Kathryn Grant - Blog

Time to Renew?

CENTUM Canada — Fri, 18 May 2012 11:42:33 GMT

With a blink of an eye, five years is over and you're starting to get the notices reminding you that your mortgage is up for renewal. You may have conveniently gotten your renewal papers in the mail from your lender offering you a rate that's lower than what you were paying before (this is because current mortgage rates are at a historical low). It's easy to just sign on the dotted line and mail it back, but if you stop and think about it, by signing these papers, you're locking yourself into yet another long term contract.

If you've done this before, you're not alone. Research has shown that most consumers stay with the same lender when renewing a mortgage. Statistics also show that people who spend a bit of time shopping around during renewal time, tend to save more in the long run.

Do you have enough information to make an educated decision about your mortgage? What are some of the options you have?

In order to find the right mortgage product for you, you'll need to ask yourself what your long-term goals are. Is it to be mortgage free as soon as possible? Or do you need increased cash flow for upcoming expenses like starting a family or saving for a child's post-secondary fund?

Mortgage options can really provide the flexibility you need to meet your long-term goals. With a little knowledge and the help of a mortgage broker, you could end up saving a lot of money in the long-run.

Mortgage Transfer

This option is best for renewal time, especially if you have a high ratio mortgage (value of mortgage exceeds 80% of your home). A mortgage transfer allows you to move your existing mortgage to a new lender. There are minimal costs involved since lenders will primarily absorb the cost to process a mortgage transfer. You will still need to provide all of the documents required for a mortgage application and there may be an appraisal cost (depending on the loan to value - calculated based on the size of your mortgage divided by the assessed value of your home).

Mortgage Rate Increase and Blend

This option should be used with caution and is relevant if you have more than 3 years left on your mortgage term and you're worried that mortgage rates will go up soon. The concept of this option is to allow you to increase the amount of your mortgage. The increased amount will be at the current mortgage rate, which is then blended with your existing mortgage.

Mortgage Rate Blend and Extend

On top of the ability to increase your mortgage amount with the blend and increase option, some lenders allow you to extend your mortgage as well. For example, if you have three years left, you may have the option to extend your mortgage to a new 5 year term.

Again, this option should be used with caution.

With all these options and others, it's important to have a real understanding of what each entails. A mortgage specialist can really help you in understanding the options available and which ones could be helpful in achieving your financial goals.

Don't walk into a mortgage renewal blindly. Contact us today and we'll find you the mortgage product that's right for you.

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.

Budget Provides Boost for New Home Buyers

Kathryn Grant — Tue, 21 Feb 2012 21:21:14 GMT

Budget provides boost for new home buyers

The 2012 budget has good news for property virgins and the home-building industry, but was disappointing for those hoping to simply improve their living quarters.

First-time buyers of newly constructed B.C. homes will benefit from a temporary one-time refundable income tax credit based on income and the price of the home. The credit will be calculated as 5% of the purchase price of the home up to a maximum of $10,000 for newly built housing, when both the HST applies and the sale closes on or after Feb. 21, 2012.

“This is great for first-time homebuyers; they have a difficult time in this region getting on to that first step of the homeownership ladder because of price of homes,” said Peter Simpson of the Greater Vancouver Home Builders’ Association.

On Friday, the province already announced it was raising the housing rebate threshold to $850,000, meaning more than 90% of newly built homes will be eligible for a provincial HST rebate of up to $42,500.

The tax break will spur construction and creates jobs, which had idled with the news that that HST would be phased out in 2013, proponents said.

Every housing start generates almost three full-time jobs for one year, across the construction, manufacturing and raw materials industries, Simpson said.

“Not just the person hammering nails but also work in the manufacturing industries, the doors, flooring, kitchen cabinets and all other products and materials,” he said.

The new tax measures provide no breaks for homeowners hoping to renovate.

“It’s disappointing there was nothing to address the impact of the HST on home renovations,” said Simpson, explaining while waiting for the “HST to disappear,” people are circumventing all the rules and regulations and “getting somebody to do it for cash.”

“It’s a huge concern for us. The HST fueled an already-burgeoning cash economy. We’re still left with that challenge until April 1, 2013.

The only exception was for seniors or anyone sharing a home with a senior relative, who can get a home renovation tax credit of up to $1,000, designed to allow those aged 65 and over to remain in their own homes longer.