CENTUM Causeway Mortgages - Blog

Self-Employed Borrowers Could See Tougher Times Ahead

CENTUM Canada — Wed, 04 Apr 2012 13:44:11 GMT

Recent studies have shown that self employment is on the rise, making up approximately 15% of the workforce in Canada. However, the trend is making it more difficult for the self-employed and other unique prospective mortgage clients to get a mortgage.

Many major lenders have quietly eliminated their stated income programs or are tightening their lending review process for self-employed individuals. This move comes with the growing fear around household debt and CMHC’s recent announcement that they are reaching the $600-billion cap for mortgage insurance set by the Federal Government.

The stated income programs were originally introduced to deal with the unique situations that self-employed residents have with the large amount of write-off expenses they have. Since self-employed individuals are able to write-off many expenses such as car payments or housing payments, their claimed income does not really reflect their financial situation. Permanent residents with over 3 years of business operation and a good Canadian credit history were eligible for the stated income program. Based on this program, lenders ask borrowers to state their income instead of providing the traditional forms of proof of income, like pay stubs or income tax returns.

By not being able to verify the income claimed by a self-employed borrower, the fear of clients over-committing financially increases. With worries that our housing market will “burst” like it did in America has prompted banks to be more stringent with whom they give mortgages out to.

Mortgage regulations around stated incomes had already been tightened in 2010. Self-employed borrowers who received a mortgage through the program were expected to put 10% down instead of the minimum 5% for a conventional mortgage. Refinancing a mortgage through the program was limited to 85% loan-to-value ratio (LTV). LTV represents the amount of the mortgage loan compared to the value of the property.

Self-employed individuals should expect a more extensive mortgage review process and be prepared to show documented proof of their income.

If you’re self-employed and thinking of purchasing a home, come talk to one of our mortgage specialists to help you find the mortgage that’s right for you.

The CENTUM Network To Make Children’s Wishes Come True

CENTUM Canada — Fri, 09 Mar 2012 13:07:05 GMT

If you go on The Children’s Wish Foundation of Canada website, you’ll see a video about Darcy Lee. He’s a 6 year old with Idiopathic lymphedema(with pleural and pancardial infusions), an illness usually resulting from an impaired lymphatic system (part of the immune system that deals with infections). The illness causes swelling in the body, most commonly in the arms and legs. There currently isn’t a cure for this illness.

Darcy lives with his parents on the East Coast of Prince Edward Island, and has been amazingly brave through his fight to get better. Darcy’s big wish was to have his grandparents move to PEI from Edmonton because it’s important for him to have his family around. His case was referred to Children's Wish and his family received the call that Darcy's wish would be granted. Children's Wish was going to help Darcy’s grandparents move to PEI so they can all be together.

The Children’s Wish Foundation of Canada is the largest wish granting agency in Canada, making hundreds of wishes come true every year. Darcy’s wish is one of 18,000 wishes that Children’s Wish has granted to children diagnosed with a life-threatening illness. Once a child has been approved for a wish, the team at Children's Wish are committed to making that wish come true. They have never denied an eligible child a wish, despite some of the most complex wishes imaginable.

This is why we at CENTUM are so proud to announce that Children’s Wish has been chosen by our Network to be our national charity. It’s important for us to be able to contribute back to our communities as a national organization. We asked our Network members which charity they wanted to support and The Children’s Wish Foundation of Canada was overwhelmingly the number one choice.

We’re very excited to be contributing to such a worthy cause and to help make a difference to families who have been through so much.

Save on Interest Payments

CENTUM Canada — Thu, 12 Jan 2012 00:00:00 GMT

If you ever watch HGTV Canada, you’ve most likely seen shows like “Til Debt Do Us Part” or Slice channel’s “Princess” – shows that bring in a professional to help people come to their senses and manage their debt.

Everywhere you turn these days, you’ll hear people talking about debt. The economic crisis in the United States and Europe has shone a light on just how volatile markets can be if not managed properly. Now that it’s after the holiday, you’re probably feeling a little pinch in your wallet as well.

Not all news is doom and gloom though. A recent report by Equifax Canada says that Canadians are doing a lot better in paying off credit card debt. It shows that we are taking heed of all the warnings about rising Canadian debt.

That being said, we need to make more of an effort to curb our debt. It was mentioned on the radio that many Canadians have actually made debt reduction a New Year’s resolution. How many succeed remains to be seen, but there are options out there to help you manage your spending and debt. Most solutions will require you to cut back your lifestyle and stop spending so much money! The solution seems logical, but it’s not always attainable.

At CENTUM, we want to help our customers figure out a blue print to manage their finances and become debt free faster WITHOUT having to cut spending. We’ve created a partnership with the SMARTEquity™ Program to help you ultimately pay less interest on your mortgage and other debt.

The SMARTEquity Program provides both online software and personal consultation to create individualized scenarios based on personal financial parameters with built-in flexibility and variability. Through the service, you as a CENTUM client would be assigned a Certified SMARTEquity Coach to help plan out monthly payments and track your progress.

It’s a great tool for anyone who has a mortgage and is interested in reducing the amount of interest they pay in a lifetime.

Come talk to us to get more details on how you can use SMARTEquity to your advantage.

What Happened in 2011?

CENTUM Canada — Mon, 19 Dec 2011 13:48:06 GMT

It’s that time of year again. The market slows to a crawl as Canadians prepare for the holiday season, and we all stop to reflect on the year that has passed. What did 2011 mean to CENTUM and to the mortgage industry? When we think about it, one word comes to mind as the best description: Change.

The vast majority of Canadians have been sheltered from the economic turmoil seen around the world this year. There has been an ongoing debt crisis in Europe and the United States. There has been a significant shift to the political landscape in the east, most notably, the Middle East. Those feeling disenfranchised are now participating in the worldwide OCCUPY movement, which has been experienced in all major Canadian cities, and though most of them are now fading into memory, there is still a movement against the burgeoning separation between the rich and the poor.

This is even more evident with the release of a recent Statistics Canada report that states that Canadian Household debt has reached a record high. With ever increasing debt levels and continued instability, more and more Canadians are in jeopardy of overextending themselves. So far, the Bank of Canada has held interest rates at a historical low, but there is speculation that interest rates will rise in 2012.

Efforts have been made to rein in debt, starting with changes to the mortgage rules. In January of 2011, the Government of Canada announced adjustments to the rules for government-backed insured mortgages. The maximum amortization period was reduced to 30 years. The maximum amount Canadians can borrow in refinancing their mortgages was reduced to 85% of the value of their home. Lastly, government insurance backing was withdrawn on lines of credits secured by homes, like home equity lines of credits. There was fear that the adjustments would hurt the housing market in Canada, but as we’ve seen, it’s been fairly stable around the country.

So what’s in store for the industry in the future? Debt reduction will continue to be a big topic in 2012. Technology and social media will continue playing a big part in creating competition in the mortgage industry. Our clients have access to more information than ever before and CENTUM Mortgage Professionals will be here to help you make sense of it all. CENTUM will continue to be an industry leader in providing their Network with tools and programs that will help our clients manage debt levels and become mortgage-free faster.

We are here to look out for your best interest.