 
There are a lot of things to consider when you build a home but a few things that can keep you on track and on budget are to have a solid plan in place, work with a builder you trust, build a strong team around you that can be there from start to finish, and to do your research.  Once you have decided to build, call your DLC agent—they can help you get the ball rolling and can guide you to the first step of breaking ground on your new home.

The post Top 5 Things To Consider When Building Your New Home appeared first on GLM Mortgage Group.