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Who Is A First Time Homebuyer!!!

April 27, 2018
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This is a question I get all the time so thought it a good idea to explain.  The term “First Time HomeBuyer” actually does not exist anymore in purchasing a property.  It used to be a few years back that in order to go as low as 5% down payment on a home you could not have owned a property for the past 5 years and the property you are buying had to be your principal residence.  That is no longer the case.

The new rules are only that you must be going to live in the property as your home.  You can own as many other properties as you like however as long as you are going to live in the property you are getting the mortgage on you can go as low as 5% down payment.  There may be some exceptions to that due to the type of property you are buying so the best advice a can give is check with us at Advance Mortgage ahead of time and we can advise.  It is always best to work with an experienced and qualified Mortgage Broker,  Brenda and Jessica are for sure that and then some.

Questions it would be a good idea to ask yourself when looking to buy are:

Which Mortgage Broker to Use – answer is Advance Mortgage

When do I need a Mortgage Broker – answer is “Always”

Who is the Best Mortgage Brokers – Advance Mortgage is as we have over 30 years experience  403-347-0774

Why Do I use a Mortgage Broker – best rates, no cost to you, shop the banks and trust companies for you, experts in our industry, and so very much more!!!

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Porting A Mortgage – Is It A Good Idea

April 8, 2018
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There are so many terms that you hear in the mortgage process and some of those are not ones that necessarily come up when you sign your mortgage commitment or even when you sign legal documents.

At Advance Mortgage however, we feel it is important for you to know what type of mortgage you are getting and what it allows for throughout the length  of your mortgage term.

A port in simple terms means taking the mortgage from one security to another.  This is very important because if you are taking a fixed term mortgage product you are signing a contract that says you are locked into this mortgage for the duration of the term you sign for.  Most people do keep their homes for a 5 year term and that is also the length of term most people will choose as well.  However circumstances could change in that time being a move, need a larger home or in some cases a smaller one.  As there are payout penalties if you break your contract you need to have the ability to take that mortgage with you on to the property you are buying.  You, of course need to sell the one you are in, buy the new one and at that time the lender, in most cases but not all, allows for you to “port” the mortgage to the new property thus not breaking the contract.  You will keep all in place, save your interest rate and eliminate the penalty of paying out.

Just to know though, this is not always possible and does depend on what type of property you are buying, is it a sell and buy at the same time,etc.  This is where we at Advance Mortgage comes in to guide you though the process and advise if this is the best route to take or give you other options.  We also do discuss this with our clients at the beginning but do know there are so many things to remember at that time, you are so excited about the new home you just bought that it is best to call us at anytime to advise.

Top Red Deer Mortgage Brokers   Best Mortgage Rates  Where To Come To Get the Best Possible Mortgage Renewals  Refinances  Know Which Mortgage Product Is Best  Mortgage Advise

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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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