31 Aug

Details, Details, Details!

General

Posted by: Tracey Robinson

The Devil Is In Five of the Details

The Devil Is In Five of the Details

I have something shocking to tell you. Mortgage brokers are human. Gasp!! But wait, so are lawyers, lenders, legal assistants and everyone else who is involved with your mortgage transaction. Why do I choose to draw attention to this and ruin your day you ask? It is so you will have a checklist of the things to confirm after the mortgage transaction closes so you are not gobsmacked down the road by a nasty surprise.

1. Property taxes– Even if you are certain that you indicated your preference to the mortgage specialist and the lawyer and anyone else who would listen, you really should take a minute to confirm just who is paying them. If you have changed from the Tax Installment Payment Plan (TIPPS) to having the lender collect them on your behalf, then you may be facing a tax shortfall at the end of the year which will now require you to double on the tax portion of the payment to make up the difference.

2. Payment Frequency – There is a misconception that choosing the biweekly or weekly frequency will pay your mortgage down faster and this is very untrue. If your goal is to pay your mortgage down quickly, you must choose the accelerated option for either to get the benefit.

Let’s go over the numbers real quick. Based on a $300,000 mortgage with a 25 year am and a rate of 2.49%.

Monthly $1,342.41 – 25 years to repay

Biweekly $619.23 – 25 years

Biweekly accelerated $671.20 – 22.4 years

Weekly $309.54 – 25 years

Weekly accelerated $335.60 – 22.4 years

As you can see, the accelerated payments are higher, which means more money goes directly to the balance of the mortgage. The benefit of the weekly or biweekly non-accelerated is mainly that it would line up with your pay schedule for the payments.

3. Mailing Address – If you live in one of the smaller areas and your mailing address is different than your home address, you should make sure your lender knows so you will receive your annual statement and other communication.

4. Phone number – Again, make sure the lender has your new number if you have moved to a new community.

5. Online Mortgage Systems – Most lenders now have an online system where you can opt to make extra payments or just check your balance. Something kind of nice about managing your mortgage on a Saturday in your pj’s while sipping your coffee.

All of the above can be handled in one phone call. That’s right – one! Call your lender a week or two after your mortgage closes to allow their system to register your new mortgage. Some lenders send a nice welcome letter after funding which will outline all of the above in which case all you have to do is take a minute to review. Of course, here at Dominion Lending Centres, we can help you with your mortgage, by getting organized for all these details surrounding your mortgage.

Give me a call, text or email today!

250-328-9096

traceyrobinson@dominionlending.ca

18 Aug

After the Fire – Initial Checklist

General

Posted by: Tracey Robinson

With all the horrible fires that have taken place in the Okanagan this year I thought maybe this checklist could be helpful. You can be very overwhelmed after you have a disaster, such as flood damage or fire damage, to your property. There are so many things to take care of, all the while being without the normal comforts of your dwelling space. Here is a checklist to help guide you through the restoration and recovery process

After the Fire – Initial Checklist

(Adapted from Surviving Wildfire: Get Prepared, Stay Alive, Rebuild Your Life by Linda Masterson)

Your Shopping List
ï‚· Binder or notebook
ï‚· File folders
ï‚· Pens
ï‚· Post it Notes
ï‚· Clothes
ï‚· Medications
ï‚· Toiletries
ï‚· Laptop or tablet if yours was lost
ï‚· Pet supplies
ï‚· SAVE ALL RECIEPTS.

Make A Fire Information Sheet
ï‚· Name of the fire
ï‚· Incident number
ï‚· Date of evacuation
ï‚· Date of loss

Call Now
ï‚· Insurance Company – start the process, write down your claims number and who you talk to.
ï‚· Mortgage Company – talk to the loss mitigation department. Ask about their policies regarding loss and your obligations to them.
ï‚· Credit Cards – give them your cell phone and new mailing address as soon as you have it. Get your credit limit increased if necessary.
ï‚· Work – you may need to take some time off to deal with the recovery process.
ï‚· Banks – update address or switch to online statements.
ï‚· Support System – don’t forget to take care of yourself. Find a friend or confidant.
ï‚· WRITE DOWN WHO YOU TALK TO AND WHAT THEY SAID. EVERY TIME.

Call Later
ï‚· Post Office – you can fill out a hold request online or consider a P.O. Box.
ï‚· Doctor or Pharmacy – replacement medications and/prescriptions
ï‚· Service providers (utility, phone, cable) – stop services and automatic billing. Ask about waiver of deposits for any equipment (dish etc).

ï‚· Cellphone – you may need to increase your data and/or minute allotment.
ï‚· Propane company – tank pick up and/or changes in delivery schedule.
ï‚· County assessor – ask for reassessment.
ï‚· WRITE DOWN WHO YOU TALK TO AND WHAT THEY SAID. EVERY TIME.

Start the Home Inventory Process
ï‚· Work with your insurance agent to determine what information they are going to need.
ï‚· Keep records of everything you buy
ï‚· Gather documentation – ask friends and relatives for photos of your house. Organize them by room.
ï‚· Work room by room.
ï‚· Write down each item, item age, how acquired, replacement cost or value when purchased (talk with your insurance company to determine what they need first).
ï‚· If the insurance company does not provide forms, you can use your own or a template. State Farm has a great template here: https://static1.st8fm.com/en_US/content_pages/1/pdf/home_inventory_checklist.pdf
ï‚· BEFORE YOU GO TOO FAR, SHOW YOUR INSURANCE ADJUSTOR A SAMPLE PAGE to make sure the format works and that you are collecting all of the information.

Remember to take care of yourself as well during this process.

 

17 Aug

Who does your banker work for??

General

Posted by: Tracey Robinson

Who does your banker work for?

The Banker

It may seem an odd question with a very obvious answer but you would be surprised how few people consider this question when approaching their bank for mortgage advice. When you deal with a bank employee or a mobile mortgage representative (also a bank employee), you need to know that their primary responsibility is to look out for the bank’s best interest. Banks are morally and legally obligated to provide the best return for their shareholders. This can present an issue, especially if you are seeking “unbiased” mortgage advice. As one of our clients recently found out, dealing with a bank isn’t all that it is cracked up to be.

In 2009, when the clients approached their bank’s “Mortgage Specialist” to explore their refinancing option, the Specialist had them approved for what they considered to be a good rate with good terms. The clients happily signed their mortgage documents and went on their way happy with their new terms. If that was the end of the story I wouldn’t be writing this blog, however, that was not the case.

This year the clients decided to sell their home and move up to a larger house that could accommodate their growing family. After consulting a realtor, they phoned their bank to find out what options were available to them. The rate and terms offered by the bank were not competitive with current market offerings so the clients asked what the cost to buy out their mortgage would be. After using the bank’s online calculator, they figured their prepayment penalty would be in the $5300 range. Needless to say, the clients were completely floored when the bank representative told them their penalty would be in the neighbourhood of $22,000.

After several moments of shock, the clients asked the representative how this could be. The answer they received was that their “Specialist” had provided them with a “Discounted” rate on their last refinance and because of that they were penalized an additional 1.85% in their penalty calculation which accounted for the additional $16,000+. In the end, the additional penalty did not leave the client with enough equity in their home to sell and purchase a new property.

So that “great rate” that the clients received from their “Specialist” resulted in a considerable amount of hardship down the road. So the next time you go to your bank for mortgage advice, it would be prudent to consider who your banker works for…and then come to Dominion Lending Centres!

11 Aug

Doing a Purchase/Refinance + Improvements

General

Posted by: Tracey Robinson

Considering a Purchase/Refinance + Improvements

 One really exciting development in the mortgage industry has been the ability to receive financing for a purchase/refinance + improvements. Finding the home of your dreams can be a daunting task. No two people have the same taste, maybe you hate the color of the walls, want carpet in the bedrooms, or maybe the windows need replacing all together. 

Typically this program will allow you up to 10% of the total mortgage amount as additional monies for improvements. Rather then struggling to save up for these items in the future or add them to your credit card balance, this may be the answer you’ve been waiting for!

 This program is wonderful for:

– Instantly increasing the value of your property

– Creating your dream home fast without waiting for equity to build up

– No need to save up money to do the upgrades you want/need

– Use for immediate maintenance (leaking roof, new hot water tank, furnace etc)

*The difference some new floors and paint can make.

 How it works:

– Once you’ve found a property (if it’s a new purchase) contact me and we can get started on the approval process and go over how much you can afford to add for improvements. 

– Go out and get quotes for all the work you want/need to get done. This can be from different contractors or hardware stores (if you’ll be doing some work yourself). If going to places like Rona or Home Depot they are very helpful and will help you find, list and itemize everything you will need. 

*Only items that will help to increase the value of your property are included. Things like lighting, hot tubs, self labour and appliances are not included.

– Keep all receipts for all renovation and bring to me, in which I will submit to the lender. They will then arrange for an appraisal to be done to confirm all stated renovations have been 100% completed as per original quotes

– Once the appraisal report is complete and approved by the lender the lender will instruct lawyers to release your funds to you!

I know that this can sound somewhat daunting, but many clients have successfully completed this, including my own assistant, and I promise to help you through every step of the way!!

 

Lets start building your dream home today!

 

11 Aug

A Pre-Approval is NOT really a Pre-Approval

General

Posted by: Tracey Robinson

A Pre-Approval Is Not Really a Pre-Approval

A pre-approval is not really a pre-approval

There is a misconception out there that once you’re pre-approved, you’re good to go. A pre-approval simply means that based on your CURRENT income, expenses, down payment and credit you SHOULD be able to get fully approved once you find the right property (this is the first half of the equation). Many places won’t even pull a credit check (which is extremely important) and will just run a basic mortgage calculator and say “everything looks good” but that doesn’t mean anything. You leave thinking great, I’m pre-approved!

I always recommend that people put in a “subject to financing” clause with their realtor when they are putting in an offer to protect them each and every time. Here’s why:

You could be pre-approved but the lender still doesn’t know which property you’re purchasing (that’s the other half of the equation). Let’s say you find the house of your dreams (well within the maximum price that the mortgage broker went over with you) but we find out that the house was a former grow op. In this case, very few lenders will even look at this (even if it’s been fully remediated and there’s a stamp from the city saying it’s all good) and if they do, they’ll usually require a substantial down payment and further air quality testing that you must pay for as mould spores can grow behind walls and become airborne years later. Yes this is an extraordinary example but it can also happen where a bidding war has bid up the price and the best offer (yours) has been accepted. The lender sends in their appraiser to determine the value of the property and it may come in at a lower value than your accepted offer and so you’d have to come up with more money for a down payment (which you weren’t prepared for or don’t have).

If you have a “subject to financing” clause in your agreement, then you have a way out and can look for another property with no issue at all. If you don’t have a “subject to financing” clause at all and you’ve already given your deposit to the realtor (because you were under the impression that you were going to be approved), then you’re out of luck and will be stressed out and scrambling to find a lender that will help you out, even though you were technically “pre-approved”.

So in summary, always put in a “subject to financing clause” as that’s the only protection you have. This is much cheaper than forfeiting your deposit (and facing potential legal action from the seller) should you want to cancel your contract after the agreement has been made.

Better yet, contact your local Dominion Lending Centres Mortgage Professional and have them do a proper pre-approval and have you fully prepared for what most likely will be the largest purchase in your life!

 

Contact me today! 250-328-9096

traceyrobinson@dominionlending.ca