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.

Three Reasons You Should Consider a Mortgage Broker

Generally, there are two ways to get a mortgage in Ontario. You can use a traditional lender, like a bank or a Mortgage Broker. Mortgages are complex and you’re going to have questions. So here are Three Reasons You Should Consider a Mortgage Broker

A Mortgage Broker will save you money

There are many fees that are typically associated when obtaining a mortgage, ranging from application fees to appraisal fees. Often brokers can potentially help by reducing or sometimes even eliminating some of the fees mentioned above thanks in large part to our relationships with a variety of lenders. Brokers are generally able to offer their services for no cost because we only get paid once your mortgage loan is approved and becomes official. When this happens, it is the lenders duty to compensate brokers.

Keep control of your time

Your personal time is important. A licensed mortgage broker will do all the leg work for you. From shopping for the best rates or working to find the best mortgage product for you. Brokers will save you a considerable amount of your own personal time during the mortgage process. Once we sit down together and draw out a plan of your goals and wishes, my team will work to seek the best mortgage based on your unique situation.

From great to not so great credit

It’s true that a great or good credit score makes it easier to get approved, however it certainly isn’t required. Most people think to qualify for a mortgage loan they need to have a tremendous credit score. A mortgage broker like myself can help you get a loan even if your credit score isn’t great. It will all come down to your specific financial situation.

Your trusted Ottawa Mortgage Broker. For a free, no obligation consultation, contact us today!

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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