Published by DLC marketing team.

People don’t always want to talk about home insurance, but when it comes to your house there is no better investment than insurance. But, with the number of insurance products available, it can be hard to know where to start! While it can seem overwhelming, it’s a good idea to get familiar with the basics of some of the required and optional insurance coverage when it comes to your home.

default insurance

The first and perhaps most common form of insurance when discussing the mortgage space is known as “default insurance”. The purpose of mortgage default insurance is to protect the lenders, allowing them to lend money more aggressively.

This type of insurance is mandatory for any homes where the buyer puts less than 20 percent down on the purchase. In fact, default insurance is the reason that lenders accept lower down payments, such as 5 percent minimum, and actually helps these buyers access comparable interest rates typically offered with larger down payments.

In Canada, there are only three companies that offer default insurance: Canada Mortgage and Housing Corporation (CMHC), which is run by the federal government and two private companies: Genworth Financial and Canada Guaranty.

Default insurance typically requires a premium, which is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). This premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.

According to CMHC, the minimum down payment required for mortgage loan insurance depends on the purchase price of the home:

• For a purchase price of $500,000 or less, the minimum down payment is 5 percent.
• When the purchase price is above $500,000, the minimum down payment is 5 percent for the first $500,000 and 10 percent for the remaining portion.

It is also important to note that default insurance (or mortgage loan insurance) is available only for properties with a purchase price or an improved/renovated value below $1 million.

title insurance

Another insurance policy that potential homeowners may encounter is known as “title insurance”. This is an insurance policy that protects residential or commercial property owners and their lenders against losses relating to the property’s title or ownership. In fact, it is so important to lenders that every single lender in Canada requires you to purchase title insurance on their behalf. It is not a requirement to have coverage for yourself, but that doesn’t mean you should dismiss it outright.

Title insurance can protect you from existing liens on the property’s title, but the most common benefit is protection against title fraud. Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him or herself – without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money. As the old adage goes: “It’s better to be safe than sorry” and the same goes for insurance.

Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property. Title insurance for the lender is typically $250 to $300, while title insurance for yourself runs around $125 to $150. You can purchase title insurance through your lawyer or title insurance company, such as First Canadian Title (FCT).

mortgage protection insurance

Before you sign off on your mortgage, there is one more type of insurance your mortgage broker should tell you about – Mortgage Protection Insurance. Despite being optional, it should still be considered. Almost every mortgage broker in the business has a story of someone who passed on the extra coverage and tragedy hit.

Unfortunately, life happens but it doesn’t have to happen to your home. While you may not want to spend the money now, or maybe you already have some type of life insurance policy through work, don’t discount this option as it is often a blessing in disguise – especially when it comes to homeowners with a spouse and children. Can they carry on with the mortgage payment? If not, they would be forced to sell on top of everything else. For a few extra dollars a month, mortgage protection insurance provides that safety net in the event it is ever needed.

When it comes to choosing a mortgage protection plan, there are a number of different policies available depending on your budget. Manulife’s Mortgage Protection Plan offers immediate insurance and can be canceled at any given time. If you think you may be covered through your work, it can’t hurt to take a closer look at the policy.

Mortgage insurance is what we consider “debt replacement” and life insurance is more fitting as an “income replacement”. This is an important distinction and you should understand the difference. You also need to see just how much you’re going to get through your life insurance policy; you may be surprised just how little it amounts to.

property + fire insurance

Lastly, after you’ve signed off on your mortgage you need to close on the home. Before you do this, your lender is going to require home insurance. When it comes to home insurance, there are many different types of coverage however it generally protects you from damage to the home that is accidental or unexpected, such as a fire.

Home insurance can also cover the contents of your home, depending on your insurance package. For individuals looking at purchasing condos or townhouses, this is especially important! The insurance from strata typically protects the building itself and common areas, as well as your suit “as is”, but it will not account for your personal belongings or any upgrades you made. Be sure to cross-check your strata insurance policy and take out an individual one on your unit to cover the difference.

One final thing to consider with regards to home insurance is that, just because you have home insurance you’re not necessarily covered in the event of a flood or earthquake. Depending on where you live, you may need to purchase additional coverage to be protected from a natural disaster. It’s best to talk to your insurance provider to confirm that you are covered.

At the end of the day, purchasing a home is a huge investment. Why risk it when there are so many great insurance products to ensure your investment – and family – remain protected? Reach out to a Dominion Lending Centres Mortgage Professional today to find out what coverage is needed and how to go about getting it!

Published by HomeEquity Bank.

Everybody wants to live a long and healthy life with time to enjoy their golden years. But while living to 100 years old is a lofty and laudable goal, there may be some unexpected aspects that are worth considering.

Here are some of the good and the bad when it comes to making it to 100.

Pro #1: More time to learn

Learning a new skill is truly one of the great joys in life. And with more time comes more opportunities to pick up skills people often don’t have time for in their younger years. While your first six or so decades might be spent working, raising children, and building a foundation for long-term wealth, you can spend your retirement trying new things. Whether that means learning a new language, starting a new hobby, or volunteering, living to 100 means you can have more time to do what you love.

Con #1: Financial shortfalls

While there are many perks to getting older, and possibly living to 100, people often don’t account for the extra funds needed. Many retirement plans are based on a life expectancy of 85, so it’s important to look ahead at what you’ll need and plan as best you can. Something like a reverse mortgage is a great tool to provide any needed funds for your later years – so you can live your best lifestyle as long as possible.

Pro #2: Seeing family members grow up

While many people plan and expect to raise their children, and even their grandchildren, one of the great joys of becoming a centenarian is the opportunity to meet, raise, and spend time with great grandchildren. A reverse mortgage offers the chance to provide these family members with an early inheritance, fund their education, or even help them break into the real estate market with money for their down payment.

Con #2: Health issues

It’s hard to make plans around your health, but when it comes to living a long, fruitful life, it’s likely that some health-related issues will arise. And while many people have an idea of what they’ll do if they fall ill, and perhaps have health or critical illness insurance, a reverse mortgage is another option that should be considered. With the average cost of nursing care ranging from $2,000-$10,000 per month, a reverse mortgage can provide the cashflow to cover these costs or retrofit your home to allow you to age in place.

Pro #3: New horizons

Whether it’s travelling to a dream destination, or starting a new project close to home, retirement allows many people the time to chase their dreams, but a reverse mortgage can allow you to afford those dreams and tick off your bucket list. Perhaps there is a business you’ve always wanted to start, an organization you’d like to volunteer with, or a dream trip or hobby you want to fund; in any case, heading toward year one hundred means more opportunities to attain your retirement dreams.

Con #3: Aging in place

Did you know 93% of Canadians want to stay in the home they love? To ensure your home stays just as you love it, and to help you maximize the lifestyle you enjoy, unlocking the equity in your home with a reverse mortgage is a great way to continue living your dream life in your dream house well into retirement.

Contact your DLC mortgage broker to find out how the CHIP Reverse Mortgage by HomeEquity Bank can be a viable option to help you live your best retirement!

Published by DLC Marketing team.

Did You Know? The average Canadian owes $23,000 in consumer debt and has at least 2 credit cards. Source: CBC.ca

If you live paycheque to paycheque, the idea of somehow having enough money to invest and eventually have financial freedom seems about the furthest thing possible.

But experts in financial education like to point out, no matter your income and place in life, a few changes to the way you’re living life can make all the difference. It’s never too late to start learn and reverse course. If you’re still not convinced, here are a few simple ideas to get you started:

PRETEND YOU EARN LESS THAN YOU DO

Give yourself a cut in pay. The goal is to put 10% in savings from each paycheque into your savings account. The easiest way is to do an automatic direct transfer from your chequing account to your savings every pay day.

CREATE A BUDGET

In order to stop living paycheck to paycheck, you need to know where that paycheck is going. Creating a budget is simple with Google docs, or look into other online tools and sites to get started.

BUILD AN EMERGENCY FUND

Once you have your budget in place, review it and break it down into non-discretionary expenses (rent, groceries, utilities, etc.) and discretionary expenses (eating out, entertainment, clothes, etc.). See where you could cut down on discretionary spending and put that money towards your emergency fund. Even starting with just a little amount is great and helps you build the habit of saving.

CONSIDER DOWNSIZING

It may be time to consider a lifestyle change. Consider moving to a smaller place. Get rid of that cost of going to that expensive gym with a trip to the local park. Think about if you really need that brand new car or if a used one would work just as well.

PAY DOWN DEBT

If you have a lot of credit card or unsecured debt, try paying the minimum on all but one of them and aggressively pay down that one card. Once it’s paid off, attack the next one. If you’re so deep in debt that you can’t fight your way out, consider consulting with a company who specializes in debt consolidation. They will help you negotiate your debt into smaller amounts that you can begin to pay off.

DON’T FORGET YOUR FUTURE

Putting at least 3% of your paycheck into a retirement fund is a great idea, or maybe when you get your first raise instead of thinking of it as free money, simply put it into a fund and forget about it. You’ll be glad it’s there when you need it in the future.

Published by FCT

Phishing attacks are among the most common methods used by cyber criminals to steal personal information. Surprisingly, many people are unaware of just how much of a threat these attacks pose. In essence, phishing attacks use a malicious email or website (designed to mimic or replicate real, reputable entities) to trick a person into divulging private or personal information such as usernames and passwords. They may vary in sophistication and plausibility, but the purpose of the attacks is invariably the same.

Alarmingly, while they were once easily identifiable by even passingly-competent tech users, modern phishing attacks are incredibly convincing. Combined with the sheer volume of digital media we use on a daily basis—social media, work and personal email, subscription services to name a few—we’ve never been more likely to inadvertently fall prey to an attack. With that in mind, it’s more important than ever to be informed about phishing and all the forms it can take, and here’s what you need to know.

how phishing used to be done

Phishers use social engineering, particularly by leveraging fear, to trick people into clicking on fake links. Usually, this would allow scammers to steal things like login credentials to access funds (from your bank) or personal details to apply for credit cards etc.

You’re likely already familiar with what a phishing email looks like. Odds are, you’ve seen highly suspect notices crop up from (purportedly) the CRA or any number of banks, threatening immediate legal trouble or termination of your account unless you verify your details immediately. Full of poor grammar and misspellings, these kinds of emails tend to undermine their own credibility, which is sometimes done deliberately to identify the perfect targets.

In any case, the conventional phishing email or message usually contain a number of common traits, including:

• the aforementioned poor grammar
• strange or infrequent senders
• attachments, especially in cases where the information could (logically) have been in the body of the message itself
• generic greetings (“Dear Friend”)

However, not all phishing is directed at a recipient. Some types, like “watering hole” attacks, use vulnerabilities or flaws on websites frequented by their target groups to steal information. Typically, they exploit these vulnerabilities to install malware or to create credible-looking pages (on a real website) which can dupe unsuspecting site visitors. More insidiously, they use the websites’ actual email notifications or newsletters to direct people to compromised sections where they may be exposed to “drive-by download” attacks. This, of course, makes them especially hard to detect and safeguard against.

how it’s evolved

Phishing still leverages social engineering, but has added “annoyance” alongside “fear” to the selection of emotions the attempts are designed to exploit. If you’ve ever suddenly been spammed with a barrage of newsletters or cc’d emails that you never signed up for (or received before), there’s a good chance you’ve been targeted in the hopes that you’ll be annoyed enough to try to unsubscribe using their (malicious) link without paying too much attention.

In fact, the aforementioned “drive-by download” attacks are great examples of how far phishing tactics have come. In essence, this kind of attack installs malicious programs on your computer without your consent when you visit a compromised website or open an infected attachment in an email. Moreover, victims are usually unaware that they’ve been attacked at all. Stealing credentials at an individual level is no longer the ultimate end of phishing; rather, those credentials are now used to get close to someone else that’s more valuable, or to install malware which can be used to compromise your organization!

Which brings us to: “spear phishing” and “whaling”, the evolution of the phishing email. While regular variants are still common, phishers are increasingly taking a much more targeted approach with their attacks. Instead of relying on the high-volume mass email approach, they’re now dedicating time and effort to creating very convincing and functionally undetectable phishing emails specifically targeted to a specific individual or organization—something known as “spear phishing”.

This is particularly prevalent in the corporate sphere, where strategic employees or senior executives are singled out as ideal victims. Similarly, “whaling” attacks carefully construct bogus messages to look like they originated from a superior or someone highly-placed in a company or organization in order to trick the recipient into complying.

While the specifics of the attack types differ slightly, the common underlying factor is the extra effort spent by phishers on researching details about their targets in order to make their attacks look legitimate and convincing. If you’re still working under the assumption that phishing is a low-effort, easily-spotted tactic you may find yourself taken completely unawares by a sophisticated message.

Even worse: you might not even notice you’ve been the victim of an attack! For example: following a successful dupe, you’ll usually be redirected to the legitimate site you thought you were accessing, in the hopes that you won’t notice that you’ve accidentally divulged your login information to a scammer.

how to protect yourself

With myriad ways for scammers to target you, it’s understandable if you feel like trying to protect yourself from phishing attacks is a futile endeavour. However, that’s not the case at all. Now that you have a reasonably good handle on just how far (and convincing) phishing attempts can be, you can cultivate a healthy amount of skepticism for any messages, links, or requests that seem even a little out of the ordinary while being very protective of your login credentials, passwords, and user details.

In addition, there are also straightforward measures companies and individuals can employ to thwart phishing attempts, such as:

• Automatically flagging “out-of-organization” emails, or emails from infrequent senders. Harmless emails flagged by these systems will reveal as much from a quick read, but the simple addition of these flags can undermine even an authentic-looking phishing attempt (for example: why is an email from your manager asking you for confidential information being sent from a random gmail address instead of the usual office address?).
• Implementing a phone call or in-person approval for large transactions or major decisions. This is particularly useful in the case of whaling attacks—companies should encourage their employees to be extra certain when performing certain transactions or making major changes, especially if it prevents loss of funds or data on a massive scale. A simple phone call or verbal check can quickly unravel a carefully-constructed whaling attempt.
• Being aware of your personal information that’s publicly-visible. If you haven’t yet, this is a great time to go through your social media and prune details such as your date of birth, education details, etc. At the very least, you should set them to only be visible to trusted friends, family, and associates. After all, those details can be used to brute force your passwords or bypass your security questions to gain access to your accounts.

Knowing when and how you can be targeted by cybercriminals will go a long way to ensuring that you won’t fall prey to their tactics. It’s a bit of a tired old saying, but knowing really is half the battle here—proper countermeasures are the other!

Written by Derek Cole

Been somewhere lately?  For most people, travel has been something they have have been waiting for since late 2019.  It’s official!  Travel is back baby… until the next shutdown.  Hopefully that doesn’t happen, but I feel like I cant make such a generalized statement without some sort of disclaimer.   Moving on. The line’s at airports are brutal now.  Even worse than pre 2019 due to staffing and other issues.  If you’re not at the airport at least 3 hrs early you are at risk of missing your flight.  So what can you do to increase your chances of success?

1. For travel to and from the USA get a nexus card. They are free for those under the age of 18.  $50us for adults.  A little bit of pre-planning and paperwork and you can breeze through those long security lines with a smile on your face.
2. Check in online.   Yes there is still a line to drop the bags off, but the line generally moves fairly quick.  Because your baggage tags are printed at a mobile station you don’t have to spend hours waiting for those who are less organized than you.  If you can cram all your swimsuits into a carryon, even better.
3. Sit in the Emergency exit row.  If, like most people you cant afford business/first class. Exit row is the next best thing.  Not only do you get more leg room, you also (airline depending) will be allowed to board the aircraft first.  This means you know that you’re carry on luggage will be near you.  Do you like to recline your seat? Make sure you choose the back row if there is more than one EE row.  In the front row the seats don’t recline but have all other perks.
4. If you need to park a car. Call around to some local airport hotels.  Lots will offer free parking for the duration of your trip if you stay the night before leaving.  Not only would this potentially save you money in parking, you will also have access to a free shuttle. Then you can get a good nights sleep and wake up more organized, rested and overall start your trip with a clear mindset.
5. Relax, be prepared.  The more prepared you are the better things will go.

Lastly remember the journey is still part of the trip.  Making the best of it will automatically add 2 days to your already short vacation. Lastly, I want to leave this little gem for those that made it till the end.   If you check in with less than 24hrs till departure on some airlines you can select your seat for free!  This includes the emergency exit row.  Fly Safe!

So, you are looking to purchase a second property! Congratulations! This is a great opportunity for you to expand your financial portfolio and ensure stability for the future. However, before you launch into this purchase there are a few things you should know, depending on which type of second property you are looking to purchase.

SECOND PROPERTY WITH INTENTION TO RENT

Buying a property for the purpose of renting it out to someone else comes with different qualifying criteria and mortgage product options than traditional home purchases. Before you look at purchasing a rental property, there are a few things to consider:

1. The minimum down payment required is 20% of the purchase price, and the funds must come from your own savings; you cannot use a gift from someone else.
2. Only a portion of the rental income can be used to qualify and determine how much you can afford to borrow. Some lenders will only allow you to use 50% of the income added to yours, while other lenders may allow up to 80% of the rental income and subtract your expenses.
3. Interest rates usually have a premium when the mortgage is for a rental property versus a mortgage for a home someone intends on living in. The premium can be anywhere from 0.10% to 0.20% on a regular 5-year fixed rate.

Rental income from the property can be used to debt service the mortgage application, but do bear in mind that some lenders will have a minimum liquid net worth requirement outside of the property. Also, if you do eventually want to sell this property it will be subject to capital gains tax. Your accountant will be able to help you with that aspect if you do decide to sell in the future.

VACATION PROPERTY

While vacation properties are not always the perfect investment, they are popular options for people who want to get away from it all and build memories in! If you’re motivated to head down that road, buying a vacation property is essentially like purchasing a second home.

If you are considering buying a unit within a hotel as a vacation spot (known as “fractional ownership”), it is important to note that if there is any mention of using your vacation home to provide rental income it will be treated like an investment property.

SECONDARY PROPERTY

Most people are trained to stay out of debt and don’t tend to consider using the equity in their home to buy an investment property, but they haven’t realized the art of leveraging. If you’re using equity from your primary residence to buy a secondary property, keep in mind that the interest you’re using is tax deductible. Consider that you’re buying an appreciating asset, and if you put a real estate portfolio and a stock portfolio side-by-side, they don’t compare.

WHO IS A GOOD CANDIDATE?

You might be surprised to learn that you don’t need to make six figures to get in the game. Essentially, you just have to be someone who wants to be a little smarter with their down payment. Before taking on a secondary property remember that the minimum down payment is 5% of the purchase price – unless you are intending to rent, in which case it is 20% down.

When it comes to purchasing a secondary property, whether for investment or rental or vacation, it can be a great opportunity! As your mortgage broker I can work with to find the best solution for your unique needs.

AIR BNB ON YOUR MIND?

More and More Canadians are hopping on the short-term rental train as Air bnb’s popularity has sky-rocketed over the last few years. It’s not a bad way to earn extra money, but don’t forget there are a few things to consider:

• Check strata/city bylaws
• Contact your insurance provider to get correct coverage
• Talk to your mortgage broker to see if a short-term income property can affect your approval
• Consider tax implications, and talk to an accountant.

The more services you provide as a host, the greater the chance that your rental operation will be considered a business.

Published by DLC Marketing team

As online-based transactions become more prevalent, cybercriminals are finding new and creative ways to steal your money.

So, what can you do to make sure you don’t fall prey to these malicious attacks? Here are the most common types of real estate fraud schemes and some ways that you can safeguard yourself.

WIRE FRAUD

One of the most common types of real estate fraud is wire fraud. Fraudsters send you an email or text that outlines instructions on where to wire your deposit funds to be held in trust.

These cybercriminals may even set up a fake website that looks similar to your lending company’s site. The phone number, URL and email addresses will typically look familiar. They might just be one letter or number off. It’s an easy thing to miss if you aren’t looking closely.

If you send the money this way, the scammers can withdraw your money from some offshore account and you are left a victim of fraud.

LOAN FRAUD

You get an email telling you that you are pre-approved for a special mortgage loan with a super-low interest rate. Often, these “mortgage agencies” are fraudulent loan companies that offer a steep discount on loans if you pay an upfront fee.

Be wary of any service that asks for your banking information or other sensitive information. Do your research on the company before moving forward. Ask for a list of referrals you can contact.

Remember, if it sounds too good to be true, it probably is.

TITLE FRAUD

One of the most devastating real estate fraud schemes for property owners is title fraud.

Title fraud usually starts with identity theft. Scammers get a hold of your online passwords and sensitive information. Then, they use fake documents to pose as the property owner and transfer the property to his or her name. They typically take out a mortgage or line of credit against the property. The criminal then takes the cash and runs, leaving you stuck with the payments.

How to protect yourself from real estate fraud schemes

As alarming as these types of fraud are, there are many things you can do to protect yourself from becoming a victim to these schemes.

PROTECT YOUR PERSONAL DATA

Use a unique password for each login account. It’s wise to keep your antivirus and security software installed and up to date. And avoid sensitive transactions such as online banking or shopping when you’re using public Wi-Fi.

When conducting online transactions that involve money or personal data, use password-protected emails.

CONFIRM VALIDITY

Before you send money or give out sensitive information to a third party, verify that you are dealing with the legitimate company or person.

Make sure you check the original documents from your lender and call the listed phone number to verify the payment instructions.

GET TITLE INSURANCE

If you’re buying property, make sure that you get title insurance. Title insurance is your best protection against title fraud. It also protects you from existing liens on the title, encroachment issues and errors in surveys and public records.

Published by FCT

Documents Required to Qualify for a Mortgage

Mortgages can sometimes feel like endless stacks of paperwork, but being prepared in advance can save you time and stress! Getting your mortgage pre-approved is part of this prep-process, and will make things easy in the long run.

In order to get pre-approved, the lender must have taken you on as a client and reviewed all your documents before you begin house-hunting. It is important to ensure you have your pre-approval certificate before moving ahead and your pre-approval agreement in writing. This should include the pre-approved mortgage amount, the mortgage term, interest rate, payment information and the expiry for the pre-approval. Typically, they are valid for up to 120 days.

To prepare for the mortgage pre-approval process, there are a few must have documents that you will need to organize and have available prior to submission.

1. Letter of Employment: One of the key aspects for financing approval is employment stability. Lenders want to see a letter from your employer (on a company letterhead) that details when you started working at this company, how much you make per hour or your annual salary, your guaranteed hours per week, and any probation if you are new. This can be done by your direct manager or the company HR department – they will be used to this type of request.
   1. Previous Two Pay Stubs: In addition to the employment letter, you must also have your previous two pay stubs. These must indicate the company name, your name and all tax deductions.
2. Supporting Documents for Additional Income: If you have any other income, such as child support, long-term disability, EI, part-time income, etc., the lender will want to see any and all supporting documentation.
   1. NOTE: If you are divorced or separated and paying child support, it is important to also bring your finalized separation or divorce agreement. In some cases, they may request a statutory declaration from your lawyer.
3. Notice of Assessment from Canada Revenue Agency: Lenders will also want to see your tax assessment for the previous year. If you do not have a copy, you can request one from the CA by mail (4-6 weeks) or you can login to your online CRA account to access it.
   1. Your Previous Years T4: Along with your tax filing and assessment notice, lenders will also want to see your previous years T4 slip to confirm income.
4. 3-Month (90 day) Bank Account History: Lastly, it is important for lenders to see 90 days history of bank statements for any funds that you are using towards the down payment. As saving up for a down payment takes time, there should be no issues providing these documents. If you received the money from the sale of a house or car, or as a gift from your family, you will need proof of that in the form of sales documents or a letter.

The above documents are required for any potential buyer who is a typical, full-time employee. But what if you only work part-time? Or maybe you are self-employed? Here is what you will need:

part-time employee

You will still require all of the above documents (letter of employment, previous pay stubs, supporting documents for any additional income and 90 days of bank history).

However, the difference between a full-time employee and a part-time employee, is that if you only work part-time, you will need to supply THREE years worth of Notice of Assessments, versus just one. You will also need to have been working for at least two years in the same job to use part-time income.

If you have both a full-time and a part-time job, you can use that income too, assuming it has been at least two years.

self-employed

If you are self-employed, the requirements for documents to lenders is slightly different. You will need to provide them:

1. 3-Month (90 day) Bank Account History: Lenders need to see 90 days history of bank statements for any funds that you are using towards the down payment.

1. T1 Generals: Also known as the Income Tax and Benefit Return
2. Statement of Business Activities: This is used to illustrate the business income versus expenses and should include financial statements for your business.
3. Notice of Assessment from Canada Revenue Agency: Similarly to part-time income, if you are self-employed you will also need to provide the previous three years of assessments.
4. If Incorporated: You will need to supply your incorporation license and articles of incorporation.

When it comes to mortgages, preparation is key. By having pre-approval in hand, it can prevent any delays or issues with subject-to-financing clauses in the mortgage agreement. While you can walk into a bank, fill in an application and get a rate for a potential mortgage, this is just a ‘rate hold’ meaning it is a quote on the rate so you can qualify for the same rate later. This is not a pre-approval and does not guarantee financing.

To save yourself the headache down the line, contact a Dominion Lending Centres mortgage broker today to start the pre-approval process! Plus, our services are free to you. Why wait? Get fully pre-approved today to make closing the deal that much faster when you do find that perfect home.

Published by DLC Marketing team.

Baffled by some of the phrases realtors and bankers throw at you? Here are some commonly used—but not always understood—words to describe mortgages:

Amortization Period

This is the number of years it will take to repay the entire mortgage in full and is determined when you are approved. A longer amortization period will result in lower payments but more interest overall as it will take longer to pay off. The typical amortization range is 15 to 30 years.

Closed Mortgage

This is any mortgage where you have agreed to pay the lender for a specified period of time. This means that you cannot pay it off, refinance or renegotiate before the mortgage term ends without incurring a penalty. Depending on the lender, there may be options for accelerated payments but it depends on your particular mortgage contract. While these mortgages tend to be a lot stricter, they can often provide lower interest rates.

Conventional Mortgage

In the case of a conventional mortgage, the loan covers no more than 80% of the purchase price on the property. This means, the buyer has put 20% (or more) down on the property. These mortgages do not require default insurance due to the amount down.

Default

Failure to pay your mortgage on time will result in defaulting on the loan.

Derogs

Short for ‘derogatory’, derogs refers to an overdue account or late payments on your credit report.

Down

Short for down payment. In Canada, the minimum down payment is 5% on any home purchase.

Fixed

A fixed-rate mortgage means you are locked in at the interest rate agreed for a longer length of time.

Flex Down

This refers to a borrowed down payment program, which allows homeowners to “borrow” money for the down payment from a credit card, line of credit or other loan. In this case, the repayment of the loan is included in the debt calculations.

Foreclosure

This refers to the possession of a mortgaged property by the bank or lender if a borrower fails to keep up their mortgage payments.

High-Ratio Mortgage

A high-ratio mortgage is where the buyer has provided a down payment of less than 20% of the purchase price and needs to pay Canada Mortgage and Housing Corp. (CMHC) to insure the mortgage against default.

MIC

Short for a Mortgage Investment Corporation, this is a group of investors who will lend you the money for a mortgage if a traditional lender will not due to unusual circumstances.

Open Mortgage

An open mortgage means you can pay out the balance at any time, without incurring a penalty.

PIT

Principal, interest and taxes— a calculation representing the amount you can afford to pay monthly on your home. Heating costs are often included in this calculation (PITH).

Pull

Also known as a ‘credit check’ or ‘credit inquiry’ a ‘credit pull’ refers to the act of checking a credit report to determine if the borrower is a viable investment prior to approval of the mortgage.

Term

Term is the length of time that a mortgage agreement exists between you and the lender. Rates and payments vary with the length of the term. The most common term is a 5-year, but they can be anywhere from 1 to 10 years. Generally a longer term will come at a higher rate due to the added security.

Trade Lines

This refers to any credit cards, loans, wireless phone accounts, or mortgages that appear on your credit report.

Underwriting

This refers to the process of determining any risks relating to a particular loan and establishing suitable terms and conditions for that loan.

Variable

A variable-rate refers to an interest rate that is adjusted periodically to reflect market conditions.

20/20

A condition that refers to repaying 20% of the mortgage balance OR increasing your payment by 20%, without incurring a penalty.

If you are looking into getting a mortgage don’t be afraid to ask questions! At the end of the day, the mortgage contract has your signature on it and it is important to understand any contract you are signing. Contact a DLC Mortgage Broker today and they would be happy to discuss your situation and answer any questions surrounding mortgage conditions or jargon to ensure the best result for YOU!

Published by DLC Marketing team

As a new homeowner, I’m in the process of discovering all that it takes to maintain the up-keep on my house.  Every step of the way is a learning experience, from re-mounting old light fixtures to finding out that the leaky tap requires more than just a new washer. Some problems you can anticipate–like knowing that the old air conditioner might not work when you fire it up in the summer. But some problems you simply can’t foresee–like when I was sitting in my home office and discovered water leaking in from the top of the window frame.

This was not a good sign, and was an indication that the money I had been setting aside for a kitchen reno would have to be used to replace the windows.

So what’s involved in replacing the windows of a home? And what are the indications that you might need to replace yours?  Let’s take a look at some questions you might have.

New home, old windows

When you purchase a home, you receive a seller’s declaration. This is a document that contains all the information about your home that the previous owners are aware of. Hopefully, it will tell you when the windows were last replaced.

In my case, the declaration did not.

We knew going into the home that the windows would need to be changed sometime in the future, as they are outdated (probably from the 80s) and not very energy efficient.  We didn’t anticipate that they could possibly leak, as there was no indication from the previous owner that they had leaked.

It’s a good idea to pay specific attention to the windows of the home when you make an offer to buy.  It’s one of those things that you usually take as-is, but can be a costly expense to change.

According to moving.com, new windows can increase the sale value of a home, but in order for a return on investment to be made, you need to really upgrade the type of windows and frames you have. This can be a costly and time-consuming endeavour, as with the current COVID situation, there are significant manufacturing delays in the production of windows. While we’ll be putting in more energy-efficient windows at my home, the return on investment will be minimal, as it’s definitely a more functional renovation.

If we had known that the windows had needed replacing before purchasing the house, there’s a good chance we could have negotiated the price down slightly.

Signs your windows might need replacing

There are a number of signs that indicate it’s time to replace your windows.  Let’s take a look at some of them, as highlighted by Mike Holmes:

1. Your windows are weeping: Not that they’re sad, mind you. Rather there’s a buildup of moisture on the inside brought about by poor sealing. This results in air from the inside of your home mixing with air from the outside, and moisture manifesting itself.
2. Your frames are rotten: Older window frames might not have the proper insulation, and they might have rotted as a result. This can lead to air and moisture leaking into your home, which leads to the costly repair of having your windows replaced.
3. Air drafts: Does it feel colder around your windows? Do you get a cool breeze coming in when you don’t want one? These are signs of air drafts, and could indicate your windows need replacing. While you might be able to re-caulk your windows and add weather stripping, this might only be a temporary solution.
4. Single panes: If your windows are older, they might only have single pane glass. These aren’t energy efficient, and also let in a lot of unwanted sound. Replacing your windows will make heating your home cheaper, and give you more peace and quiet.

The cost of replacing windows

 As with most renovations, the cost of replacing your windows can vary greatly.  Factors like the type of window you’re looking to replace, the materials you want your new windows to be made of, and how many layers of panes you want to have all affect the total cost.

In Ontario, the average cost of replacing a window is somewhere between $800-1200, and about $2,500-4,000 for bay or bow windows, plus tax. So for an average house of about 10 regular windows, you’re looking at around $8,000-12,000.

Is there siding on your house where the windows have been leaking? If so, there’s a chance there could be mould or other damage behind it. If this is the case, you’ll want to replace the siding as well. While significantly less than the cost of windows, it’s still an added expense.

You’ll definitely want to get a few quotes from different companies when you’re looking at replacing your windows, as the experience each company has can also affect the price and quality of installation. If you pay top dollar for high quality windows, and have a company install them that doesn’t have a lot of experience, you can end up having an even more expensive problem to deal with in the future, or find that for all the money you spent, the problems persist.

When you’re looking at replacing your windows, really consider all the factors.  While you might love to have a fancy aluminum or beautiful wood frame, these fixtures cost more than your basic white PVC frame. And a well-installed PVC frame can provide just as much protection from the elements as these other options.

Saving money with window replacement

 As mentioned above, if you have old windows, changing them to more energy efficient ones can end up saving you on your monthly bills. By converting old windows, you can potentially save up to 25% on your heating bills.

And while the cost of installing energy efficient windows may seem prohibitive at the start, the good news is that there may be incentives available. It’s worth digging around to see what the active rebates are before starting renovations, and if you have any questions, talk to your renovator to see if they are aware of any incentives you might not be.

Home inspectors can’t see everything

In a competitive housing market, you won’t always have the opportunity to get a home inspection done before you buy a home. This is unfortunate, as a good home inspector can help point out potentially problematic areas in your home-to-be, elements that might help you get a reduction in price. If you are unable to get an inspector in before buying your home, it’s a worthwhile investment to have one come in after the fact, as they can still help identify areas that might be problematic.

But even if you get a home inspector to check out your place, they may not be able to catch everything, and unfortunately, potentially leaky windows are something that can be missed.

If you are able to get a home inspector into your space, request that they check the seals around the windows and ensure that there are the appropriate sills at the base of the frames outside of the house. They can also check for various signs of water damage around the windows of your house.

Similarly, if you’ve had renovations done on your home, or if you’ve had the whole place painted, ask the people who’ve done the work if they noticed any indications of water damage. Damage can be anything from watermarks, rippled paint, or mould growing in the insulation. If signs have been present, you should be prepared to tackle the potentially costly affair of having your windows replaced.

Anticipate the seasons

With the delays in supply chains and manufacturing, it’s important to think ahead. With spring just around the corner, now is the time to take action if you want to change your windows.  Seeing as the delay can be two to three months, it’s going to be summer before they’re installed, which is a perfect time of year to get them replaced.  If you wait, you could find yourself dealing with cold-winds drafting through your windows and possibly moisture creeping in.

Remember to get a few quotes, and take the time to really consider what your window needs are. While you’ll save some money on heating, the price you pay to replace your windows won’t have a profound impact on the resale value of your home.

Published by FCT