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!

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Reverse mortgages are becoming an increasingly popular option for retirees looking to access the equity in their homes without making monthly payments. However, the implications for inheritance can be complex. For homeowners considering this financial tool, it’s important to understand how it affects their heirs. This blog will unravel the complexities of reverse mortgage inheritance, allowing you to navigate these decisions with confidence and safeguard your family’s financial future.

Why Reverse Mortgage Inheritance Matters

Reverse mortgages differ from traditional mortgages in significant ways, most notably in that there are no required monthly payments. Instead, the loan is repaid when the homeowner sells the property, moves, or passes away. The inheritance aspect becomes crucial when discussing the future of the family home, as heirs often face decisions about how to handle the property and the remaining mortgage balance.

By fully understanding the process of reverse mortgage inheritance, you can make well-informed choices that protect your family’s assets and ensure a smooth financial transition. Let’s delve into the details of what heirs should expect, the options available, and the key factors that influence those decisions.

What Heirs Need to Know About Reverse Mortgages

When the last borrower on a reverse mortgage passes away, the responsibility of handling the loan and the property shifts to the heirs. This is where reverse mortgage inheritance comes into play, and it’s essential for heirs to be prepared for this situation.

The balance of the reverse mortgage becomes due once the homeowner dies. Heirs have a few key options at this stage, which we’ll explore in more detail:

1. Sell the Home to Repay the Loan The most common and straightforward option is selling the property. In many cases, the sale of the home will cover the outstanding loan amount. If the home has appreciated in value or the loan balance is relatively low, there may even be equity remaining that the heirs can claim. Once the loan is repaid, any leftover proceeds from the sale belong to the heirs.
   This option provides heirs with a clean and efficient way to resolve the reverse mortgage, particularly if they do not wish to keep the property. Given the Canadian real estate market’s general upward trend, selling the home usually results in sufficient funds to cover the debt, ensuring that heirs are not left with out-of-pocket costs.
2. Keep the Home and Refinance or Pay Off the Loan If the heirs want to keep the property, they can choose to pay off the reverse mortgage themselves. This can be done by refinancing the home with a new mortgage or using other available funds to settle the outstanding loan. The heirs have a period (usually six months, with extensions possible) to arrange for repayment before the lender takes further action.
   This option is ideal for heirs who have sentimental attachments to the family home or see long-term financial value in retaining the property. However, it requires access to significant funds or financing options to pay off the reverse mortgage.
3. Sign a Deed in Lieu of Foreclosure In some cases, heirs may decide that they do not wish to keep or sell the property. In these situations, they can opt to sign a deed in lieu of foreclosure, effectively returning the home to the lender. This allows the heirs to avoid any potential legal or financial complications related to the reverse mortgage.
   This option is usually chosen when the home’s value has significantly decreased, or the reverse mortgage balance is close to or exceeds the home’s market value. Heirs are not personally liable for any shortfall if the home’s value is less than the loan balance, thanks to the reverse mortgage’s “no negative equity” guarantee. This protection ensures that neither the estate nor the heirs will owe more than the home’s worth.

Potential Risks and Protections for Heirs

A reverse mortgage can provide much-needed financial flexibility during retirement, but it’s important to be aware of the potential risks that arise when heirs inherit the property.

One of the key risks is a decline in home value. While the reverse mortgage’s “no negative equity” clause prevents heirs from owing more than the home is worth, a significant drop in the property’s value could mean that heirs receive little to no inheritance from the home’s sale. It’s essential to consider this possibility, especially in fluctuating real estate markets.

However, Canadian homeowners are protected by HomeEquity Bank’s guarantee, ensuring that the payment due at loan maturity will never exceed the home’s fair market value. This means that as long as the homeowner adheres to the terms of the reverse mortgage, their heirs will not be burdened with excessive debt, even if the home’s value has fallen below the loan balance.

Planning Ahead: Preparing Heirs for Reverse Mortgage Inheritance

One of the best ways to ensure a smooth inheritance process is through proactive planning and communication. Homeowners should discuss their reverse mortgage decisions with their heirs and ensure they understand the potential outcomes.

This is where working with mortgage professionals, such as the experts at GLM Mortgage Group, becomes invaluable. By seeking professional guidance, you can clarify the specific terms of your reverse mortgage, assess the impact on your estate, and help your heirs prepare for the decisions they may face.

Additionally, homeowners should consider drafting a clear estate plan that outlines their wishes regarding the reverse mortgage and the property. Whether you want your heirs to keep the home, sell it, or simply return it to the lender, documenting these preferences can prevent confusion and conflict during what is already an emotionally challenging time.

Ensuring a Financially Secure Future for Your Heirs

While a reverse mortgage can offer financial freedom in retirement, it’s important to understand its long-term implications for your estate. By educating yourself and your family about reverse mortgage inheritance, you can ensure that your heirs are equipped to make informed decisions that align with your wishes.

In summary, reverse mortgage inheritance presents a variety of options for heirs, ranging from selling the property to paying off the loan or returning the home to the lender. Each option has its benefits and challenges, but with careful planning, homeowners can ensure that their family’s financial future is secure.

For those navigating the complexities of reverse mortgage inheritance, expert advice is essential. Contact GLM Mortgage Group today to explore your options and plan for a financially secure future for both you and your loved ones.

Conclusion: Knowledge is Power

Understanding the inheritance implications of reverse mortgages is crucial for homeowners and their heirs. By taking the time to explore your options and communicate with your family, you can secure your financial legacy and provide peace of mind for future generations. Reach out to GLM Mortgage Group to learn more about how reverse mortgages work and how they can fit into your overall financial planning strategy. Proactive decisions today will lead to a smoother, more secure tomorrow.

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The age-old question of renting vs. buying a home is one that many Canadians grapple with on a daily basis. The decision is not only about having a place to call your own but also involves significant financial considerations. In this blog, we’ll explore the key factors that can help you decide whether renting or buying is the right choice for you. Additionally, we’ll discuss why GLM Mortgage Group is the best mortgage group to work with when you’re ready to make that decision.

The Financial Implications of Renting

Renting a home offers several advantages, particularly for those who are not yet ready to commit to a long-term investment. Here are some financial benefits of renting:

1. Lower Upfront Costs: Renting typically requires a security deposit and the first month’s rent, which is significantly lower than the down payment required for purchasing a home.
2. Flexibility: Renting offers greater mobility. If your job requires frequent relocation or if you are unsure about settling in a particular area, renting allows you to move with relative ease.
3. Maintenance and Repairs: When you rent, the responsibility for maintenance and repairs generally falls on the landlord, saving you both time and money.
4. No Property Taxes: Renters are not responsible for property taxes, which can be a significant annual expense for homeowners.

However, renting also has its drawbacks. Monthly rent payments can be seen as “money down the drain” since they do not contribute to building equity. Additionally, renters are subject to rent increases and may face the uncertainty of lease renewals.

The Financial Implications of Buying

Buying a home is often viewed as a long-term investment with the potential for significant financial benefits. Here are some reasons why buying might be the right choice:

1. Building Equity: Every mortgage payment contributes to building equity in your home, which can be a valuable asset over time.
2. Appreciation: Real estate generally appreciates in value over the long term, providing homeowners with the potential for capital gains.
3. Stability: Owning a home offers stability and the freedom to make modifications or renovations as you see fit, without needing a landlord’s approval.
4. Tax Benefits: Homeowners may be eligible for various tax deductions, such as mortgage interest and property taxes, which can lower their overall tax burden.

Despite these advantages, buying a home also involves higher upfront costs, including a down payment, closing costs, and ongoing expenses such as property taxes, maintenance, and repairs.

Renting vs. Buying: Key Considerations

When deciding between renting and buying, it’s essential to consider your financial situation, lifestyle, and long-term goals. Here are some key questions to ask yourself:

1. How Long Do You Plan to Stay? If you plan to stay in one place for a long time, buying may be more cost-effective. However, if you anticipate moving within a few years, renting might be the better option.
2. What Is Your Financial Situation? Consider your savings, income stability, and credit score. These factors will influence your ability to secure a mortgage and afford the associated costs of homeownership.
3. Are You Ready for the Responsibility? Owning a home requires a significant commitment of time and money for maintenance and repairs. Make sure you’re prepared for these responsibilities.
4. Market Conditions: The real estate market varies by region. In some areas, it may be more advantageous to buy, while in others, renting may be more financially prudent.

Why GLM Mortgage Group is the Right Choice

When you’ve made the decision to buy a home, choosing the right mortgage group is crucial. GLM Mortgage Group stands out as the best option for several reasons:

1. Expertise and Experience: GLM Mortgage Group has a team of experienced professionals who understand the intricacies of the mortgage market. They can provide personalized advice tailored to your unique financial situation.
2. Wide Range of Products: GLM Mortgage Group offers a variety of mortgage products to suit different needs and preferences. Whether you’re a first-time homebuyer or looking to refinance, they have options that can meet your requirements.
3. Customer-Centric Approach: At GLM Mortgage Group, customer satisfaction is a top priority. They work diligently to ensure that you receive the best possible mortgage terms and conditions.
4. Local Knowledge: With deep roots in British Columbia, GLM Mortgage Group has extensive knowledge of the local real estate market. This insight allows them to offer valuable guidance and support throughout the home-buying process.
5. Competitive Rates: GLM Mortgage Group is committed to helping you secure the most competitive mortgage rates, ensuring that you can afford your dream home without stretching your budget.

Conclusion

Deciding between renting vs. buying a home is a significant financial decision that requires careful consideration of your personal circumstances and long-term goals. Both options have their pros and cons, and what works for one person may not be suitable for another.

When you’re ready to take the plunge into homeownership, working with a reputable and knowledgeable mortgage group like GLM Mortgage Group can make all the difference. Their expertise, customer-centric approach, and competitive rates ensure that you get the best possible deal, making your dream of owning a home a reality.

By weighing the financial considerations and partnering with the right professionals, you can make an informed decision that aligns with your financial goals and lifestyle.

The post Renting vs. Buying: Financial Considerations for Canadians appeared first on GLM Mortgage Group.

For those who are eager to secure their dream home in Vancouver, the decision to partner with a mortgage broker, especially which one, is an important one. In the dynamic and often complex world of real estate, the expertise and guidance provided by a reliable mortgage broker can be the key to transforming your homeownership aspirations into a reality. At GLM Mortgage Group, we understand the significance of this decision and are here to offer you exceptional services and unwavering support in your quest for the perfect mortgage.

The Role of a Mortgage Broker

A mortgage broker serves as your trusted intermediary, forging a critical connection between you and your dream home. They are well-versed in the intricacies of the real estate market, maintaining invaluable relationships with lenders in Vancouver, or wherever you aim to buy your home. This expertise allows them to match borrowers with the right loans, ensuring you secure the best mortgage tailored to your unique circumstances.

GLM Mortgage Group, as the premier Vancouver mortgage broker, is dedicated to making your homeownership dreams come true. Let’s explore what sets us apart and why choosing us is a wise step towards your dream home.

Transparency at the Core

One of the most frustrating aspects of securing a mortgage can be the opacity and complexity of the process. GLM Mortgage Group understands that clarity is key. Our commitment to transparency means that you will never be left in the dark, wondering about the steps involved or the paperwork required to get the job done. We firmly believe that you should have a full understanding of the process without incurring additional, unnecessary expenses. We always go the extra mile to ensure you know what’s needed and the best path forward, and most importantly, we offer this invaluable guidance free of charge; yes we said free!

A Comprehensive Suite of Services

GLM Mortgage Group offers a diverse array of services, catering to various financial situations and needs. We firmly believe that homeownership should be within reach for everyone, regardless of their financial circumstances. Our services include:

• First Mortgages: Guiding first-time homebuyers to secure their dream homes.
• Second Home Financing: Providing options for those looking to purchase a second home.
• Self-Employed Mortgages: Offering solutions for self-employed individuals.
• Commercial Loans: Assisting with commercial real estate financing.
• Bridge Financing: Bridging the gap between property purchases.
• Credit Repair: Helping clients improve their credit scores for better mortgage terms.
• Refinancing: Optimizing existing mortgages for better rates and terms.
• Equity Loans: Accessing loans based on your property’s equity.
• Mortgage Insurance: Protecting your investment with mortgage insurance.

Strong Industry Connections

Our extensive network of lenders and real estate professionals in Vancouver and the Fraser Valley ensures that we stay informed about the latest developments in the local real estate market. This network is instrumental in finding the most suitable mortgage solutions for our clients. With GLM Mortgage Group, you have access to the pulse of Vancouver’s real estate landscape.

Specialty Services for Unique Circumstances

We understand that not every financial situation fits the traditional mold. That’s why we offer a range of specialty services to meet your unique needs:

• Self-Employed/BFS Low Credit: Tailored solutions for self-employed individuals with lower credit scores.
• Self-Employed/Stated Income: Mortgage options for self-employed individuals with stated income.
• Private Lending: Access to private lending solutions.
• Alternate (B) Lending: Alternative lending options for unique financial circumstances.
• Reverse/CHIP Mortgages: Specialized solutions for seniors and retirees.

Seize Your Dream Home Today

The Vancouver housing market is vibrant, and opportunities abound. The sooner you act, the sooner you can grasp the keys to your dream home. By collaborating with GLM Mortgage Group, you gain a deep understanding of the mortgage options available to you and take charge of your home-buying journey.

Don’t let the complexities of the mortgage process deter you from owning the home you love. With our extensive range of services, unwavering commitment to transparency, and strong industry connections, we are your trusted partner in the Vancouver mortgage market. Your dream home is closer than you think with GLM Mortgage Group by your side. Contact us today to embark on the journey to homeownership and turn your dreams into reality. Let’s make your homeownership dreams come true!

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Decoding Mortgage Broker Commissions: Your Guide to Understanding Earnings

Imagine this: you’re standing on the threshold of a new home, ready to secure a mortgage that will make your dreams a reality. Alongside you stands a mortgage broker, a professional who holds the key to finding the perfect deal for you. But amidst all the excitement, have you ever paused to ponder how much these experts earn for their invaluable services? The world of mortgage broker commissions might seem intricate, but fear not, we’re here to unravel the mysteries and explore how your personal circumstances play into the equation.

Unveiling the Numbers: Mortgage Broker Earnings Explained

Navigating the realm of mortgage broker compensation requires a closer look, as various lenders offer different commission structures. As a general guideline, mortgage brokers typically earn between 55 to 110 basis points, with variations spanning between 100 and 110 basis points for a 5-year term. But what do these numbers signify in the grand scheme of things?

To put it into perspective, let’s assume you’re seeking a $500,000 mortgage. Based on the standard commission rate, your mortgage broker’s earnings would range from $5,000 to $5,500 over the 5-year term. However, it’s important to note that a portion of this fee might need to be allocated to the broker’s franchise or brokering house. The final amount the broker receives hinges on the successful funding of your mortgage agreement.

It is important to note that mortgage brokers should not charge you any fees as it is a free service on our end being commission based from the lenders. The only time this changes is if you have to enter a private or alternate mortgage due to credit, income and/or property  challenges (which we will talk about next week).

Diving into Complexity: Mortgage Broker Commissions and Your Choices

Delving deeper into the intricacies of mortgage broker commissions reveals a landscape that varies based on the commission structure of the lender(s). While some lenders might offer more lucrative commission packages, others could be less forthcoming. It’s essential to proceed cautiously when dealing with lenders who promise higher commissions for mortgages they offer, as this might correlate with more stringent restrictions on the borrower. You may want to refer back to some of our recent blogs that touch on the personalities of a mortgage and why it is important to understand the fineprint. This is one regard into where mortgage brokers have all the experience in getting you the best package for your situation and needs.

The duration of your mortgage term plays a pivotal role in determining commission rates. Brokers are likely to receive lower commissions for shorter-term mortgages, while longer-term options could yield higher earnings. Essentially, the length of your mortgage agreement directly impacts the broker’s take-home pay.

Personal Touch: The Role of Your Mortgage Broker’s Personality

Here’s where things get interesting—the distinctive personalities of mortgage brokers come into play. When it comes to mortgage options, banks and brokers differ significantly. While bank employees involved in a similar deal might earn around 30 to 50 basis points, mortgage brokers earn considerably more. This discrepancy underscores the broker’s commitment to securing a mortgage that aligns seamlessly with your financial situation and aspirations.

A reputable mortgage broker not only understands the nuances of mortgage rates and terms but also values the personal connection with you. They’re dedicated to finding the perfect balance between an affordable interest rate and terms that cater to your unique needs. At the same time, they recognize that their profession is driven by commission-based earnings.

Striking the Balance: Commission Adjustments and Your Mortgage

Picture this: your mortgage broker offers you the opportunity to lower your interest rate by altering their commission rate. For every 5 basis points they lower the rate, they sacrifice approximately 22 basis points from their commission. While this might appear as an act of goodwill, it underscores the intricate nature of broker earnings through mortgage broker commissions.

While the concept of brokers reducing their earnings to benefit you might seem commendable, it comes with a caveat. If brokers consistently trim their commissions, it could potentially jeopardize the sustainability of their business. After all, they have operational costs to consider and need to maintain a viable income stream.

In Conclusion: Nurturing Relationships in the Mortgage Landscape

So, what’s the key takeaway? Beyond the financial transactions, mortgage brokers focus on nurturing relationships. They’re your advocates in the maze of mortgages, striving to secure the best deal that meets your needs. While their earnings are influenced by various factors, including lender compensation structures and mortgage terms, their dedication to your financial well-being remains unwavering

Next time you collaborate with a mortgage broker, remember that they bring more than expertise to the table. They’re here to forge a strong, mutually beneficial relationship with you—one that steers your financial success.

Embark on Your Mortgage Journey Today!

Whether you’re on the cusp of homeownership or contemplating refinancing, connect with our skilled mortgage brokers. We at GLM Mortgage Group are committed to guiding you through the intricacies of mortgage choices, ensuring you lock in the best deal tailored to your unique circumstances. Contact us today to take the first stride towards your financial aspirations!

The post Decoding Broker Commissions: Your Guide to Understanding Earnings appeared first on GLM Mortgage Group.

Well before we talk about that, let’s dive into some history

Did you know that mortgage brokering dates back all the way to 1893 when a firm named Sonnenblick-Goldman was founded in the United States. As you could probably guess, the purpose of the firm was to manage and arrange debt financing for real estate projects which were difficult to finance. It was around this time that several people were denied loans by the banks.

At the time, so many people were desperate for loans, and with banks having strict guidelines on who would get accepted, certain professionals of the real estate industry took it upon themselves to create a system which could unite wealthy people with loan seekers.

Now, mortgage brokerages are a very common practice, so common in fact that you likely know a family or friend who works as a mortgage broker or within a brokerage firm.

Did you also know that banks used to not be involved in the mortgage market for residential real estate? Only insurance companies were allowed to until the Bank Act was passed in 1954.

As you can see, brokerages have not always looked the way they do today, but they have been here and they have only grown in popularity because of how essential and vital they have become. Not everyone uses a mortgage broker, but many people do. According to a recent study, 40% of home buyers use a mortgage broker to help in securing their new home. This number shows that a substantial amount of people have put trust in mortgage brokers to help them on their homeowner journey.

Now what does this journey really entail?

It can be hard to ask for help in anything, but in decisions as life changing as these it can be even more daunting to devise how and who to ask for help. Mortgage Brokers are here to help you with more than just the ins and outs, terminologies and jargon used in house hunting, but also give you strategies, help you understand your needs and create a responsible budget.

It is a mortgage broker’s job to always stay ahead of the game and know all of the products available to a wide variety of clients.

Mortgage Brokers;

• Are professionals who maintain a high level of professionalism and keep up with all of the offerings and developments within the industry.
• Always have an established place of business (sometimes within the digital world), and have chosen this as their career because they are committed to the industry and the needs of their clients.
• Have a wide array of products from which to choose. These could be mortgage banks, private sources, independent lenders, etc, and a lender will deal with a broker only after a thorough selection process checking references, interviewing and obtaining a copy of their broker license

But what is the biggest thing you should look for in a Mortgage Broker?

Trust. Trust is essentially and it is important to have a good interpersonal rapport with the broker you choose. Without trust, credibility and relationship forming, the process will not only be longer but it also may not be very successful.

The problem is, finding a mortgage broker is not hard, but finding exceptional help that you can trust could be. For this reason, we offer free consultations for everyone. If you enter a consultation and realize we may not be the best fit, we totally understand, but our hope is that the consultation will help you realize that we are a team that you can not only trust, but also be assured we are getting you sound advice on top of the best rates at the best price.

Give us a call or email at any time. We look forward to being a part of your home ownership journey.

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Increase of Prime Rates – What Does This Mean?

With the increase of prime rates over the last few months, there’s a lot in question. Many people are questioning if they should have a fixed rate mortgage or a variable rate mortgage. There are many factors to consider when choosing between fixed and variable rates, this blog will help make your decision more simplistic.

Pros and Cons

When looking at which rate to choose, you’ll need to consider the pros and cons of both rates, and what may be the most beneficial for your mortgage financially.

1. Pros and cons of a fixed rate

• Pros
  • You have stability for the term of your mortgage. Your mortgage payment will remain the same and there will be no charge to your mortgage payment each month.
• Cons
  • A fixed rate is typically higher than a variable rate
  • If you were to break your mortgage you may be charged at interest rate differential. An IRD can be a significant cost and it is typically 4.7% of the balance. This works out to $4,700.00 for every $100,000.00 that you have borrowed.

2. Pros and cons of a variable rate

   • Pros
     • A variable rate is typically lower than a fixed rate.
     • Statistically a variable rate has outperformed the fixed rate for the last 40 years.
     • You have the option to lock into a fixed rate at any point in the term of your mortgage at no cost.
     • If you break the term of your mortgage early your penalty is almost 3 months interest.
   • Cons
     • Your rate will change as the Bank of Canada adjusts the prime rate.
     • Pending on the lender your payments can fluctuate.
     • As prime rate changes the amount going to interest and principal will vary.

Which Rate Is Best for You?

Look at the case study below:

Prime Increase of 0.75%

• The lowest 5-year variable rate is 3.75 with a monthly payment off $2,123.36
• For every $100,000 mortgage the monthly payment increases by $26.00
• If you have a mortgage of $413,000 your monthly payment will increase by $107.38
• The monthly payment will come out to be $2,230.74

Fixed Rate – Should You Lock In?

• Todays best 5-year fixed rate is 5.63%
• For a Mortgage of $413,000 – monthly payment will equal to $2,568.34
• This monthly payment is HIGHER with the Bank of Canada increase to Prime by 0.75%
• Continue to choose variable!

It is PARTICULARLY important to have a clear understanding of the implications when it comes to choosing between variable mortgage rates and fixed mortgage rates and what’s best for you. It makes a significant difference in future planning and can impact you in incredibly substantial ways.

At GLM Mortgage Group, we know what questions to ask. We have relationships with the lenders that you know about and the lenders you don’t. We would be pleased to educate you on the financial options available to you. We want you to make the best decision possible on the mortgage that you are committing to. Call us anytime for a FREE consultation on the mortgage products available to you.

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A mortgage is a type of loan that is used to purchase or refinance property. A few basic features of a mortgage include the purchased property, which is always used as collateral, and regular payments to the lender are required. Mortgages can sometimes cover the cost of property taxes and insurance premiums. Mortgages are quite substantial monetarily. You can even get a mortgage that is worth millions.

Fixed vs Variable Interest Rates

A fixed interest rate means that the interest rate applicable to your mortgage will be consistent throughout the mortgage’s life, regardless of any external activity. A variable interest rate will change as your bank’s prime rate changes. More indicatively, the interest rate fluctuates based on the decisions the Bank of Canada will make. The Bank of Canada will make their decision based on how the economy is, this way your mortgage interest rate will essentially fluctuate based on external activity. Generally, when the prime rate increases, your mortgage variable rate will increase. Therefore, when the prime rate decreases, your mortgage rate will decrease.

It’s difficult deciding between a fixed and variable interest rate when looking into a mortgage. It’s a tough decision to make, due to the not knowing what the future holds for any mortgage and whether the future has a great impact on interest rates. If you feel that economic conditions will be favourable in the future, it’s best to go with a variable interest rate. In other cases, if you feel the economic conditions will be unfavourable, it’s better to go with a fixed interest rate.

Open vs Closed Mortgages

Having an open mortgage means you can pay off your mortgage balance early without any penalties. A closed mortgage only allows for a certain amount of payment each year, in addition to the regular payments. Although, some closed mortgages will not allow lump sum payments at all.

Borrowers usually choose a closed mortgage because they have lower interest rates. Closed mortgages have lower interest rates because the lender won’t have to worry about the lost interest if a borrower were to pay off the loan early. However, if you expect that you will have the money to make large lump sum payments towards your mortgage, then going for an open mortgage is a better option. Lump sum payments go towards the principal balance only, you will end up paying less interest overall this way.

Property Transfer Tax:

• Property Transfer Tax is a one-time tax paid to Province of BC by the purchaser whenever there is a change of ownership or change in shared % interest in a property.
• Property Transfer Tax is calculated based on the fair market value of the property at the time of transfer.
• The percentage of the tax that you owe is based on the % shared ownership or shared interest you have.

  One important point to keep in mind is that Property Transfer Tax is provincial and is NOT the same as the annual Property Tax which is paid to the local municipality every year.

Steps Included In Getting A Mortgage

Pre-Qualification: This is ideal when you’re only thinking about buying a home. A lender will collect basic information about your finances and then give you an approximate figure for how much they’d potentially be willing to lend you to buy a property.

Pre-Approval: Getting pre-approved for a mortgage is more formal than pre-qualifying. In this stage a lender will verify the financial information you provide them and run a credit check. If you’re pre-approved it indicates that the lender is committed to providing you with a loan, though the final amount they’re willing to lend you and the terms of the mortgage are subject to change based on an actual property valuation as well as market fluctuations.

The Mortgage Stress Test: This is a calculation of whether you can still afford to pay your mortgage if rates increase. The results of this stress test will determine your qualifications for the mortgage you’re looking to take and applies to all home buyers, and what we need to do for debt servicing, including those who make a 20% down payment on their home.

Down Payment: This is the amount of money you’re required to pay upfront when buying real estate. The bigger your down payment, the smaller the mortgage you’ll need. For example, if you spend less than $500,000 on a home, you’re only required to put 5% of the purchase price down.

Mortgage Rate: This is the interest rate you’ll pay on your mortgage. This will determine how much you pay in interest over the life of your mortgage. Your mortgage rate may change depending on if it’s fixed or variable.

Closing Costs: These are expenses that you’re required to pay out of pocket leading up to your closing date. Examples of closing costs include legal fees, appraisal fees, title insurance, a home inspection, and movers. It’s a good idea to budget between 1.5% and 4% of a home’s purchase price towards closing costs.

It is VERY important to have a clear understanding of the implications when it comes to important factors to getting a mortgage and how it can affect you. It makes all the difference in future planning and can impact you in very significant ways.

At GLM Mortgage Group, we know what questions to ask. We have relationships with the lenders that you know about and the lenders you don’t. We would be pleased to educate you on the financial options available to you. We want you to make the best decision possible on the mortgage that you are committing to. Call us anytime for a FREE consultation on the mortgage products available to you.

The post Guide To Getting A Mortgage In 2022 appeared first on GLM Mortgage Group.

To get an idea of how much you can afford, you’ll need to know your taxable income, along with any outstanding debts and monthly payments.

1. First (for purchasing a principal residence) calculate 39% of your income for use toward a mortgage payment, property taxes and heating costs. If applicable, include half of estimated monthly condominium maintenance fees.

1. Next, make a second calculation, this time 44% of your taxable income. Then deduct all of your monthly debt payments, including car loans, credit cards, and line of credit payments.

1. The lesser of the first or second calculation will be used to help determine how much of your income may be used towards housing-related payments, including your mortgage payment. These calculations are based on lenders’ usual guidelines.
2. A quick calculation can also be as follows: for every $20,000 of income earned, you can borrow $100,000. For every $400/month payment you have or $15,000 debt you carry, this will decrease your borrowing power by $100,000.

In addition to considering what the ratios say you can afford; we’ll help you determine exactly how much debt you’re comfortable servicing. If that amount is less than 39% of your income, you may want to settle for the lower amount rather than stretch yourself financially. Make sure you don’t leave yourself ‘house poor,’ with not enough funds to spend on other things, like vacations. Structure your payments so that you can still afford simple luxuries. You’ll also need to qualify for your mortgage amount, with new stress-test regulations released by the federal government.

Yes! There are Stated Income programs, curated for Self Employed individuals that report lower income to Revenue Canada to take advantage of tax strategies. It allows their Gross Business Revenues to be used for qualification. This program requires a minimum 10% down payment, strong savings and healthy credit history.

A home inspection is where an inspector will come in and inspect the home for any damages in its foundations, walls, ceilings, attics, crawl spaces, etc. 

A home inspection does come with a fee, but we recommend it because it can give you more information about the home and help you avoid potential problems that could be costly in the future.

5% on the first $500,000 and 10% on the remainder up to $1,000,000. Any purchase over $1,000,000 requires a 20% down payment.

Mortgage default insurance is legally required on mortgages with a Loan-to-Value (LTV) ratio greater than 80% (often called an insured mortgage). It protects lenders against the risk of mortgage default and foreclosure by the borrower.

Usually paid by the borrower, the premiums for default insurance range from 0.50% to 7.0%. They can be added directly onto the mortgage amount or paid as a lump sum before the mortgage is advanced. This type of insurance is not the same as mortgage life insurance.

In Canada, mortgage default insurance is provided by three companies: Canada Mortgage and Housing Corporation (CMHC), Sagen and Canada Guaranty. CMHC is a Crown corporation, while the other two are approved private corporations.

It can be a challenge to secure a mortgage with a prime lender with past bankruptcy, especially if the bankruptcy involved a mortgage. That being said, 2 years after bankruptcy discharge and a perfect credit history from that point onward, there are solutions!

Yes, if child support is paid by you to another person, this amount would typically be deducted from your total income before determining the size of a mortgage you can qualify for.

If you are receiving child support from another person, that amount is typically added to your total income before determining the size of mortgage you can qualify for – provided proof of regular receipt is available for a period of time determined by the lender.

Yes, you can, but you will need to have them in your possession and possibly a signed letter confirming that those funds are a true gift and not a loan.

A pre-approved mortgage is a solid idea of the maximum amount of mortgage that you qualify for, along with an interest rate guarantee from a lender for a specified period (usually 60 to 120 days). It’s usually one of the first steps a home buyer should take when looking for a home or property.

A pre-approval does not absolutely guarantee that you’ll receive the funds (as the final amount may be subject to conditions), but it’s a very good indicator of the maximum amount you should consider when looking to purchase.

Your pre-approval process requires that you provide financial and credit score information to determine what size of loan you’re eligible for, based on lender and government requirements and regulations. And your down payment will be factored into the amount.

Most realtors prefer that you have a pre-approved mortgage in place before they take you out looking for a home or property. That way, they know they’re showing you the right properties within your affordable price range.

You can start the renewal process as early as 120 days before the end of your current term, even if you have not received your renewal offer. Lenders are legally required to send you your renewal statement at least 21 days before the deadline. Starting early would give you more time to negotiate for a better rate or mortgage fit.

Yes! Each lender has specific pre-payment privileges. Some allow you to pay up to 20% of the price of your principal every year or increase your payment frequency or payment amount by an allotted amount.

• • Down payment
  • Deposit
  • Home inspection fee
  • Possible appraisal fee
  • Mortgage default insurance
  • Land Transfer Tax
  • Legal fees, disbursements, and title insurance
  • Other costs may be involved in closing your mortgage
  • Moving costs

   

  All of these fees vary, but it is important to recognize them.

• Your mortgage payment
• Property taxes
• Utilities
• Home insurance
• Maintenance and Upkeep

A mortgage term can be anywhere from six months to ten years. A longer-term mortgage is worth considering if you have a busy life and don’t have time to watch mortgage rates. On the other hand if you like flexibility, a shorter-term mortgage will often allow you to take advantage of lower rates to save money, while being less of a term commitment.

We understand it can be a tough decision to make which is why it’s best to speak with a Mortgage Group with GLM Mortgage Group and discuss the different options and which strategy is best for you.

The post 14 Home Purchase FAQs appeared first on GLM Mortgage Group.

The Mortgage Pre-Approval

Becoming a homeowner is a life-long dream for many. With all new experiences, there’s uncertainty, and you may second-guess yourself once or twice. You’ll be interviewing realtors, looking at homes, worrying about bidding wars, and of course, qualifying for a mortgage.

Getting a pre-approval is one of the best things that you can do to simplify the process and give yourself more confidence when purchasing a home. A pre-approval lets you know how much you can borrow with minimal risk. However, you’ll want to understand the pre-approval process before you get started.

5 Things to do in a Mortgage Pre-Approval

1. Apply for a mortgage pre-approval first

The first thing you should do is apply for a mortgage pre-approval. If you find a home you like, you’ll want to move quickly. Being pre-approved for a mortgage removes an extra step in the process.

Being pre-approved helps you know and understand how much you can afford to spend. However, the hard limit will always be how much the bank will approve you for – a mortgage pre-approval gives you that.

A mortgage pre-approval can be done within an hour if you have your documentation together. Get in touch with a Mortgage Broker near you to get started.

2. Allow your Mortgage Broker to Shop Around

As you’ll see several homes before settling on ‘the one’, you should shop around for the best mortgage rate. Don’t just go to your local bank branch and expect to receive a great deal. Do your research and use a Mortgage Broker who will negotiate on your behalf.

You’ll generally have a 90-to-120-day period where your offered rate will be held for you. This is when you should begin house-hunting.

3. Assemble your documentation

Collecting the documentation needed for a mortgage pre-approval and application can take time. In this case, it’s best to start getting the necessary documents together as soon as possible. Ask your mortgage broker what documents are required to finalize your mortgage and start gathering it all in one place.

The following list are needed to get started:

• Identification
• Bank account and investment statements
• Proof of assets
• Proof of income
• Information about your debt

4. Stay in touch with your broker

Stay reachable in case your Mortgage Broker has any questions about your documentation. If you aren’t available, they may make assumptions about your intent, and reject your mortgage pre-approval. If you absolutely must leave town, make sure to inform your Mortgage Broker in advance.

5. Read the fine print

Once you’ve been pre-approved, your Mortgage Broker will send through your pre-approval document. This document will outline the interest rate you’ll receive, the loan terms, and the mortgage amount you’ve been pre-approved for.

4 Things NOT to do in a Mortgage Pre-Approval

The path to ruin is paved with good intentions, but it’s also paved with silly mistakes. Below are four rules you should stick with during the pre-approval process.

1.      Don’t get pre-approved over your budget

Don’t get approved for a mortgage pre-approval at your maximum purchase price. Do your own calculations, figure out how much you can afford monthly (don’t forget the other costs associated with homeownership, not just the mortgage) and go from there.

2. Hold off on major purchases

Once you’ve submitted your documentation to your Mortgage Broker, your financial situation shouldn’t change from pre-approval to loan finalization. Any changes to your financial situation could ultimately result in loan rejection, even if you were initially pre-approved. To avoid rejection, don’t make any major purchases that change your debt service ratios.

3. Don’t apply for new credit

You shouldn’t apply for new forms of credit, like a personal loan or credit card, and don’t co-sign a loan for a friend or family member. Your debt level and available credit are both factors in mortgage approval, so increasing them may risk your pre-approval.

4. Don’t quit or change jobs

Finally, try to avoid changes to your employment status after you’ve been pre-approved. Steady and predictable income is crucial to most mortgage applications. Changing jobs or becoming self-employed will most likely throw a wrench into the mortgage approval process. Instead, if possible, hold off changing employers or starting a company until after you have the keys to your new place. If you have a job offer that’s just too good to pass up, you can learn more about how to handle this situation without necessarily jeopardizing your pre-approval.

It is VERY important to have a clear understanding of the implications when it comes to a Mortgage Pre-approval and how it can affect you. It makes all the difference in future planning and can impact you in very significant ways.

At GLM Mortgage Group | Dominion Lending Centres, we know what questions to ask. We have relationships with the lenders that you know about and the lenders you don’t. We would be pleased to educate you on the financial options available to you. We want you to make the best decision possible on the mortgage that you are committing to. Call us anytime for a FREE consultation on the mortgage products available to you.

The post The Mortgage Pre-Approval – Important Items to Understand appeared first on GLM Mortgage Group.