Your buyer cannot sell their existing home, now what?

This scenario is becoming common place. As a Buyer of a Seller, if you find yourself in this position talk to a #MortgageBroker, we have #MortgageSolutions that can help.   I am now being consulted by buyers who have purchased homes without any conditions and cannot sell their existing homes. This could be as a result of the recent government housing policy announcements, increased number of listings, uncertain lending conditions and fewer bidding wars. As such, you need to understand all the issues and consequences to provide timely advice and do what is necessary to protect your clients and your deals. Here are 5 things to understand: What if the buyer cannot close? If the buyer cannot close, they will likely forfeit their deposit and be subject to a lawsuit from the seller, for the difference in the sale price if the seller now sells the property for a lower price than the buyer agreed to pay. What are some options available to the buyer? One option is to approach the seller and request an extension of their own purchase agreement, so that they have more time to sell their existing home without panicking. Another option is to sell or assign their agreement to a third party buyer, to have another buyer take over their agreement, pay them back their deposit, and close directly with the seller. Do you need the seller permission to assign this agreement to another buyer? Under the terms of the OREA re-sale agreement, no permission is required. However, it is best to be up front and work with the seller for a number of reasons. The seller salesperson could have a list of buyers who have already seen the property who may be willing to take over this deal. In addition, any new buyer would want to see the home and since your client does not yet own it, they have no right to show the home. By obtaining the assistance of the seller, you can show the home and hopefully arrange for a new potential buyer to take over. Who will pay the real estate commission? The real estate commission will still have to be paid on both transactions. Therefore, the original buyer will likely have to sell for more than they paid, just to break even. In my experience, this should be made clear when trying to arrange this with the original seller, that the buyer will not be making any profit on this re-sale, and is just looking for someone to take over their purchase obligation. Who pays land transfer tax? Land Transfer tax will only be paid once in this scenario, by the new buyer who finally closes the transaction with the seller. In my experience, it is best to deal with all these issues early in the process, by being up-front and honest with your seller and finding a solution that works for everyone. By working together, you can likely reduce the potential losses on all sides and in most cases, complete the transaction to the satisfaction of everyone. By Mark Weisleder. Mark Weisleder is a Partner, author and speaker at the law firm Real Estate Lawyers.ca LLP.

Be Life Rich, Not House Poor!

Buying at the top end of your pre-approval price could be setting you up for many dull years to follow. BECAUSE YOUR HOME COST IS MORE THAN JUST A MORTGAGE PAYMENT! There are property taxes, maintenance, utilities and more due every month. If those add up to 35% of your total income, you’re on the right track. If not you might have to sacrifice in other categories such as vacation, debt repayment or savings. Take a look at the pie chart to see how you can be life rich instead of house poor! NEED HELP FITTING A HOME INTO YOUR BUDGET? CALL ME FOR HELP TODAY! Mortgage Architects Steven Porter       CRMS ABR SRES Broker Lic. No. M15001919 Mortgage Agent P 905-878-7213 C 905.875.2582 Brokerage #12728 14 Martin Street, Milton, ON, L9T 2P9 5675 Whittle Road, Mississauga, ON, L4Z 3P8 Privacy Policy

Debt Consolidation Mortgage

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 Broker Lic. No. M15001919 Mortgage Agent P 905-878-7213 C 905.875.2582 Brokerage #12728 14 Martin Street, Milton, ON, L9T 2P9
	5675 Whittle Road, Mississauga, ON, L4Z 3P8 Privacy Policy

Prepare for multi-point interest rate rise says Desjardins

Prepare for multi-point interest rate rise says Desjardins Mortgage borrowers should be prepared for a rise in interest rates which could mean a 2.5 per cent rise by 2021.

That’s one of the scenarios considered in a new report by economists at Desjardins which highlights that economic expansion and falling yields in the bond markets may require higher interest rates.

The report notes that the likelihood of a sharp rise in mortgage rates is low but advises borrowers to “make sure they can face an average increase of approximately 2 per cent in mortgage rates over the medium term, something that could happen if the economic expansion continue for longer.”

Desjardins also acknowledges an increase in discounted rates by mortgage lenders, which means that even with a projected increase in the posted rates, borrowers are unlikely to be paying the full percentage.

Rises in interest rates are also unlikely to happen rapidly as the Bank of Canada is mindfull of the high levels of household debt and the issues that would arise from suddenly adding upward pressure on rates.

The report forecasts that the first 0.25 per cent interest rate rise will be in April 2018 followed by another in October 2018 and a third in January 2019.

However, there remains a caveat that the forecasts are based on the current trajectory for the US and Canadian economies which may of course change. - by Steve Randall, May 2017

- Posted by Steven Porter, Mortgage Agent - Mortgage Architects
Steven can be reached through his website at www.1800Mortgages.ca

6 Easy Steps to Buy Your First Home

WANT TO KNOW MORE? CALL ME TODAY!

Mortgage Architects	Steven Porter CRMS ABR SRES Broker Lic. No. M15001919 Mortgage Agent P 905-878-7213 C 905.875.2582 Brokerage #12728 14 Martin Street, Milton, ON, L9T 2P9
	5675 Whittle Road, Mississauga, ON, L4Z 3P8 Privacy Policy

SHOULD YOU PAY DOWN THE MORTGAGE OR INVEST?

SHOULD YOU PAY DOWN THE MORTGAGE OR INVEST?

Source: www.baystreet.ca

One of the biggest debates in the personal finance community is whether someone should use their extra cash to pay down the mortgage or put that money to work in investments.

The mortgage paydown strategy is popular with risk-adverse folks. Investing is risky, while shoveling extra cash towards the mortgage offers a guaranteed return that’s usually better than GICs or high-interest savings accounts.

Paying off the mortgage early is also incredibly empowering, at least for some people. They yearn for debt freedom more than anything.

This will enable them to do things they’ve always dreamed of, like travel, take a lower paying job, or retire early.

The investing argument essentially comes down to one factor. Investments in the stock market grow much faster than mortgage interest. If stocks return 8% over time and a homeowner can reasonably expect to pay 3% annually over a 25-year mortgage, the investor would end up with more money.

It works out to taking a 3% loan to make 8%. The only problem is the 8% return won’t be consistent. It will vary from year to year.

Perhaps the best solution is a hybrid approach. Paying down the mortgage early is a worthy goal that can save thousands in interest over the life of the loan. But investing for the future is incredibly important too. A 50/50 split between the two goals is a worthy compromise.

Remember, neither of these choices are terrible. Both will ensure you become richer in the long run, which is the ultimate goal.

Posted by Steven Porter. Steven is a licensed Mortgage Agent with Mortgage Architects, Certified Reverse Mortgage Specialist (CRMS); Seniors Real Estate Specialist (SRES) and Accredited Buyer Representative (ABR) and retired, real estate broker with 30 years experience in residential real estate. Steven can be reached at 1-905-875-2582; steven.porter@mtgarc.ca or online at 1800Mortgages.ca