Mortgagenomics Canada

Did you know? Approximately 15% of Canadians are self-employed, making this an important segment in the mortgage and financing space. When it comes to self-employed individuals seeking a mortgage, there are some key things to note as this process can differ from the standard mortgage.For self-employed individuals with an established business seeking best rate financing, the business must have a minimum two years of history. This includes self-employed applicants who own a full or part-time business in the form of sole proprietorships, incorporations, and partnerships.In order to obtain a mortgage when self-employed, most lenders require your most recent 2 years of Personal Income Tax documents; Notice of Assessments and T1 Generals. Typically, individuals who can provide these documents - with acceptable income levels – should have little issue obtaining a mortgage product and rates available to the traditional borrower.One primary benefit of being self-employed is the privilege of writing

The criteria for mortgage qualification involves fairly deep analysis of your personal income generation, your history of handling mainly unsecured consumer credit sources (like credit cards, lines of credit, car loans) and lastly, the amount of skin you have in the game - the down payment, or if refinancing, the current equity stake in your property. But the main driver and gatekeeper to all of the qualification tiers is the loan-to-value ratio (aka LTV).  Generally speaking, the higher your down payment (or equity position), the less rigid the qualification guideline.Here is a brief outline summary of the key LTV thresholds:up to 95% LTV - the least skin in the game, you will rarely (if ever) get exceptions from lenders. You are an inside-the-box applicant and need to fully comply with the standard qualification criteria. Regardless of which lender you team up with, the outcome will generally be the same...th

Rental Property Mortgages - how to qualify for them.Qualifying for a mortgage when purchasing or refinancing a rental property can get really confusing. Here are the key qualification criteria when qualifying for a Rental Property Mortgage:the minimum down payment to qualify for a rental property mortgage ranges from 20% to 35% (refinances are limited to 65% of the appraised value)rental income generated from the property does not necessarily translate into direct qualifying income. 50% to 95% of the rental income is eligible as qualification income (varies radically from lender to lender)the rental income eligibility is classified as either one of the following (depending on the lender and type of income):General Qualification Income (least preferred): the mortgage balance is maintained in the application and becomes part of the overall debt load that needs to be serviced for qualification purposes Offset Income (most preferred, best bang for your buck): the mortgage balance is removed from th

The Mortgage Cash Back Ladder: (for a $500,000 mortgage)1.0% cash back ($5,000) = 2.89% 5 year Fixed Rate, or 1.45% Variable Rate 1.5% cash back ($7,500) = 3.04% 5 year Fixed Rate, or 1.50% Variable Rate2.0% cash back ($10,000) = 3.19% 5 year Fixed Rate, or 1.60% Variable Rate3.0% cash back ($15,000) = 3.49% 5 year Fixed Rate, or 1.85% Variable Rate5.0% cash back ($25,000) = 3.94% 5 year Fixed Rate, or 2.35% Variable RateHere are some smart and useful ways to get the most bang from your Mortgage Cash Back proceeds:pay all or a portion of your closing costs (property transfer tax, legal fees, home inspection, movers, etc)use the proceeds to suit up your new place (furniture, new appliances, etc.)begin work on any renovation or home improvement projects (new paint, kitchen, bathroom, etc.)pay off high interest debt (credit cards, lines of credit, etc)invest the cash back proceeds in investments (rrsp, tfsa, stocks, etc)...basically, you can do whatever you desire with the proceedsBut what's the c

Click Here to be re-directed to the podcast blog for more detailed transcripts.Here is a summary outline of the key qualification criteria for Alternative Lending mortgages in Canada (formerly known as subprime mortgages):minimum down payment of 20% is requireddebt servicing ratios are as much as 35% higher than triple-A lenders (this means applicants can qualify for more mortgage)income qualification criteria is far less demanding than triple-A lender qualification guidelinesvery flexible to applicants who have a weak/damaged credit historyaccommodating to newly established self employed applicantshigher rates, shorter tems..."band-aid" or "transitory" mortgagesexpect a fee of 1-2% on the full mortgage balanceHere are some examples of common sense qualification:rather than requiring a recent pay stub and employment letter, an alternative lender may simply request 3 months worth of bank statements to verify income deposits into your bank accountin triple-A lending, self employed applicants require a minimum t

With virtually every economic indicator calling for rate hikes, Canadian mortgage holders are left wondering how to prepare and react to the already-in-progress wave of interest rate volatility. Regardless of the degree and timing of the pending increases, concerned mortgage holders in Canada have the opportunity to control their own destiny and minimize (or even eliminate) potential risks associated with rising interest rates (i.e. higher mortgage payments). Click Here to be redirected to the blog version of this episode.Contact Marko, he's a Mortgage Broker!604-800-9593 direct Vancouver403-606-3751 direct Calgarymarkogelo.comFacebook@markogelo (Twitter)MarkoMusic (SoundCloud Account)...all podcast music tracks are performed and produced by Marko See acast.com/privacy for privacy and opt-out information.

Buying a home while selling your current one?The transition from selling one property to purchase another sounds simple, but there are a few critical events throughout the timeline that you need to be aware of.Here are 6 key points to know when scaling up from one property to another: CLICK HERE to read the entire transcript (1) perhaps the biggest dilemma: SELL first, then BUY, or BUY first, then SELL?  (2) Use a Bridge Loan so you can gracefully transition from one property to another!  (3) Consider porting your mortgage, but ONLY if it makes sense!(4) secure a Home Equity Line of Credit on your current property BEFORE you list it for sale(5) call your existing lender and find out what your current mortgage balance and discharge fee will be(6) If you're planning to scale up at a specified time in the future, renew your current mortgage with the end in mindContact Marko, he's a Mortgage Broker!604-800-9593 direct Vancouver403-606-3751 direct Calgarymarkogelo.comFacebook@mar

Can BC Provincial Nominees qualify for a mortgage?Yes! A BC Provincial Nominee is eligible to qualify for a mortgage in Canada. Here are the key mortgage qualification criteria to be aware of when qualifying for a mortgage as a BC Provincial Nominee:you can purchase a property with as little as 5% down payment, but only for purchases under $1Mfor purchases that are $1M or greater the down payment increases to 20% and potentially higher depending on how large your purchase price is (down payment can reach up to 35% for purchases that exceed $2.5M)must have relocated to Canada within the past 2 to 5 yearsmust be employed for a minimum of 3 monthsfull income confirmation is required (recent pay stub and employment letter)a 90 day history of your down payment funds are required (i.e. bank statements, investment statements, etc). If you are unable to provide a 90 day history, then prepare to explain where the funds were derived from along with applicable documentation to verify so (i.e. from sale of

How to get the lowest possible mortgage payment?Sometimes life presents you with some expensive curve balls and before you know it your monthly budget creeps up and you're suddenly in a pinch. This happens to Canadians more than you can think and oftentimes the mortgage payment is looked upon as the primary means to bring you back to that financial comfort zone.Here are 4 ways to get the lowest possible mortgage payment:Request that your mortgage amortization be increased to its maximum. This can significantly decrease your mortgage payment, but it all depends on how your mortgage was underwritten with the lender it is currently with. For example, your amortization may currently be at 23 years and 8 months, but it possibly may have been underwritten at 30 years. If this is the case, your payment would be eligible for a drastic payment reduction.Convert all, or a portion of your mortgage into a Home Equity Line of Credit (HELOC). A HELOC payment does not include the principal portion t

Here is a breakdown of the the two types of variable rate mortgages:Capped Variable Rate Mortgage:the interest rate fluctuates when a lenders prime rate changesgenerally, your payment amount stays fixed for a determined period of time or up to a certain threshold of rate increases (as outlined by your specific lenders loan terms and conditions), however, the interest rate will fluctuate with any changes in Prime rate. If Prime Rate goes down, more of your payment will go towards paying off your principal; if the Prime Rate goes up, more of your payment will go towards interest costs rather than the principal pay down.Adjustable Variable Rate Mortgage:the interest rate fluctuates when a lenders prime rate changesyour payment amount adjusts automatically to reflect changes in the Annual Interest Rate and in the number of days in the month. This means your payments may change from payment date to payment date.Contact Marko, he's a Mortgage Broker!604-800-9593 direct Vancouver403-606-3751 dire

8 First Time Homebuyer Tips1) Be aware of the minimum down payment requirements5% up to $500,000, then 10% on the balance thereafter up to $999,99920% for $1M purchases up to $2.5M, then 40% on the balance thereafter2) Be aware of closing costsClosing costs are ancillary expenses throughout the process of completing your real estate transaction. In addition to your down payment funds, the lender will also request document verification for closing costs. All of the following costs are out-of-pocket and not included in overall mortgage:Pre-Closing Date Costs: Home Inspection Fee ($200-$400), Home Appraisal ($300-$400) Closing Date Costs: Land Transfer Tax (this will vary depending on city/municipality). In British Columbia, the property transfer amounts to 1% of the first $200,000, then 2% on the amount over $200,000 up to and including $2M, and 3% thereafter (i.e. for a $900,000 property purchase, your Land Transfer Tax would amount to $16,000).&

Intro (pre-amble): up to 13:10 mark of podcast (Canada's post election promises; tax the flippers, ban the foreigners, eliminate blind bidding, and increase the minimum down payment cut-off to purchase a home | is China's Evergrande shrapnel Canada bound?)Ok, so this isn’t necessarily the 100-step procedure on how to get a mortgage if you are new to Canada, but these are a summary of the most common pain points...so other stuff like income qualification I’ve left out because the criteria for income is pretty much standard and kinda common sense. So, here the the key qualification criteria to be aware of (if you are new to Canada and want to purchase a property):Make sure your funds/cash are ready to be cashed. This is critical in two ways; (i) to ensure that the deposit to place a competitive offer is ready for swift movement during the offer stage, and  (ii) equally important but often problematic is that the funds are fully verified by the lender (which leads to my next point) 

Pre-episode Talk (up to 11 minute mark): Modern Monetary Theory, Canada's inflationary path, and my thoughts on how to position yourself on the right side of a volatile economic environment. Episode Notes:Down Payment Sliding Scales:Over the years down payment guidelines have inserted a component within the qualification criteria known as "sliding scale". Oftentimes it could catch a buyer off guard when budgeting for a purchase leaving them scrambling for the unexpected shortfall in funds. The first bullet point below is the industry standard adhered to by all lenders in Canada, but the second bullet category varies with lenders and is scaled as per locations/regions and the lenders specific risk tolerances. For contrast, I've included the most competitive scales for Vancouver and Calgary.Minimum down payment thresholds for Vancouver:5% down payment up to $500,000 Purchase Price, then 10% on the balance that exceeds $500,000 up to $1M Purchase PriceEXAMPLE: for a $800,000 Purchase, the mi

With real estate prices soaring across the country many applicants are seeking assistance when it comes to qualifying for a mortgage.  More commonly, the assistance comes in the form of gifted down payments from the Bank of Mom & Dad, but coming in a close second these days is the addition of applicants to help combat the rigid income qualification criteria.  You have likely heard of the term, Co-Signer.  This is the 11th hour addition to a mortgage application (usually mom or dad) that gives the qualification effort that extra little boost required to get the main applicants over the hump.  But what many people don't know is that there are two types of co-applicants and various conditions and characteristics associated with each one; a Co-Signer and a Guarantor.  Here are the distinguishing factors of both:Key Characteristics of a Guarantor:Guarantors are usually added to an application when the main applicants can sufficiently qualify based on their income, but instead have some

If you're about to secure a mortgage, here's something you might want to consider regardless of whether it's a purchase, refinance or renewal.  Make the mortgage readvanceable.What does readvanceable mean?Firstly, a readvanceable mortgage starts out as a typical mortgage where a specific portion of your payment goes towards the interest charge and the rest gets directly applied towards the mortgage principle gradually paying it down over time, thereby, building equity in your home.  But this is where the similarities stop and the readvanceable mortgage begins to impose its leading characteristics.Firstly, readvanceable mortgages include at least two components; a regular principal-interest mortgage and a Home Equity Line of Credit.  The supplementary Home Equity Line of Credit acts as the primary component that allows the mortgage to become readvanceable.  A mortgage becomes readvanceable when the first mortgage payment is made and it continues on until the mortgage is eventually paid off.

Why are personal income tax documents required when qualifying for a mortgage?In most cases, personal income tax documents are required particularly when qualifying self employed applicants. But over the past few years, the Canadian mortgage underwriting standards have increasingly expanded upon its qualification criteria. As a result, the request for personal income tax documents from mortgage qualification applicants has quickly become the norm for all employment types, rather than the exception.Let's first identify the key personal income tax documents that lenders typically request:T-SLIPS (generated by your employer)The T4 is the most common of all T-slips and is also referred to as a "Statement of Remuneration". It is a tax form produced by a singular employer, you will receive a separate T4 from every employer that you were employed with in the calendar year. The T4 is useful for mortgage qualification purposes in that it confirms your total income

If the banks say no, what is your Plan B? (and yes, there is also a Plan C)For most Canadians the end game to qualifying for a mortgage is landing with one of Canada's Prime lenders (also known as the Big 5 or 6). And along with that comes the satisfaction of defeating/fulfilling the sometimes (or more like, everytime) extraneous qualification guidelines and eligibility criteria. But at the end of the day, it's totally worth it as you can boast about the great interest rate you were awarded and the exclusive membership to Canada's growing homeowner club.But what if the pathway to the Prime lenders is not successful for you, what then?Well, if all else fails, there is always a Plan B (and there is a Plan C too). But let's talk about Plan B first...I like to refer to Plan B as "BandAid" mortgages. They are typically 1 year terms (and also available as high as 3 year terms). They are fully renewable and feature most, if not all of the typical features and terms you would expect to see in a Prime m

With over 300,000 new residents arriving to Canada (and about 400,000 expected on an annual basis for the next 2-4 years), Canada's banks have been continuously altering and modifying their lending guidelines to accommodate for immigrant-friendly mortgage qualification programs. Today, I want to talk about mortgage qualification for temporary residents, particularly for work permit holders.What is a Temporary Resident?Directly from the Government of Canada's website:"A temporary resident is a foreign national who is legally authorized to enter Canada for temporary purposes. A foreign national has temporary resident status when they have been found to meet the requirements of the legislation to enter and/or remain in Canada as a visitor, student, worker or temporary resident permit holder. Only foreign nationals physically in Canada hold temporary resident status."So basically, a Temporary Resident is the first step to becoming a Canadian Citizen...but also, it could simply just b

A mortgage refinance is often a momentous and rejuvenating experience. For most homeowners it's an opportunity to reset and forge a new pathway to a more promising outcome (i.e. paying off high interest debt with low interest mortgage funds), and in the process of doing so, perhaps establishing or creating a more pronounced awareness of spending and more importantly, recognizing the consequences - of overspending. It's a second chance...and rather than calling on a family member or close friend to bail you out, you call on your home to do so. And then there are the refinancers coming from an entirely different angle...the ones that are looking to tap into their equity to further improve their net worth by borrowing from their home equity to invest. These are the refinancers who are set on leveraging good debt to create wealth and ultimately increase their net worth.Regardless of what it is that motivates one to refinance their mortgage, another outcome arises that is often not accounted fo

I often get asked what the minimum down payment requirement is to purchase another home. And by another, I mean residing in your current home as you are and purchasing another home that you or any one of your family members will frequent at one point throughout the year...like a home away from home. For example, it may be a vacation property a couple of hours from where you currently live, or perhaps a downtown condo across the country where your child is attending university.  Regardless of the location, as long as the property is intended for family occupancy at one point throughout the year, the minimum down payment requirement is 5%! Yep, that's it, 5% down payment to purchase another home! The formal name of the mortgage guideline is known as the Second Home Mortgage.Let me be clear though...notice that I am not referencing the other home as a rental property, but rather another home. Not only does the property have to be intended for family use only, but as i