The solution to high interest credit payments

What Is a Debt Consolidation Mortgage? A debt consolidation mortgage is when you refinance your mortgage to incorporate all your high interest debts into one payment – your mortgage. Find an affordable home in need of TLC and transform it into that perfect home you always dreamed of; with new bathrooms, kitchen, and hardwood floors. Add the estimated costs of the renovation to your mortgage at the time of purchase to finance the entire renovation transformation without having to wait! Debt Consolidation Benefits • A much lower monthly interest rate that all your debts will now fall under • Lower monthly payments • The comfort and convenience of making only one monthly payment. • Improved credit score from making all your payments on time. Here’s an example showing the effect on your monthly payments:

Now all that’s left is to figure out precisely which solution is best for you, and wipe out all those high interest payments. You already have the mortgage, so if you also have some high interest debt you’d love to unload... Call me today!

Mortgage Architects	Steven Porter CRMS ABR SRES Agent Lic. No. M15001919 Mortgage Agent P 905-878-7213 C 905.875.2582 F 416-900-8227 Steven.Porter@mtgarc.ca Brokerage #10287 14 Martin Street, Milton, ON, L9T 2P9
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Purchase Plus Improvements Home Purchase Program

Ever watched HGTV's "Income Property", "Property Brothers" or "Love It or List It"? Wonder how these folks can afford to tackle some of these projects? Well I'm about to tell you the secret . . . the "Purchase Plus Improvements" or "Re-Finance Plus Improvements" mortgage financing solution.  


 The "Purchase Plus Improvements Program" can help qualified home buyers make their home just right for them, with tailored improvements, immediately after taking possession of their purchased property. All this can be done with one manageable mortgage and with only 5% down-payment. 

 

Here's how the "Purchase Plus Improvements" program works. First, the program is available for property purchases containing up to two dwelling units with only a minimum 5% down-payment and  up to four dwelling units, i.e. triplexes and fourplexes with a minimum 10% down-payment of the combined purchase price and improvement amount.

This program may be used for fixer-uppers requiring major repairs such as a new roof, driveway, septic or well. Or for improvements such as a new kitchen, bathrooms or basement apartment. The key is the improvement must add value to the property. An important point to also note is improvements exceeding either 20% of the homes purchase price or $40,000. require a full appraisal of the home.

Down-payments may come from personal savings, RRSP withdrawal, non-repayable gift, sweat-equity, existing home equity, proceeds from the sale of a property, Government Grants or a combination.

This program is "mortgage insured" and is offer by the three major mortgage insurers, CMHC, Genworth and Canada Guaranty. Therefore, like any home purchase with less than 20% down-payment, mortgage insurance premiums will apply and home buyers will need to meet the financing guidelines of these insurers as well as the lender.

With the "Purchase Plus Improvements" program, the mortgage loan is calculated on the property's "As Improved Value". Therefore, keep in mind the minimum down-payment required will be a percentage of the "As Improved Value" not the purchase price.

Planning and preparation are always important as improvement funds are NOT typically advanced until after the improvement is complete and inspected. Therefore the home buyer will need to arrange trade credit and/or have access to funds for deposits, draws, etc. Also, improvements usually require completion within 90 days of closing. So make sure you take this into consideration when booking a contractor and scheduling delivery of materials.

It's always prudent to obtain written estimates of the improvements and verify that they are eligible under the program prior to finalizing (removing the condition of financing approval) the purchase. Let your Realtor know you plan to use the
"Purchase Plus Improvements" program fro your purchae. They can help you and the Mortgage Agent with the arrangements.
The following is a simplified example of how the "Purchase Plus Improvements" program may work for an improvement of less than 10% of the purchase price of a home and a maximum of $40,000.

• An accepted Agreement of Purchase and Sale on a home for $400,000. The home buyer is providing a 5% down-payment.
• The improvement is a new kitchen. A written quote for $30,000. and specs is obtained between acceptance date of the offer and the deadline for the "Condition of Financing" Approval.
• The Appraiser is contacted by the Mortgage Agent prior to the financing condition's deadline. The home is appraised “As Is” for $405,000 ($5,000 more than the purchase price) and estimates the “as-improved” value, as per the quote for $440,000. The mortgage loan amount is always the lesser of appraised or the purchase price, so therefore maximum loan amount is $430,000. ($400,000. purchase price plus $30,000. for the improvement value)
• Considering a 5% down-payment (95% loan-to-value), the maximum mortgage loan will be $408,500. and the required down payment $21,500.
• At closing, the home buyer's lawyer pays the Seller the $400,000. original purchase price as follows: 95% of $400,000 ($380,000) authorized by the Lender plus $20,000 (5% of $400,000.) of the home buyers' down-payment. The home buyers' Lawyer retains, in trust $30,000., the balance of mortgage loan and down-payment funds.
• Once the home buyer takes possession of the property, work on the kitchen can commence. Once completed, regardless of whether the kitchen comes in over or under budget or even a if different contractor is used, as long as the work is completed to the original specifications as confirmed by the Appraiser, $30,000. is available for release by the lawyer. It is important to note that if the project comes in over budget, the home buyer will be responsible for the difference.

When saving and budgeting for a down-payment for a home purchase, keep in mind you'll need to budget an additional 1.5% to 2% of the purchase price for closing costs. i.e.: legal fees, adjustments, land transfer tax, property tax holdbacks, etc. Read my post:  "What you can expect for closing costs" for more information on this subject. 

Already own a home you need to fix up to keep or resell and don't have the cash or the equity in your home? The "ReFinance Plus Improvements" program may be your answer.

You don't have to settle. Own your "Dream Home" with the "Purchase Plus Improvements" or the "Refinance Plus Improvements" programs. Contact me before you start looking at homes or refinance.

Author, Steven Porter, Mortgage Agent - Mortgage Architects. www.StevenPorter.ca; steven.porter@mtgarc.ca; 1-905-875-2582

How to Calculate Your Credit Score for Free

In the last few years, your credit rating has become increasingly important. While it seems obvious that your credit report and credit score are used in making decisions about loans, there are other less obvious uses for your credit history. Others might use your credit information to make decisions about other financial services and products. Poor credit could lead to you paying hundreds, or even thousands, of dollars more over your lifetime.

Understanding your credit, and knowing your credit score, can help you learn more about what’s at stake, and help you improve your financial situation. However, it’s not always straightforward to get an idea of where you stand with your credit.

When it comes to checking your credit reports, it might be worth paying for your credit report to get your credit score. This is because, while you are entitled to a free credit report, you aren’t entitled to a free credit score. While your free credit report can give you an idea of what you look like financially, on paper, it’s not the same as seeing the credit score that lenders will use to determine whether or not they will approve your loan. Your credit score is a quick look for others; they make snap judgments about your level of financial responsibility using your credit score. It might not be fair, but it is the reality of our financial system right now.

However, it you aren’t planning to apply for credit anytime in the immediate future, you might not need your exact credit score to keep tabs on your general financial progress. If you’re not too worried about an exact number and would like to have a general idea of your credit score, there is a way to calculate this for free.

How to Calculate Your Free Credit Score

It’s actually fairly easy to see where you stand when it comes to your credit score. All you need to do is visit this credit score estimator and fill in the fields. Once you have done that, the calculator will tell you what range your score falls into. This can provide you with a starting point for improving your finances. If you are considered to have “Fair” credit, you can make it a goal to move up into the “Good” category. If you are in the “Good” category, knowing your estimated score can provide you with a starting point to take you into the “Excellent” category.

The score estimator works by asking you for information that indicates where you fall in terms of the factors that the official credit scoring algorithm works. Factors such as payment history, amount of debt you have, the types of accounts you have, how many credit inquiries are on your report, and the length of your credit history are weighted differently and used to come up with your credit score.

The calculator can’t be perfect, since the exact scoring algorithm is proprietary. But using the information that has been made public about the way some of the factors are weighted, it’s possible to come pretty close. In fact, I found this calculator to be quite accurate when I compared the results with my own credit information.

I have three different reports that I’ve paid for to get my credit score over the last five years. Two were from Equifax and one was from TransUnion. I answered the questions using the information in these reports and not only did the calculator get the range right, all three times the score on the reports came within 10 points of the middle of the calculated range for that report. That’s not bad at all!

While you may have all the needed information handy and could check your score at any time, I recommend ordering your free credit reports and using that information with the calculator. You can order your free credit report, use the exact information provided by the report to ensure maximum accuracy, and then write the score the estimator gives you on the report for your records.

If you plan to apply for credit, it’s best to pay for your “official” credit score. However, if you are just keeping tabs on your financial progress, Bankrate’s free credit score estimator is a great resource that you can use for your own information.

Written by: Tom Drake, Canadian Finance Blog

Posted by: Steven Porter, Mortgage Agent - Mortgage Architects

Buy A Home With Little Or No Money Down

Maybe you owned a home before and are presently renting; or you're a first time home buyer and need a way to break into the housing market but lack the required minimum down payment; or you you simply do not want to liquidate your financial assets to use as a down payment on a home. Well, regardless of your situation, if you want to get into or re-enter the housing market with a low amount, or even without a cash down payment at all, then this strategy may be just what you're looking for.

Now you can realize the dream of owning your own home with little or no down payment and closing costs.

That's right, zero cash down payment and closing costs. Here's what is required to qualify for the Zero Cash Down Payment Program.

1.  An excellent credit history. 
• No recent history of bad debts. no bankruptcies or consumer proposals.consistent and timely payment of liabilities
2. Limited liabilities.
• You will be required to disclose and will be evaluated on your current and future debt servicing ability. (ie. car loan/lease, credit cards, helocs,etc.)
3. Proof of two years of stable employment, ie. a letter of employment from your employer, CRA Notice of Assessments and three years financial statements for self-employed.
4. Properties under the program have to be average or above average properties. No less than average; fair condition or fixer-uppers
• Acceptable property types: detached or semi-detached home, freehold and condominium town homes
• Maximum 2 units
• Owner occupied only

It is important to note that not all properties qualify for the Zero Cash Down Payment Program. Ensure you get an accurate picture of what properties may or may not be included in this program, in your particular area, contact myself, Steven Porter, Mortgage Agent or your Realtor.

Benefits of the Zero Cash Down Payment Program

No Down Payment

Are you are renting? Why pay your landlord's mortgage? Why not reap the benefit of building your own equity? The general perception of many would-be home buyers and even some Realtors® is that a minimum down payment of 5% is required in order to purchase a home. This is not always true. Many home buyers feel they have to save for years to have enough money for a down payment so they can eventually enter the housing market. In the meantime, they are lining someone else's pockets paying rent went they could start building equity of their own.

Buy a Home Now!

With the Zero Cash Down Payment Program you don't have to wait to purchase a home. If the need for a cash down payment is keeping you from owning your own home, this program offers you an immediate way to get into the housing market.

Approved Lender Program

It is important to know that the Zero Cash Down Payment Program is an approved program through reputable lenders. Review this program with me or your Realtor®.

Note, certain terms and conditions may apply.

Steven Porter, Mortgage Agent - Mortgage Architects, www.StevenPorter.ca

What you can expect for closing costs in a typical, residential real estate purchase.

It is important to be aware of all the costs involved in buying a home. It is prudent for a home buyer to know these costs before you go house hunting. Knowing what additional “closing costs” are, over and above the down payment will help you plan for a smooth purchase and help you avoid unpleasant surprises. Most lenders recommend you should allow at least 1.5%  to 2% of the purchase to be on the safe side.
 
The list below is a good guideline of closings costs that you might incur but always verify these for your particular situation.

Legal Fee and Disbursements

A lawyer will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, and conducting the various searches. The disbursements, on the other hand, are out-of-pocket expenses incurred, such as registrations, searches, supplies, etc., plus H.S.T. The actual fee that the lawyer will charge will depend entirely upon the deal between you and your lawyer. Be sure to ascertain exactly what this will amount to in a worst-case situation. Typical legal fees for a purchase with a mortgage  range between $1,000 to $1,500 including disbursements. We recommend you call one or two lawyers and obtain a quote directly from them including both their fee and estimates of disbursements.

Ontario Land Transfer Tax (LTT)

The Province of Ontario levees land transfer tax that is charged on closing when the property is transferred to your name. The amount varies on the price of the home, whether or not you are a first time home buyer and which city you live in Ontario, Canada.

Mortgage Insurance

Budget for insurance on your new home. Insurance costs may include Mortgage Default insurance, homeowners insurance, mortgage life and disability insurance and title insurance.

Property Tax and Prepaid Utilities Adjustments

At the time of a sale, the lawyer for the buyer will confirm that property taxes are paid up to date. If they are, a Tax Certificate is issued, from which any adjustments are made - usually requiring the buyer to compensate the seller for any prepaid taxes. If they are not up to date, the municipality requires that the seller pay them off from the proceeds of the sale. If the current owner has prepaid property taxes or other utilities for the year, they will be credited the prepaid portion on closing by the purchaser. Your lawyer will confirm this for you.

Property Appraisal

If your lender requires an appraisal report to be completed, it will be done before advancing any mortgage funds. Lenders want to be assured that the property is worth what you are either paying for it, or valuing it for. The cost for an appraisal normally ranges between $250 and $450 depending upon the property, location and type of appraisal.

Home Inspection

A home inspection report is commissioned by the purchaser to evaluate the physical condition of a property and it's mechanical components prior to the "firming up" of a Real Estate transaction. The scope and detail may vary, but most reports indicate specific issues and cost to repair. Depending on the size and location of the property, a home inspection is around $500.

Interest Adjustment (IA)

Depending on what day of the month you arrange to make your mortgage payments and when your transaction closes, your lender may charge you interest on closing up to the first payment date. This is called the Interest Adjustment Date (IAD). Your mortgage agent will calculate this for you. Remember, that all mortgages are paid in arrears so if your possession date is June 1st, and you choose to pay monthly, then your first payment will be July 1st.

Always consult a professional in your initial planning and before committing yourself to one of the largest purchase transactions you'll make. I'm always available to answer your questions. - Steven Porter, Mortgage Agent - Mortgage Architects steven.poretr@mtgarc.ca or 1-905-875-2582