5 Reasons Why You Should Use a Broker

A lot of homebuyers, especially those who are buying a home for the first time, will go to their bank to apply for a mortgage. What they don’t realize is that they could be missing out on better mortgage rates and packages than their lender are offering them. Whether it’s for a first-time mortgage, second mortgage, renewal, or refinance, if you want to get the best deals possible, you really should be going to a mortgage broker. Our Ottawa mortgage broker team is here to tell you why.

Much Lower Rates 

A mortgage broker works to find the mortgage package that is best for you and your financial situation. They also have access to hundreds of lenders offering a variety of mortgage packages. This means they can offer you the best rates out there. Many brokers will get a bonus for working with certain lenders, which means they can pass those savings down to you. It also allows you to compare a number of mortgage options.

It Will Save You Time and Money

Shopping around and applying to different lenders can take up a lot of time and could cost you more in the end. It also impacts your credit score when you apply for many loans in a short period of time. When you use a broker, they do the shopping around for you in as little as a few minutes. They take care of the paperwork needed and can find mortgage packages that aren’t offered to the public. Because they are able to find better rates, it will save you money in the long run.

Protects Your Credit Score 

As mentioned above, when you apply for any type of line of credit, it leaves a hard check on your credit record. When you have too many hard checks in a short amount of time, it can lower your credit score. Since the rates that you get for a mortgage are based on your credit score, a lower one means you end up paying more. When you use a broker, your credit report is only accessed once and protects your credit score from being impacted, while still being able to see offers from different lenders.

Cut The Costs

Lenders will usually compensate a broker directly, which means those mortgage costs are not passed on to the homebuyer. In cases where a lender does not compensate the broker directly, those fees may be passed on to you for certain mortgage packages. However, a good broker will always make you aware of any charges upfront.

Advice that is Unbiased

When you apply for a mortgage using a lender, the offers and advice they give can be a bit biased because they want to make the most they can out of a mortgage deal. Sometimes, this leads to you being sold a mortgage package that really isn’t the best for you. Brokers, on the other hand, work for you and their main priority is to give you advice that is unbiased. For a broker, it’s referrals from clients that matter. They will go over your finances and needs and find something to match those requirements. With a broker, you know that you are getting the best advice and mortgage package for you.

You can see why it makes sense to use a mortgage broker when you are looking for a mortgage loan. If you have questions about your mortgage options, give our Ottawa mortgage broker team a call today!

Characteristics of Great Mortgage Broker

The main goal of our Ottawa mortgage broker team is to work in your best interests. This means finding a mortgage package that benefits your situation the most. When you are shopping around for a mortgage, you need to find a broker who will do their best for you. There are certain characteristics that you should look for in a broker before you decide to work with them.

Putting Your Best Interests First

As I mentioned above, one of the key characteristics of a great mortgage broker is their ability to know what is best for their clients and then act on that. This means they need to have the experience and knowledge necessary to find mortgage options that will suit your financial circumstances and needs.

Sadly, there are some mortgage brokers who put their needs before their clients. This can result in being given mortgage options that aren’t best for you simply because they will get more commission by selling that particular mortgage package to you. It could end up costing you more in the end.

Detail Oriented

The mortgage process is quite complex and a mortgage broker needs to have that sharp eye for details so that all of the right paperwork is submitted at the right time and transactions take place as they should. All it takes is one major detail to be missed and the whole process is jeopardized. It goes beyond the paperwork though. A great mortgage broker needs to keep you in the loop, let you know about any changes, and should always make sure you understand those little details as well.

Honest and Transparent 

Another characteristic of a great mortgage broker is honesty and transparency with everything they do. If a mortgage broker is promising you more than they can actually deliver because they are desperate to close a deal, that is a warning that they could be hiding things, such as fees, or making changes without telling you. A great mortgage broker is straight and upfront about everything they are doing. They will also tell you if they are unable to do something for you and are realistic when it comes to what you are able to qualify for with a loan. They will give you both the good and the bad.

Upfront with Fees

A broker should always be open about any fees you may be charged from the start. There are some situations where a broker will be given a compensatory fee working with specific lenders for example. This is something they need to let you know. If you have a broker who seems to break out into a sweat every time you ask about fees, it could be a red flag that they aren’t telling you everything.

Your finances and financial situation are a delicate and private area of your life. It makes sense to choose the best broker for the job, who is trustworthy, will work with you and is transparent about everything they are doing.  If you’re looking for an Ottawa mortgage broker that you can trust, give our team a call today!

Top First Time Buyer Pitfalls to Avoid

Our Ottawa mortgage broker team knows that buying your first home can be both exciting and stressful. It involves a lot of paperwork and knowing what pitfalls to avoid along the way. If you aren’t aware of what to watch out for, it can end up costing you thousands more than necessary, and hours of frustration. In the worst-case scenario, you could face disappointment and not get the home you had your heart set on, because of a pitfall that could have been avoided. We have a list of the top pitfalls to avoid when buying your first home to help you out.

Pitfall 1 – Not Getting A Mortgage Pre-Approved 

Getting yourself pre-approved for an Ottawa mortgage can play an important role when buying your first home. Sadly, many new home buyers skip this step, which can not only make the buying process longer but also have seller’s choosing someone with a pre-approval over your bid. A pre-approval is something seller’s like to see because it’s more of a guarantee that your bid won’t fall through at the last minute. It gives you an edge over those who don’t have a pre-approval and you also know how much you can realistically afford.

Keep in mind that a pre-approval is not the same thing a pre-qualification. Having a pre-qualification means that you have gone through the general steps of checking your credit score. A pre-approval means your financials were gone over in order to determine how much you have been approved to borrow. 

Pitfall 2 – Using the Sellers Real Estate Agent 

It’s not in your best interest to use the seller’s real estate or listing agent, which is a mistake we have seen many new homebuyers make. The reason for this is that you risk being in a dual agency situation, with the agent stuck between representing yourself and the seller. 

The reason this is an issue is that the agent involved can’t really give you advice on what they feel the home their seller is offering is really worth. They also have their hands tied regarding negotiating requests for any repair work to be done once a home inspection has been done. Using the seller’s agent basically means you are giving up your rights to representation.

Pitfall 3 – Forgetting to Budget for Additional Expenses 

Knowing how much you will need to buy a home and covering a downpayment aren’t the only things you need to factor into your budget. You need to have money set aside for the day to day running of the home too. You need to consider how much your monthly utilities will be, the costs of general maintenance, insurance for the home, and so on. We’ve seen buyers purchase a home at the high end of their budget, only to open themselves to financial stress because they didn’t factor in these things as well.

Pitfall 4 – Forgoing a Home Inspection

Another important step that some new homebuyers forgo are paying for a home inspection. This is really an important part of the home buying process though. You may feel like you are saving yourself some money at the time, but not having one can lead to bigger expenses, not to mention unwanted surprises, later on down the line. A home inspector can tell you whether a home is sound or will end up being a money pit full of repair issues. They will look for things like mould problems and structural problems that you can’t see yourself. 

Pitfall 5 – Making Financial Changes Before Closing

Making any type of financial change before closing your deal can jeopardize you. Just because you have been pre-approved does not mean everything is in the bag. Before closing, the lender will go over your credit report again to see if there have been any major changes. They look for things like opening a new line of credit, changing jobs, or buying big-ticket items on credit. All of this can change how much you are eligible for with your mortgage and could see everything fall through at the last minute. Save those changes for after you have closed on the mortgage and home purchase.

If you have questions about buying a home for the first time and need to tips, give our Ottawa mortgage broker team a call today!

Getting Your Finances Ready for Your First Home

Having worked as an Ottawa mortgage broker for many years, I know what a big financial commitment it is to buy your first home. The process of applying for a mortgage can feel stressful and overwhelming at times too. This is why it’s important to not only get your documents in order but your finances as well. This means doing a bit of research on your options, budgeting, and cleaning up your credit. All of this should be done six to nine months before applying for your mortgage. Let’s look at how you can get your finances ready to buy your first home.

Get familiar with your budget

One of the most important steps to getting your finances ready is to know what your budget is. All too often, I have seen home buyers start looking for a home before they even know what they can really afford. This just leads to disappointment and a lot of time wasted. Take the time to go over your monthly incoming and outgoing funds first. When budgeting for a mortgage, you need to make sure you factor in fees and expenses that go with it. Knowing what you can afford will help you cut down the time it takes to find a home and you won’t be faced with disappointment when you find you can’t qualify for the amount you want. 

Clean up your credit

Another main step to take is pulling your credit history well before you apply for a mortgage. You will need to go over it carefully to be sure there are no errors or discrepancies that are affecting your credit score. Look for accounts listed as not paid that you have paid off, or debts that may not be yours. Errors need to be disputed with a credit bureau and this can take some time. You should also look at how many high-interest credit cards you have and try to pay these down. It will help bring your credit score up, which can then get you a better interest rate on your mortgage. 

Getting pre-approved

Being pre-approved for a mortgage amount is something many overlooks, but it can give you an advantage when it comes to putting a bid in on a home. You have the security of knowing just how much you have to work with, and most sellers and real estate agents will choose someone who has a pre-approval over someone who doesn’t. It also gives you some time to work on your credit should you find you can’t get a pre-approval for the amount you had hoped. 

Savings 

In Canada, owning a home comes at a high cost. It has become a bit harder to qualify with the mortgage stress test changes as well. Not everyone, especially first time home buyers, can come up with a 20% down payment to buy a home. The thing is, the more you are able to put down, the better the interest rate you can get. This is why you should consider opening a savings account and regularly put money aside to build up that down payment amount you can offer. It’s also important to set aside money for the expenses of applying for a mortgage separately so you aren’t dipping into your down payment fund.

Know your options

In Canada, many mortgages come with options and features that can be useful to you. Take the time to become familiar with these options and what you may be able to qualify for, such as special funding for first time home buyers. Have a look at the pros and cons of variable and fixed-rate mortgages, as well as loan term times to see what would work best for you. Many websites have online mortgage calculating tools that can help you with this to give you a better idea of what you want. 

If you have questions about mortgage rates or how to get your finances in order, give our Ottawa mortgage broker team a call today!

How to Know if You Are Ready to Buy Your First Home

Making the decision to become a homeowner is a major financial accomplishment. But how exactly are you supposed to know if you are ready to buy your first home? Well, you should first speak with a mortgage professional so they can review your finances and help provide some professional advice.

Your local Ottawa and Oshawa mortgage broker with The Mortgage Emporium has also listed some other tips for knowing if you are ready to buy your first home.

Tip #1: Stable Income

Having a stable income is vital when beginning the application process. Your broker will want to be sure you have a sufficient amount of savings so you can make payments on-time towards your Ottawa or Oshawa mortgage. Your income also determines what type of home loans you can qualify for, so be sure and have all your financial documentation organized before you attend your first meeting with a mortgage broker.

Tip #2: Good Credit Score

The other main factor that has a big impact on what mortgage options you could be approved of is your credit score. The higher your score is the better rates you may receive and the more options you may qualify for. Therefore, if you already have a good credit score, then you could be ready to buy your first home and should begin your application for an Ottawa or Oshawa mortgage.

Tip #3: Minimal Amounts Of Debt

Depending on how much debt you have accumulated may affect the status of your application and postpone your ability to become a homeowner. So, before you begin applying for a home loan, you should first try to lower the amount of debt you have and pay off as much high-interest loans as you can. In doing so, this will also help improve your credit score.

Tip #4: Ready To Settle Down

A good sign of knowing if you are ready to become a homeowner is whether or not you are ready to settle down. If you like to move around and never spend longer than a couple of years in one place, than buying a home may not be the best financial option. However, if you are planning on being in one area for at least five years, then you may want to start looking at different homes to purchase.

Contact Us

If you would like to receive more tips on how to know if you are ready to buy your first home or if you are interested in beginning your application for an Ottawa or Oshawa mortgage, please contact The Mortgage Emporium team at 888-421-9330.

Canadian Real Estate Market Forecast 2017

The Mortgage Emporium – Mortgage Broker Ottawa 

As trusted Ottawa Mortgage Brokers, we work tirelessly to stay abreast of what’s happening in the market place. Allowing us to offer sound and quality advice to our clients. Many home owners, and prospective home owners are wondering what a Canadian Real Estate Market Forecast in 2017 would like.

2017 Canadian Real Estate Market Forecast

Per the Canadian Real Estate Association (CREA), national sales are forecast to drop in 2017 by 3.3%, compared to the previous year. Specifically, in Ontario, they are looking at home sales to decline in Ontario by 2.7%. To take a look at the full statistics and forecast by province click here to visit CREA’s website.

In its annual year-end report, CREA states: “Transactions in B.C. and Ontario are anticipated to remain strong but fall short of this year’s record levels due to deteriorating affordability, an ongoing shortage of affordably priced listings for single family homes and tightened mortgage regulations.”

Most Canadian markets are leaning towards a flattening out of property prices, with some areas of the country experiencing a decline in both sales activity and prices. As other areas continue to experience price gains, albeit at a much slower pace than we’ve seen in recent years.

Consider the slowing of the Calgary real estate market. We expected aggressive price drops when oil prices crashed, however the market didn’t suffer all that much. Sure, there were price decreases, most neighbourhoods saw price reductions that were less than 5%.

The biggest factor in the predicted 2017 slowdown are the tighter mortgage regulations that were introduced in 2016. “Tightened regulations are expected to reduce the number of first-time buyers who qualify for mortgage financing, particularly in pricier markets, where there is a severe shortage of lower-priced listings.” Click here to read our blog about the change to the Canadian mortgage rules.

If you’re thinking about purchasing a home or refinancing the mortgage your currently have, our Ottawa Mortgage brokers will take the time to discuss your personal and individual financial situation. This way we can offer you the best advice and guidance.

Contact Us Today! The Mortgage Emporium – Mortgage Broker Ottawa

 

Changes to the Canadian Mortgage Rules

Once again we have Changes to the Canadian Mortgage rules. You’re probably wondering how the new changes will affect your ability to get a mortgage. Mortgages have always been complex that’s why I always recommend working with a licensed Ottawa Mortgage broker like myself.

Stress Test

Home buyers who are seeking an insured mortgage, are now subject to a mortgage rate stress test beginning Oct. 17th 2016. Regardless of how much they have for a down payment. Previously if your down payment was less than 20%, you would have been required to pass a stress test and have mortgage insurance backed by the federal government through the Canada Mortgage and Housing Corporation. You can visit their website by clicking here.

The new stress test is designed to measure whether the buyer could still afford to make payments if mortgage rates rose to the Bank of Canada’s posted five-year fixed mortgage rate. That rate is usually significantly higher than what typical banks or other lenders can offer. For instance, TD has a five-year fixed rate mortgage at 2.59%, while the Bank of Canada’s rate is 4.64% per cent. The test also sets a ceiling of no more than 39% of household income being necessary to cover home-carrying costs such as mortgage payments, taxes and utilities.

Low-Ratio Insurance

Starting Nov.30th 2016, new criteria for low-ratio insurance will take effect. To qualify, the mortgage’s amortization period must be 25 years or less, the purchase price be less than $1 million, the property be owner-occupied, and the buyer have a credit score of 600 or more. Previously, buyers with more than a 20% down, opting for mortgage insurance have escaped such scrutiny. Being able to obtain low-ratio insurance sold through two private insurers, but backed by the federal government, subject to a 10 per cent deductible.

Tax Implications

These new rules also have major tax implications. Beginning this tax year, all home sales must be reported to the Canada Revenue Agency. Click here for their website. The gains from sales of primary residences will remain tax-free. The government is aiming to block foreign buyers from purchasing and flipping homes while falsely claiming the primary residence exemption from capital gains tax.

Despite the changes, whether you’re a first-time home buyer, seasoned investor or refinance an existing property, you’re in good hands. Together we’ll review the best options based on your specific financial situation and discuss how the Changes to the Canadian Mortgage Rules effect you.. Contact us today.

Canada’s Waning Growth Puts Balanced Budget at Risk

Theophilos Argitis, Bloomberg News | Jan 21, 2013 1:46 PM ET
More from Bloomberg News

The Mortgage Emporium – Ottawa Mortgage

Aaron Vincent Elkaim/The Canadian PressBudget planners are concerned that weaker revenue may outpace Finance Minister Jim Flaherty’s ability to offset it through accelerated spending cuts.

Canada’s revenue outlook has deteriorated since Finance Minister Jim Flaherty updated his fiscal plan in November amid signs the economy has slowed, making it more difficult to bring the budget into balance, a person with direct knowledge of the government’s budget planning said.

Budget planners are concerned that weaker revenue may outpace Flaherty’s ability to offset it through accelerated spending cuts, especially since the government pledged not to curb transfers to individuals and provinces, the person said on condition they not be identified because they aren’t authorized to speak to the media on the subject. Still, the goal remains to balance the budget by 2015, the person said.

Tax revenues are just not going to be maintaining the pace you would have expected just six months ago

Canada’s economy probably had its worst six-month performance since the end of the 2009 recession in the second half of last year, as exports fell and uncertainty about the global expansion prompted businesses to curb spending, leading economists to scale back their expectations for 2013.

“Tax revenues are just not going to be maintaining the pace you would have expected just six months ago,” said David Watt, chief economist at HSBC Bank Canada.

Flaherty, seeking to return the country to surpluses while ensuring the economy isn’t hurt by fiscal tightening, already scaled back revenue projections in a November budget update by $7-billion for the next fiscal year and by $36-billion over five years, citing lower commodity prices.

Optimistic Forecast

In that update, growth projections for 2013 were cut to 2% from a March forecast of 2.4% when the budget for the fiscal year beginning in April was released. That 2% now looks optimistic.

Slower growth will sap $22-billion a year from Canada’s economy, budget watchdog warns

Parliamentary Budget Officer Kevin Page says in a new report that he anticipates economic growth will brake to an annual rate of 1.6% in the second half of this year, after slowing to 1.8% in the first half.

Read full story here.

Growth in 2013 will probably be closer to 1.7%, according to the median of the forecasts of economists at six Canadian banks: Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Nova Scotia, BMO Capital Markets, Royal Bank of Canada and HSBC Canada.

A 0.3 percentage-point reduction in 2013 growth projections may create an additional budget shortfall of more than $1-billion in the next fiscal year and almost $4-billion over three years, according to Bloomberg calculations based on a formula provided by the finance department in its last update. A one-year 1 percentage-point reduction in growth narrows the budget balance by $3.9-billion in the first year and $12.8-billion over three years, according to that formula.

“Growth has not been as firm as they had been expecting,” Watt said. “As a result, the fiscal situation has been a bit more of a challenge.”

Budget Balance

Flaherty has said he will balance the budget before the next federal election, expected in 2015, by cutting departmental expenses and forgoing new spending. A government pledge not to raise taxes or cut transfers to individuals and provinces is handcuffing the government’s ability to meet that goal as revenue wanes.

Direct program spending, which excludes transfers and makes up just under 50% of federal government spending, is projected to decline to $118.9-billion in the fiscal year that begins April 1, down from $120.8-billion projected in the 2012-13 fiscal year, then remain little changed through 2017, according to the November fiscal update. As a share of GDP, direct program expenses will decline to 5.4% by 2017, the lowest since at least 1967, from 6.7% this year.

The finance department also scaled back its revenue assumptions in the update, after final figures for the fiscal 2011-12 showed the government’s revenue as a share of the economy shrank to its lowest in at least 45 years.

Canada now projects total tax revenue as a share of GDP will average 14.3% over the next five years, ranging from 14% in the current year to as high as 14.4% in 2015. That ratio has averaged about 15.5% over the previous 10 years.

Bloomberg