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Why Do Lenders Ask For so Much Paper for Approvals?

March 18, 2018
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This is a question we get all the time and I have to say we even ask that ourselves.  Why so much paper is needed for mortgage approvals now?

The answer is, there are more than one answers to that question so we will list the ones that make the most sense.

  1. Fraud – mortgage fraud including identity theft, documentation hampering, untruths all contribute for the need to supply proof that what you say and do is what you said and did.  Lenders have no other way of knowing unless they see the proof and for now and the foreseeable future this is the way things are going to be.  We will all have to live with that and if you want the mortgage we will need to comply
  2. Situations vary with employments now, how you are paid, technology has eliminated the paper for your employer in many ways including pay stubs and employment letters.  thus the ease in being able to manipulate those documents
  3. Purchase contracts have gotten more complicated and also the purchaser situation and therefore more ways needed to make the deal work, more paper to prove.

Bottom line, would you lend hundreds or thousands or dollars to someone and not ask them for employment proof, down payment proof and what you are buying.

Jessica and myself at Advance Mortgage understand your frustrations and know how to get make this process easy for you, even with all this paper!!!  Call us at 403-347-0774, we have a combined 35 years experience!!!

First Time Home Buyers, Second Home Purchases, Acreage Financing, New Construction Mortgages, Cashback Mortgages, Credit Advice, best mortgage rates, loans


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Why Do Lenders Require You Have A Credit Rating

March 4, 2018
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As a Mortgage Broker for many, many years this is a question I get a lot.  In an environment that consistently reports we as Canadians are way too far in debt compared to the income we make this question has it’s justification for sure.  And the main reason is that lenders require we have debt to get debt, makes no sense right?  I do agree to a degree so let me try to explain.

The general rule of thumb is lenders want to see you have a minimum of two creditor debts over a two year time frame.  Add to that they want your credit card to have a limit that is not too low, let’s say in the $1,000 minimum range.  Your credit rating, better known as Beacon Score, is directly related to how long you have had debt, how you pay that debt off monthly with no lates showing, and having low balances compared to your limits.  New debt can lower your credit score as can balances on your cards too close to the limit.  So, use your cards however only to about 50%-60% of the limit at any time.  Seems counter productive doesn’t it, i do agree however that is the system we are in and if you want a mortgage you need to have debt, not too much mind you, but you need debt.  Mortgage debt is good debt, bad credit can hurt your chances of getting a mortgage, renewal, refinance, home equity lines of credit, loan.

Call Brenda and Jessica at Advance Mortgage for all your mortgage, loans , purchases at 403-347-0774

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Mortgage Rule Changes

February 18, 2018
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Mortgage rule changes and increasing interest rates—surprisingly—weren’t the top motivators for prospective homebuyers in 2017, according to a new survey from the Canada Mortgage and Housing Corporation (CMHC).

Instead, the 2018 Prospective Home Buyers Survey found that improved accessibility (i.e., fewer physical obstacles and barriers) and investment opportunity were the main driving factors to purchase a home.

The results were divided into three segments of buyers: first-time buyers, previous owners (who had previously owned a home but do not currently) and current owners.

For first-time buyers and previous owners, the desire to stop renting was ranked as one of the top three motivators to buy a home by 65% and 60%, respectively.

CMHC survey

“The majority of prospective home buyers from all groups agree that home ownership is a good long-term financial investment,” the survey noted.

This is the first time CMHC has conducted this specific study, which examined attitudes and expectations of prospective Canadian homebuyers, as well as their understanding of the homebuying process.

There was also some positive news for brokers, as the survey confirmed that a majority of buyers from all three groups—including a full 80% of first-time buyers—planned to consult a mortgage broker before making their home purchase.

Here are some of those findings (with key stats in blue):

Mortgage Rule Changes, Home Prices & Rising Interest Rates

36% of first-time buyers were aware of the 2016 mortgage qualification rule changes (e.g., the 10% down payment required for the home price portion above $500,000 and the requirement for all insured mortgages to be stress-tested using the 5-year posted rate).
53% of previous owners and 58% of current owners were aware.
(Ed. note: On average, a minority of prospective homebuyers were aware of key mortgage rule changes. This helps make the case for the value a mortgage broker can bring in terms of increasing buyer awareness and helping them navigate sometimes complicated and unknown mortgage regulations.)

20% of first-time buyers not previously aware of the rule changes said it will impact their purchase decision in some way.
Vs. 18% of previous owners and 14% of current owners.
50% of first-time buyers said the changes would cause them to delay their home purchase, while 23% would purchase a smaller home.
51% of previous owners and 65% of current owners would delay their purchase
35% of previous owners and 32% of current owners would purchase a smaller home
76% of first-time buyers said they are likely to delay their home purchase due to high home prices, followed by 73% of previous owners and 63% of current owners.
70% of first-time homebuyers said they are concerned about the possibility of interest rates increasing before they buy their home, followed by 62% of previous owners and 61% of current owners.
61% of first-time buyers would, as a result, likely delay their home purchase, followed by 61% of previous owners and 50% of current owners.

Homebuying Expectations

69% of first-time buyers agree that they have a good understanding of how much mortgage they can afford.
Vs. 79% of previous owners and 83% of current owners.
54% of first-time buyers and previous owners are planning to spend under $300,000 on their next home.
Vs. 33% of current owners.
25% of first-time buyers and previous owners are planning to spend between $300,000 and $500,000 on their next home.
34% of current owners are planning to spend over $500,000 on their next home.
68% of first-time homebuyers feel confident they can find a suitable home within their budget.
Vs. 83% of current owners.
In a scenario where buyers would not be able to find their ideal home:

43% of first-time buyers would delay their purchase.
Vs. 45% of previous owners and 28% of current owners.
42% of first-time buyers would compromise on the size of the home.
Vs. 39% of previous owners and 42% of current owners.
38% of first-time buyers would compromise on the location of the home.
Vs. 39% of previous owners and 38% of current owners.

Buying Preparedness

80% of first-time homebuyers plan to consult with a mortgage broker before purchasing a home.
Vs. 72% of previous owners and 69% of current owners.
16% of first-time buyers pre-qualify for a mortgage within three months of purchasing their home.
Vs. 21% of previous owners and 22% of current owners.
33% of all buyers prepare a detailed budget on their own within six months to a year before purchasing their home.

Financing home

66% of first-time buyers say they have a good understanding of the full cost of homeownership, including mortgage payments, property taxes, condo fees, utilities, maintenance, etc.).
Vs. 79% of previous owners and 85% of current owners.
33% of all homebuyers say they will take additional steps to pay down their mortgage as soon as possible.
40% of first-time buyers and previous owners say they are unlikely to have a financial buffer in case their expenses change in the future.
40% of first-time buyers say they are confident they have the necessary tools and information to manage their mortgage and debt load.
Vs. 40% of previous owners and 50% of current owners.
(Ed. note: These numbers are surprisingly low, particularly for previous and current owners, and again illustrates the opportunity for mortgage brokers to play a role in educating homebuyers to prepare them for financially responsible home ownership)

Homebuyers and Technology

68% of first-time homebuyers would prefer to complete the entire homebuying process with help from a professional and be using online tools and resources:
Vs. 60% of previous owners and 58% of current owners.
7% of first-time buyers would prefer to use online tools and resources exclusively, without the help of a professional:
Vs. 4% of previous owners and 5% of current owners.


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Mortgage Update for 2018

February 18, 2018
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Well, we have gotten through 2017 without any major issues and in fact in good shape overall.  Alberta has had a few tough years and has a bit to go yet before we all feel confident we have truly weathered the storm.

The positive is the interest rates are still very low as well as house prices in many areas especially in Red Deer and surrounding areas.  Even though clients now have to qualify at the BenchMark rate as determined by the Bank of Canada, that qualifying rate is set at 2% above the contract rate  a client will receive from the lender who approves their mortgage.  The results, in some cases, can mean that the amount approved for and therefore the maximum purchase price can be affected and possibly be lower.  That does not always happen, we at Advance Mortgage can assist you with that to get thee home you love.


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A few reasons you should get in touch for your financing needs!

November 6, 2017
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We want to share with our borrowers some of the things that set us apart in the mortgage broker world. During the home buying process you want to make sure you are dealing with the right professionals for your needs. Here are some of the things you get when dealing with us.

1) Years of experience: Brenda has over 25 years of experience in the industry and Jessica has worked in the finance industry for 10. We bring different past experiences to the table which helps us provide our clients with the best service for all situations.

2) We have 60 5 star reviews currently on Google. Currently this is more than any other listing in our industry. We are listed as one of the 3 best in the area on threebestrated.ca. We strive to have positive relationships with all of our borrowers and we always work our hardest no matter the size of the mortgage or the circumstances of the borrower.

3) The way our office runs we can meet the scheduling needs of most our clients. We have someone available weekdays, evenings and weekends. We understand not everyone can make appointments during the regular business hours and not everyone can come into our office for a meeting. We are flexible with our clients schedule and needs.

These are just 3 of the reasons Advance mortgage might be the right mortgage brokerage for you. Consult with us on your next purchase, refinance or renewal. We care deeply for our clients and we want to help you reach your home ownership goals!



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New Changes Coming Soon

October 30, 2017
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This past week we received word that the government will be rolling out the next phase of “stress test”. These changes to the qualification requirements are designed to make sure all borrowers are well qualified for the mortgages they are getting. This will have impact of varying degrees to borrowers.

As of today the current stress test only affects borrowers obtaining an insured mortgage. Generally that includes borrowers with less than 20% available for down payment. Presently these borrowers have to qualify at a payment based on the qualifying rate which is 4.89% at this time. As of January 1, 2018 the latest addition to the stress test will be broadened to include conventional borrowers, those with 20% down payment or more. When this change takes affect these borrowers will have to qualify at the qualifying rate(4.89%) or 2% above the rate they are contracted at whichever is greater. This could mean conventional borrowers will need to qualify at rates upwards of 5%.

For those conventional borrowers with current pre-approvals this could reduce the amount they previously qualified for should they not purchase until January. Whether we feel this is a good program or not it is happening in January and we will find a way to work with these changes to the benefit of our clients. It is our goal to find our borrowers a way to get the mortgage that is the right fit and has the least costs. We have our borrowers best interests at heart.

If you would like to learn more about these changes and how they affect you personally or want to find out some possible solutions please give our office a call at 403-347-0774.

Jessica Bartolf & Brenda Mackay
Mortgage Alliance Advance Mortgage



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Glossary of Mortgage Terms

May 13, 2017
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When getting a new Mortgage a lot of information is being passed to you. We have compiled a list of Mortgage terminology that may help you better understand what you are signing up for!

Agreement of Purchase and Sale – A legal agreement that offers a certain price for a home. The offer may be firm (no conditions attached), or conditional (certain conditions must be fulfilled before the deal can be closed).

Amortization Period – The time over which all regular payments would pay off the mortgage.

Appraisal – The process of determining the value of property, usually for lending purposes. This value may or may not be the same as the purchase price of the home.

Appraisal Value – An estimate of the market value of the property.

Borrower: An individual who requests a loan from a bank.

Canada Mortgage and Housing Corporation (CMHC) – The National Housing Act (NHA) authorized Canada Mortgage and Housing Corporation (CMHC) to operate a Mortgage Insurance Fund which protects NHA Approved Lenders from losses resulting from borrower default.

Certificate of Title – A document setting out instruments registered against the title to the property.

Closed Mortgage: A mortgage that cannot be prepaid or renegotiated before the term’s end, unless the lender agrees and/or the borrower is willing to pay an interest penalty.

Closing Costs: Fees associated with the purchase of a home, in addition to the purchase price of the home. Closing costs – such as legal fees, transfer fees, and disbursements – are payable on the closing day of the mortgage.

Closing Date – The date on which the sale of a property becomes final and the new owner usually takes possession.

Conditional Offer – An offer to purchase subject to conditions. These conditions may relate to financing, or the sale of an existing home. Usually a time limit in which the specified conditions must be satisfied is stipulated.

Conventional Mortgage – A mortgage that does not exceed 80% of the purchase price of the home.

Counteroffer: When the seller has amended something on your original offer, such as the price or closing date. If a counteroffer is presented, you have a specified amount of time to accept or reject it.

Credit Report: The main report a lender (bank) uses to determine whether you can repay the loan. It includes information about your ability to handle your debt obligations and your current outstanding obligations.

Debt-Service Ratio – The percentage of the borrower’s gross income that will be used for monthly payments of principal, interest, taxes, heating costs and condominium fees.

Deed (Certificate of Ownership) – The document signed by the seller transferring ownership of the home to the purchaser. This document is then registered against the title to the property as evidence of the purchaser’s ownership of the property.

Default: Failure to fulfill the terms of a mortgage loan agreement. This could result in legal recourse taken against the borrower by the Lender

Deposit: Money placed in trust by the purchaser when an Offer to Purchase is made. The money is held by the real estate representative or your lawyer/notary, and is paid to the vendor when the sale is closed.

Depreciation: The decrease in value of something over time.

Down Payment: The portion of the home price that is not financed by the mortgage loan. Minimum of 5% of the purchase price. The buyer must pay the down payment from his/her own funds or other eligible sources before securing a mortgage

Equity – The difference between the market value of the property and any outstanding encumbrances.

Fire Insurance – Before a mortgage can be advanced, the purchaser must have arranged fire insurance. A certificate or binder from the insurance company may be required on closing.

Fixed-Rate Mortgage – A mortgage for which the rate of interest is fixed and will not fluctuate for a specific period of time (the term).

Foreclosure – A legal procedure whereby the lender eventually obtains ownership of the property after the borrower has defaulted on payments.

Gross Debt Service (GDS) Ratio – The percentage of gross income required to cover monthly payments associated with housing costs.

Gross Household Income: Gross household income is the total salary, wages, commissions and other assured income, before deductions, by all household members who are co-applicants for the mortgage.

High Ratio Mortgage – A mortgage that is greater than 80% of the property’s value. This mortgage will have to be insured by a mortgage insurer such as CMHC

Holdback – An amount of money required to be withheld by the lender during the construction or renovation of a house to ensure that construction is satisfactorily completed at every stage.

Inspection – The examination of the house by a building inspector selected by the purchaser. This is generally optional but definitely recommended

Interest Rate: The amount charged by a lender for borrowing money (annual percentage).

Interest Rate Differential Amount (IRD) – An IRD Amount is a prepayment charge that may apply if you pay off your mortgage principal prior to the maturity date or pay the mortgage principal down beyond the prepayment privilege amount. The IRD amount is equivalent to the difference between your annual interest rate and the posted interest rate on a mortgage that is closest to the remainder of the term less any rate discount you received, multiplied by the amount being prepaid, and multiplied by the time that is remaining on the term.

Interim Financing – Short-term financing to help a buyer bridge the gap between the closing date on the purchase of a new home and the closing date on the sale of the current home.

Lender: An organization that lends money to a borrower.

Lump Sum Prepayment: An extra payment made to reduce the balance of your mortgage, with or without penalty.

Maturity Date – The day the mortgage agreement comes to an end. Ideally you will want to visit your mortgage broker a few months in advance of this date to discuss any available options.

Mortgagee and Mortgagor – The lender is the mortgagee and the borrower is the mortgagor.

Mortgage Approval/Commitment Letter: A written notice from the mortgage lender (bank) to the borrower that approves a specific amount of mortgage funds.

Mortgage Life Insurance – A form of reducing term insurance available on mortgages.

Mortgage Loan Insurance: If you have a high-ratio mortgage (more than 80% of the lending value of the property) your lender will probably require that you purchase mortgage loan insurance, which is available from CMHC or a private company.

Mortgage Payment: A regularly scheduled payment that is often includes both principal and interest.

Mortgage Term – The number of years or months over which you pay a specified interest rate.

Open Mortgage – A mortgage which can be prepaid or paid in full at any time, without restriction or penalty.

Payment Frequency – The frequency at which the regular mortgage payments are made. They can be weekly, every other week, twice a month or monthly.

P.I.T. – Principal, interest and taxes.

Porting – An optional available on many closed term mortgages This allows you to move to another property without having to pay a penalty to do so.

Prepayment Charge – A fee to borrowers when the borrower prepays all or part of a closed mortgage more quickly than is allowable according to the terms of the mortgage agreement.

Prepayment Option – The ability to prepay all or a portion of the principal balance.

Principal – The amount of money borrowed for a new mortgage.

Refinancing – Renegotiating your existing mortgage agreement. May include increasing the principal or paying out the mortgage in full.

Renewal: At the end of a mortgage term, your mortgage may be renewed with new terms and conditions. You are not required to renew with the same lender and should visit your mortgage broker to ensure you are getting the best deal before renewing.

Security – In the case of mortgages, real estate offered as collateral for the loan.

Term: The length of time that mortgage conditions including interest rate are in effect.

Total Debt Service (TDS) Ratio – The percentage of gross income needed to cover monthly payments for housing and all other debts and financing obligations.

Variable Rate Mortgage – A mortgage for which the rate of interest may change if other market conditions change. This is sometimes referred to as a floating rate mortgage.

Vendor: The individual who is selling a property (also called the seller).



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Hospital Crafts for Kids: crafts for hospital patients

May 11, 2017
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Seeing a doctor could be a scary experience for small children, but hospital inspired crafts will make routine appointments less scary for your kids with stethoscope reviews. Inexpensive and simple routines can help inspire your children by educating them by what they could expect in their next check-up.

This craft really helps children to spot and realise the different characteristics of common medical tools and supplies. To help make the case, fold an item of black, brown or white building paper in half the quick way. Cutout handles that are proportionate to the paper bag and sometimes stick or tape them in position. Addition or recording the sides of the bag closed, but keep the most effective open so that your children may place things inside. Cut across from a piece of red construction paper and stick it towards the front of the bag.

Using a bright crayon or chalk, publish your child’s name with a “Dr.” facing it about the other part of the case. Allow your children to put bandages, cotton balls or swabs, tongue depressors or other small things you could find in a doctor’s office, inside the case. Before the play, talk with your children concerning the uses of the items to help familiarise them.

Laura Beth Drilling/Demand Media

Family Mortgage Broker Red Deer

Make a physician’s headband so that your child appears the part. You need to use basic pieces of white computer document or construction paper to create a doctor scarf. Put a measuring tape or a simple little bit of line snugly around your child’s visit determine the duration you’ll require the paper strips to be. The size of the paper should be 2 or 3 inches.

Once you have your paper strip, reduce a group from a sheet of aluminium foil and recording or glue it to the heart of the document. The width of the group should be much more than the paper strip, therefore, it resembles an actual doctor’s mirror. Record or staple the ends of the paper strip together and put it on your own child’s head.
Laura Beth Drilling/Demand Media

This hobby describes the event of the stethoscope for your child. Cut out a cup from an empty carton of eggs and provides anyone to each child. Use tempera paint or guns to decorate the cups and permit them to dry before putting a hole in the bottom. Thread a piece of wool or string through the gap and link a knot so your glass hangs from the end.

Cut the middle out of a flexible paper plate so that you are left having a ring shape. Reduce one side of the band in order to open it and later stick it around your youngster’s neck. Stick a hole in the area of the ring reverse from your cut. Thread another unknotted end of the sequence from the egg cup through the gap inside the paper plate band and knot it so the pot hangs. Place the stethoscope around your youngster’s neck and permit him to test using it like an actual doctor would.

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