Title Insurance

Lender title insurance is a one-time premium required to insure your mortgage and cover any risks to title. It is typically covered for the amount of your mortgage and will be available until your mortgage is fully discharged. Should any challenges arise in relation to title, your mortgage will be fully insured and covered for protection, giving you and your lender added security and peace of mind.

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
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Double first-time homebuyer tax rebate and other homebuyer incentives

In an effort to help first-time homebuyers—but not hurt the equilibrium of housing markets outside of Toronto—the Ontario Liberal government announced that they’ll double the first-time homebuyers’ maximum Land Transfer Tax refund to $4,000. 

This increased rebate will take effect January 1, 2017 and will mean that eligible homebuyers in Ontario would pay no Land Transfer Tax (LTT) on the first $368,000 of their home’s purchase price.

With the doubled refund, more than half of first-time homebuyers in Ontario would pay no LTT on the purchase of their first home.

Former Ontario Land Transfer Tax Rates:

Home Purchase Price             Tax Rate
Up to $55,000                              0.5%
$55,000 to $250,000                    1.0%
$250,000 to $400,000                  1.5%
Above $400,000                           2.0%

When the price brackets were first created, a $400,000 was considered the starting point for a luxury property. These days, however, a $400,000 home is no longer considered the benchmark for a luxury property in most parts of Ontario.

Under the new “modernized” land transfer rates, buyers of detached or semi-detached homes or condos or townhomes should expect to pay the following:

“Modernized” Ontario Land Transfer Tax Rates

Home Purchase Price             Tax Rate
Up to $55,000                              0.5%
$55,000 to $250,000                    1.0%
$250,000 to $400,000                  1.5%
$400,000 to $2-million                 2.0%
$2-million and over                     2.5%

Keep in mind, however, that buyers of multi-residential buildings (such as triplexes), commercial, industrial or agricultural properties will be required to pay 2% tax rate on any purchase price over $400,000.

Help for renters, too
To help the tight rental market, the Ontario government also announced that it will be freezing the property tax on apartment buildings. While this freeze is in place, government officials will be reviewing how the high property tax burden on these buildings affects rental market affordability.

Current programs to help first-time homebuyers
There are already a few programs in place to help first-time home buyers. These include:

Home Buyer’s Plan
First-time homebuyers have an opportunity to use their RRSP contribution towards a down payment, using the Home Buyer’s Plan (HBP). Under the federal HBP, you can withdraw up to $25,000 from any RRSP account, as long as those savings were deposited more than 90 days before your request to withdraw. Keep in mind, you have to pay back this interest-free loan over a 15-year period and any year you don’t make a payment, that annual sum is added to your income and taxed at your marginal rate. The good news is that couples can withdraw a total of $50,000 combined from their RRSP accounts, which can make a huge contribution towards a down payment. To qualify for the HBP you and your spouse must not have lived in a home owned by either person for the five years prior to using the HBP.

First-Time Homebuyer’s Tax Credit
Homebuyers who have not owned a home within the last four years may be eligible for the first-time homebuyer’s tax credit (HBTC) through the Government of Canada’s Economic Action plan. The credit is based on $5,000 multiplied by the lowest federal income tax rate for that year. For example, the lowest federal income tax rate for 2014 is 15%, so the value of the credit would be $750. You can learn more about the first time homebuyer’s tax credit on the Economic Action Plan website.

Land Transfer Tax (LTT) Refund
As a first-time homebuyer, you can receive a refund from the Ontario government of up to $4,000 of the land transfer tax you paid on your first home, effective January 1, 2017. Previously, the amount was $2000. 
To qualify for this refund, you must be 18 or older, you cannot have previously owned a home or an interest in a home, anywhere in the world. Typically, your lawyer will apply for the fee as you finalize your real estate purchase, but if that doesn’t happen you have 18 months after the registration date of the sale.

GST/HST New Housing Rebate
First-time homebuyers residing in provinces that have combined provincial and federal sales tax, which includes Nova Scotia, New Brunswick, Newfoundland, Ontario, and B.C., are eligible for an HST tax rebate through the federal government.

While rebates and conditions vary from province to province, the program is designed to help with the federal portion of the HST new homebuyers have to pay. You can find out if you’re eligible for an HST New Housing Rebate, as well as all necessary application forms on Service Canada’s website.

Energy Efficient Housing
Finally there’s the Energy Efficient Housing rebates. While not restricted to first-time homebuyers, these rebates can certainly help first-time buyers.

There are a variety of rebates both at the federal and provincial levels. For instance, Genworth offers the Energy-Efficient Housing program. Available across Canada, this rebate provides a partial refund of up to 25% of the Genworth Canada insurance premium, based on the date of application for the mortgage insurance. If you bought a $300,000 home with only 5% down, you would have to pay $10,800 in insurance premiums. Under the Energy-Efficient refund program, you could save $1,620 off those premium rates. For eligibility requirements, see Genworth’s website. The Canada Housing and Mortgage Corporation offers a similar rebate and can apply to a purchase or a renovation.

Source, Moneysense

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

Avoid These 11 Deadly Mistakes When Applying for a Mortgage

Everyday people have their mortgage loan turned down because of one or more of these mistakes.  By taking these few minutes to acquaint yourself with the "11 Deadly Mistakes When Applying For A Mortgage" you can save thousands of dollars on your mortgage.

 

1. Not Knowing How Much Money You Can Put Down 

It's important to know how much you can afford to pay in down payment and closing costs when you apply for your mortgage.  The more you put down the better the terms you're likely to get. At the same time you also need to stay within your means and comfort level.

2. Working With A Mortgage Broker Who Has A Poor Performance Record

Industry insiders know that the most common reason that a sale fails to go through is that the mortgage fails to go through.  Ask your mortgage broker about her/his performance record.

3. Not Understanding The Process

Most of us don't shop for a mortgage very often.  As a result it isn't something we become familiar with.  Work with a mortgage broker who will take the time to answer your questions and uses terms you understand.

 

4. Working With A Lender Who has Only One Mortgage Loan Product

Not all lenders have a range of options when it comes to mortgage loan products.  What if that lender doesn't offer the type of mortgage you need? Or worse yet, what if you need to change mortgage loan products after you've started the process?  Working with a mortgage broker who has many lenders enables you to address these issues without starting the process over again.

5. Making Large Purchases Prior to Your Mortgage Application

Many people think that it is in their best interest to get large purchases completed prior to applying for their mortgage.  As total debt is a key component in determining the amount of home you qualify for it is best to wait until after your home purchase has closed to make such purchases.

6. Over Shopping Your Loan

Each time you call a lender seeking the best possible rate and terms you have your credit report pulled.  Every time your credit report is pulled you risk decreasing your credit score and thus possibly decreasing the likelihood of getting the best rate and terms.  Experts recommend that you select a mortgage broker with a number of lenders and do your shopping with her/him.

7. Hiding Things From Your Mortgage Broker

Most of us have experienced times of financial difficulty at some point.  While it can be embarrassing to discuss issues like this, your mortgage broker is there to help you get loan approved despite such issues.  Your mortgage broker can only help you with those things with which s/he is aware.

8. Making Late Payments

Late payments, especially those within the last year, can be very detrimental to getting the best rate, terms and even the difference of being approved at all.  While this might seem like unnecessary advice, ALWAYS pay on time.

9. Over Using Credit Cards

Credit cards are a convenient way to make purchases, but if not paid off or balances kept low you might find it more difficult to get the best rates and terms on your mortgage.  Keeping your total debt as low as possible helps you get the mortgage that best meets your specific needs.

10. Cosigning On Someone Else's Loan

While it can be a great service to a friend or loved one, signing to guarantee someone else's loan is often a big head ache for the cosigner.  Before cosigning you decide if you're willing and/or able to assume the liability.

11. Not Getting All The Facts

It is important to learn the total cost of your mortgage loan, both at closing and for the life of the loan.  While mortgages can look a lot alike there can be subtle differences which can save or cost you thousands of dollars.  Get all the facts and know what to expect.

Mortgage regulations have changed significantly over the last few years, making your options wider than ever.  Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands of dollars and years of expense.

Get the Right Information - Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you be informed about the factors involved.

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

Top 10 mortgage mistakes and how to avoid them

Here's a list of the top 10 mortgage mistakes home owners/buyers should avoid when planning to finance a home purchase or refinance an existing mortgage.

Anything on this list should be avoided at all costs to ensure your credit score is as high as possible and that you don’t run into any qualification problems when it comes time to get that sparkling new mortgage. Otherwise you could end up with a higher-than-necessary mortgage rate, or simply get declined!

1. While an obvious no-brainer, avoid bankruptcy or foreclosure. Either could keep you out of the mortgage game for several years.  Also avoid late mortgage payments. Even if your credit score is up to snuff, a late mortgage payment that shows up on your credit report can disqualify you with many banks and lenders. 
2. Not "locking in" a mortgage rate. If you fail or forget to lock an interest rate for your mortgage in the months before you purchase or refinance, rates could increase.  Yes, you have the option to lock and float down a rate, but make sure you understand both options and keep an eye on interest rates before and during the home loan process. 
3. Listing your property on the MLS and then attempting to refinance that same property within six months (or longer). Lenders don’t love the idea of giving you a loan on something you don’t actually want, or tried to get rid of just months before.
4. Applying for a mortgage with charge offs and collections on your credit report (consumers may have these in error. They can be removed via a credit bureau dispute. They crush your FICO score!). Regularly review your credit report to ensure there are no surprises long before you begin the mortgage process.
   
   Put simply, a low credit score will lead to a much higher mortgage rate, and even disqualification if it drives your monthly mortgage payment high enough. Also steer clear of credit counseling. (Many banks and A lenders won’t lend to borrowers who have used these services in the recent past.)
5. Not figuring out how much you can afford well before beginning your property search. You should get pre-qualified or pre-approved before you even start looking at homes. Once you know how much home you can afford based on your salary and assets, you can properly assess the situation. Otherwise you could just be wasting your time and setting yourself up for disappointment.
6. Opening new credit cards or making excessive charges on existing credit lines before and during the loan application process. This can hurt your credit score and increase your debt load, which could lead to disqualification.  See debt-to-income ratio for more on that. You can buy your new leather couch and big-screen TV once the loan is funded and closed.
    
7. Attempting to get a mortgage with less than two years consecutive employment in the same occupation or field (unless you’re a recent grad with proof of future income). You must prove to lenders that you will actually continue to make the money you’re currently making to obtain a mortgage.
8. Trying to get a mortgage without documented 12-month housing history or your own verifiable assets that cover at least two months of your proposed mortgage payment, including taxes and insurance. Yes, lenders want to know that you paid your rent on time previously and have enough in your bank account to cover future payments.
   Oh, and the money needs to be in your account, not under your mattress.  
9. Not establishing your credit history. You generally need at least three credit tradelines (that show up on your credit report) with a minimum two-year history on each. Yes, credit is the root of all evil, but also a necessary one in the mortgage world, that is, unless you plan to pay for your expensive house with cash.
10. Not shopping around. If you don’t take the time to comparison shop, as you would any other product you buy, like a big-screen TV or a car, you’re doing yourself a major disservice. Put in the hours to ensure to find the right bank to work with and snag the best deal or better still, engage the services of a Mortgage Broker. They will do the shopping for you.
    
    Bonus tip: Don’t forget to compare different loan products, such as fixed-rate mortgages vs. variable rate, and conventional loans vs. insured loans. All have their pros and cons, and should be carefully considered before applying for a mortgage. There is no one-size-fits-all approach folks.

*Many mistakes on this list pertain especially to first-time homebuyers. Homebuyers usually always have to verify assets, employment, and credit history. Sure, you might find a lender willing to give you a mortgage without those requirements, but your mortgage rate will be less than desirable!

Do I qualify for a mortgage? I can help. Call me or complete my secure, online mortgage application.

How much you need to earn to buy a house in every major Canadian city

Many say property is the best investment you can make. Bursting housing bubbles and mortgage scandals aside, they’re usually right.

The price of making that investment varies widely in Canada, depending on where you live. We looked at how much you need to earn to buy a house in every major Canadian city.

To get these numbers, we consulted Adrian Williams. He explained that to calculate the income required you need to know the purchase price, down payment, rate, utilities – mortgage qualifying must include a minimum of $100 a month for heating costs – and taxes.

We got the average purchase price per city from the Canadian Real Estate Association, and Williams provided the property tax rates. At his suggestion we used a 2.99% interest rate, which is the average qualifying rate for a 5-year fixed term. We used a down payment of 10% of the purchase price and calculated $100 a month for utilities.

According to Williams, “Other factors that will be included with mortgage qualification are the total monthly payment obligations from credit card, LOC’s, personal and car loans, car lease and other types of credit that require a monthly payment.”

Here is what you need to earn to buy a house in every major Canadian market. (Numbers are rounded to the nearest dollar.)

Toronto

Average price: $587,505

Monthly mortgage payment: $2,560

Property tax: $354

Income required: $113,009

Vancouver

Average price: $819,336

Monthly mortgage payment: $3,570

Property tax: $251

Income required: $147,023

Calgary

Average price: $465,047

Mortgage mortgage payment: $2,026

Property taxes: $236

Income required: $88,578

Edmonton

Average price: $365,520

Mortgage payment: $1,592

Property tax: $244

Salary required: $72,617

Regina

Average price: $331,161

Monthly mortgage payment: $1,443

Property tax: $378

Income required: $72,028

Saskatoon

Average price: $349,322

Monthly mortgage payment: $1,522

Property tax: $366

Income required: $74,546

Winnipeg

Average price: $270,605

Monthly mortgage payment: $1,179

Property tax: $274

Income required: $58,235

Ottawa

Average price: $357,887

Monthly mortgage payment: $1,559

Property tax: $336

Income required: $74,820.28

Montreal

Average price: $344,273

Monthly mortgage payment: $1,500

Property tax: $237

Income required: $68,884

Halifax

Average price: $264,447

Monthly mortgage payment: $1,152

Property tax: $266

Income required: $56,929

by  Elizabeth Bromstein