Welcome to my blog! As a mortgage agent, we understand the significance of interest rates when it comes to your mortgage payments. In this article, we will explore how interest rates can impact your monthly payments and offer valuable insights to help you navigate through this aspect of homeownership. So, let’s dive in!

Interest rates play a crucial role in determining the cost of borrowing for your mortgage. They directly affect your monthly mortgage payments, the total amount you’ll pay over the life of the loan, and even your ability to qualify for a mortgage in the first place. Understanding the impact of interest rates is vital for making informed decisions and maximizing your financial well-being.

One of the primary factors that influence interest rates is the overall state of the economy. When the economy is strong and healthy, interest rates tend to rise. Conversely, during economic downturns, rates often decline. This is because lenders adjust rates to reflect the level of risk associated with lending money. Keeping an eye on economic indicators can help you gauge the direction of interest rates.

Timing is crucial when it comes to applying for a mortgage. Interest rates can fluctuate frequently, sometimes even daily. It’s essential to monitor interest rate trends and aim to lock in a rate when it’s favorable. By working closely with a knowledgeable mortgage agent, you can gain access to the latest rate information and make an informed decision about the ideal time to secure your mortgage.

Taking advantage of a low-interest rate environment can have a significant impact on your mortgage payments. Even a slight decrease in interest rates can lead to substantial savings over the life of your loan. For example, on a $300,000 mortgage, a 0.5% decrease in interest rate could save you thousands of dollars in interest payments over a 30-year term. Exploring refinancing options when rates drop can be a smart financial move.

To ensure that you get the best possible interest rate on your mortgage, there are steps you can take. Firstly, maintain a good credit score as it has a direct impact on the interest rate you’ll be offered. Secondly, provide a larger down payment if you can, as this reduces the lender’s risk and may result in a lower interest rate. Lastly, working with an experienced mortgage agent can help you navigate the complexities of the mortgage process and find the most competitive rates.

In conclusion interest rates are a vital aspect of the mortgage process, and understanding their impact on your monthly payments is essential for financial planning. By staying informed about economic indicators, timing your mortgage application strategically, and leveraging a low-interest rate environment, you can save significant amounts of money over the life of your loan. Remember to consult with a trusted mortgage agent who can guide you through the process and help you secure the best possible interest rate for your mortgage.

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Published by the DLC Marketing team.

While not the only factor to look at when choosing a mortgage, interest rates continue to be one of the more prominent decision criteria with any mortgage product. Understanding how mortgage rates are determined and the differences between your typical fixed-rate and variable-rate options can help you make the best decision to suit your needs.

HOW RATES ARE DETERMINED

The  chartered  banks  set  the  prime-lending  rate  (the  rate  they  offer  their best customers). They base their decisions on the Bank of Canada’s overnight rate, because that’s the rate that influences their own borrowing. Approximately  eight  times  per  year,  the  Bank  of  Canada  makes  rate announcements that could affect your mortgage as variable  mortgage  rates  and  lines  of  credit  move  in  conjunction with the prime-lending rate. When it comes to fixed-rate mortgages, banks  use  Government  of  Canada  bonds. In the bond market, interest rates can fluctuate more often and can provide clues on where fixed mortgage rates will go next.

To put it simply: a variable-rate is based off of the current Prime Rate, and can fluctuate depending on the markets. A fixed-rate is typically tied to the world economy where the variable rate is linked to the Canadian economy. When the economy is stable, variable rates will remain low to stimulate buying.

FIXED-RATE VS. VARIABLE-RATE

Fixed-Rate Mortgage

First-time homebuyers and experienced homebuyers typically love the stability of a fixed rate when just entering the mortgage space.

The pros of this type of mortgage are that your payments don’t change throughout the life of the term. However, should the Prime Rate drop, you won’t be able to take advantage of potential interest savings.

Variable-Rate Mortgage

As mentioned, variable-rate mortgages are based on the Prime Rate in Canada. This means that the amount of interest you pay on your mortgage could go up or down, depending on the Prime. When considering a variable-rate mortgage, some individuals will set standard payments (based on the same mortgage at a fixed-rate). This means that, should Prime drop and interest rates lower, they would end up paying more to the principal as opposed to paying interest.

If the rates go up, they simply pay more interest instead of direct to the principal loan.

Other variable-rate mortgage holders will simply allow their payments to drop with Prime Rate decreases, or increase should the rate go up. Depending on your income and financial stability, this could be a great option to take advantage of market fluctuations.

Want to learn more about rates or need mortgage advice? Contact a DLC mortgage expert today!

Published by FCT.

It’s not just Ontario: title fraud cases are on the rise in B.C. as well. Daniela DeTommaso, President of FCT, recently sat with Weekend Mornings with Stirling Faux on 980 CKNW to discuss the rising threat.

“[Fraud has become] so sophisticated,” Daniela explains. “If you were to look at some of the [forged] identification that’s being used, an untrained person would never be able to tell the difference.”

Protecting consumers comes down to two things: detection and coverage. “As a title insurance company, not only are we there to protect you […], but our biggest goal is to prevent these things from ever happening,” says Daniela.

When it comes to protecting their property, many homeowners are used to relying on their home insurance. But it can’t protect them from title or mortgage fraud.

what’s the difference between home insurance and title insurance?

Home insurance covers you for things that can happen to/on your property such as:

• Damage to the home or other structures
• fire and flood
• medical liability
• damaged or stolen items

It protects the parts of your property you can touch—structures and items. But that’s only half of the story.

Title insurance protects the part of your property you can’t touch—your right to own it. That right is called your “title,” and if your title is defective, you can’t leverage your home equity or sell the property. There are many risks title insurance can cover, but one of the most damaging is the risk of someone stealing your right to ownership.

TITLE FRAUD

Title fraud is when someone impersonates a property’s owner, then either takes equity out or sells it. If someone registers a fraudulent mortgage on your property, it can cost tens of thousands in legal fees to repair your title, and you can’t sell or leverage your home until you do.

In B.C., if your home is fraudulently sold to an innocent buyer, they get to keep it. Without title insurance, you could lose your home and your equity, with no way to recoup your loss. Title fraud is a real danger, and home insurance can’t protect you from it.

how title insurance protects homeowners and homebuyers

A title insurance policy can cover your losses from losing the insured property, and also carries with it a duty to defend. “We have to pay any legal fees incurred in the course of trying to rectify the problem,” says Daniela. “We are someone to hold your hand through that process, and […] indemnify you against any [covered] loss or damage.”

how do i know if i have title insurance?

Most people with title insurance purchased it during closing. It’s a one-time premium, so there aren’t monthly insurance payments to remind you of your policy. Consult your closing documents and check for an owner’s title insurance policy—you’ll likely see a lender’s title policy, which unfortunately isn’t the same thing.

If you don’t find an owner’s policy, you can reach out to the title insurer who provided your lender policy. They’ll be able to tell you if you have owner’s coverage.

IF I DIDN’T BUY TITLE INSURANCE DURING CLOSING, IS IT TOO LATE?

No, it’s not too late. You can purchase title insurance no matter how long you’ve owned your home. For a one-time premium, you get coverage that protects you for as long as you have an interest in the property. It can also transfer to your spouse or heirs if they take ownership.

Your home is your biggest investment—don’t leave it at risk. Protect yourself now with an existing homeowner’s title insurance policy from FCT.

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

®Registered Trademark of First American Financial Corporation.

Published by HomeEquity Bank.

Do you need help to meet your retirement income needs? With rising inflation, accessing sufficient cashflow for your desired lifestyle can be challenging. However, with over 70% of Canadians owning their homes, tapping into home equity can be the cashflow solution you need.

Tapping into Home Equity

If you want to remain in your current home, a home equity line of credit (HELOC) and a reverse mortgage are two of the most popular ways to access your home equity.

Take out a HELOC. HELOC lenders typically allow you to access up to 65% of the value of your home. You can borrow money as needed (based on an agreed-upon amount) and are only required to make minimum monthly interest payments on the amount taken out. Unlike traditional mortgages, there is no obligation to make scheduled payments towards the line of credit, and you have the freedom to repay the line of credit at your convenience.

Get a reverse mortgage. Another way to access the equity in your home is through a reverse mortgage. If you’re a Canadian aged 55 or better, the CHIP Reverse Mortgage by HomeEquity Bank allows you to access up to 55% of your home’s value and turn it into tax-free cash. There are no monthly mortgage payments while you live in the home; the full amount only becomes due when you move or sell your home. You can receive the funds as a lump sum or in regular monthly deposits. You can use the cash for any financial needs, including health care costs, home renos, debt consolidation or lifestyle expenses.

Advantages of a reverse mortgage

One of the biggest advantages of the CHIP Reverse Mortgage is that there are no monthly payments, but there are many more! Here are some of the other benefits of the CHIP Reverse Mortgage:

• Simplified underwriting. The proceeds of the CHIP Reverse Mortgage are not based on income but on your age and the value of your residence.
• No need to requalify. A regular HELOC from a bank may subject the borrower to continuous credit score checks over time, affecting the ability to access a HELOC when needed.
• Spousal impact. The death of a spouse does not affect a reverse mortgage, unlike a HELOC, which may trigger the bank to review the credit score and income of the surviving spouse.
• Rate stability. For fixed-rate terms, the reverse mortgage rate remains locked for the term, while HELOC rates fluctuate with the Bank of Canada’s prime rate, potentially increasing borrowing costs.

Contact your Dominion Lending Centres mortgage expert to learn how the CHIP Reverse Mortgage can help you boost your retirement income.

Published by DLC Marketing team.

Whether you’ve made an offer on a home already or are still in the process of looking, you already understand that buying a home is likely the largest investment you’ll ever make.

When it comes to your mortgage application, there are a few things that you should avoid doing while you’re waiting for approval – such as making large purchases (i.e. a new car), applying for new credit, pulling additional credit reports, etc. Another issue that can come up is the loss of your job.

What you can afford to qualify for in relation to your mortgage depends on your income. As a result, the sudden loss of employment can be quite detrimental to your efforts. So, what do you do?

Should You Continue With Your Mortgage Application?

If you’ve already qualified for a mortgage, but your employment circumstances have changed, your first step is to disclose this to your lender. They will move to verify your income prior to closing and, if they have not been told in advance, it may be considered fraud as your application income and closing income would not match.

In some cases, the loss of your job may not affect your mortgage. Some examples include:

• You secure a new job right away in the same field as previously. Keep in mind, you will still need to requalify. However, if your new job requires a 3-month probationary period then you may not be approved.
• If you have a co-signer on the mortgage who earns enough income to qualify for the value on their own. However, be sure your co-signer is aware of your employment situation.
• If you have additional sources of income such as income from retirement, investments, rentals or even child support they may be considered, depending on the lender.

Can You Use Unemployment Income to Apply for a Mortgage?

Typically this is not a suitable source of income to qualify for a mortgage. In rare cases, individuals with seasonal or cyclical jobs who rely on unemployment income for a portion of the year may be considered. However, you would be asked to provide a two-year cycle of employment followed by Employment Insurance benefits.

What Happens During Furlough?

If you did not lose your job entirely but have instead been furloughed or temporarily laid off, your lender may take a wait-and-see approach to your mortgage application. You would be required to provide a letter from your employer with a return-to-work date on it in this situation. However, if you don’t return to work before the closing date, your lender may be required to cancel the application for now with resubmitting as an option in the future.

Have You Talked to Your Mortgage Professional?

Regardless of the reason for the change in your employment situation, one of the most important things you can do is contact a Dominion Lending Centres mortgage expert directly to discuss your situation. They can look at all the options for you and help with finding a solution that best suits you.

Published by DLC Marketing team.

Financial wellness is fast becoming the latest buzzword as soaring inflation and interest rates pile the pressure on Canadians. There is a strong connection between mental health and financial health, and financial stress is taking a heavy toll. So, what exactly does it mean to be “financially well”?

Financial wellness is described as a state of well-being where an individual or a household has achieved financial stability and is able to meet their current and future financial obligations without undue stress. Financial wellness is not about being rich, having a certain amount of net worth, nor achieving a specific financial goal. Rather, it is about having a sense of security and confidence in your financial capability and being able to manage financial issues, challenges and opportunities as they arise over time.

Financial wellbeing is a function of many different factors. Income is obviously a critical element, but it also depends heavily on how well we are able to manage our money. These tasks include budgeting, managing debt, and investing and planning our retirement. The degree to which we are able to handle these tasks successfully depends on our level of personal financial literacy and our ability to make informed decisions, solve financial problems, and manage financial risk.

The heightened stress and anxiety cause by poor financial wellness has significant effects on many aspects of our life including poor job performance and relationship issues.

How do you measure financial wellness?

Financial wellness can be measured in a number of ways, but it is often a feeling rather than some sort of tangible number. A financial health assessment is a comprehensive evaluation that involves reviewing income, expenses, debt, savings, investments, insurance coverage, and other financial assets and liabilities. It identifies areas of strength and weakness and provide insights into how to improve overall financial well-being.

A financial stress tests involve evaluating an individual’s or household’s ability to withstand financial shocks or unexpected events, such as a job loss or medical emergency. Financial stress tests can help identify potential vulnerabilities in one’s financial situation and provide insights into how to build financial resilience.

Financial behavior analysis involves examining an individual’s or household’s financial behavior and decision-making processes. It can help identify patterns of behavior that may be contributing to financial stress or instability, such as overspending or not saving enough.

Overall, measuring financial wellness is a complex process that requires taking into account multiple factors and indicators. Different methods may be appropriate for different individuals or households, depending on their specific financial circumstances and goals.

How can I improve my financial wellness?

There are plenty of options for improving your financial wellness and most of them revolve around bettering your financial literacy skills to effectively tackle expenses, use credit wisely, manage debt, save money, and build long-term wealth and security through investing. Working with a financial coach or financial planner can also provide the knowledge and support needed to achieve your financial goals.

In addition to individual actions, there are also broader solutions that can support financial wellness at the societal level. These may include policies that promote income equality, affordable housing, and access to financial services, as well as financial education in schools and employee financial wellness programs.

2023 is shaping up to be another tough year financially for Canadians and financial wellness will continue to be elusive, especially if your financial literacy is lacking. The good news is there are a lot of resources available and many of them are free or low-cost. The largest hurdle for most of us is willpower and maintaining our motivation — achieving financial wellness is not a sprint. It can be a time-consuming, slow process and you may not see the results from your efforts until many months or many years down the road!

Published by DLC Marketing Team.

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free as well as how much interest you pay over the lifetime of your mortgage (longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments).

Let’s start by looking at the mortgage industry benchmark amortization period. This is typically a 25-year period and is the standard that is used by majority of lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators.

While this is the standard, it is not the only option when it comes to your mortgage amortization. In fact, mortgage amortizations can be as short as 5-years and as long as 35-years!

As mentioned,  opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time-frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

When it comes to choosing a longer amortization period, there are definitely still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period of time, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Your mortgage professional will be able to help you choose the amortization that best suits your unique requirements and ensures you have adequate cash flow. However, it is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You are able to shorten or lengthen your amortization, as well as consider making extra payments on your mortgage (if you set up pre-payment options), at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5 or 10 years depending on your mortgage product). During renewal is a great time to review your amortization and payment schedules or make changes if they are no longer working for you.

If you have any questions or are looking to get started on purchasing a home, don’t hesitate to reach out to a DLC mortgage professional for expert advice!

When navigating the mortgage market, it’s essential you take the time to find the right professional to assist you. Here are some key strategies to help you identify a reliable and trustworthy mortgage broker:

1. Conduct Thorough Research: Take the time to research different mortgage brokers in your area. Look for their credentials, experience, and any reviews or testimonials from past clients. This information can provide insights into their professionalism and track record.
2. Seek Recommendations: Ask friends, family, or colleagues who have recently obtained a mortgage for recommendations. Personal referrals can be valuable as they come from trusted sources who have firsthand experience with a particular mortgage broker.
3. Evaluate Their Expertise: Assess the broker’s knowledge and expertise in the mortgage industry. Look for brokers who stay updated on market trends, mortgage products, and relevant regulations. This expertise ensures they can provide you with accurate and up-to-date advice.
4. Consider Their Range of Lenders: A reputable mortgage broker should have access to a wide range of lenders. This allows them to offer you multiple options and find the best mortgage product that suits your specific needs and financial situation.
5. Transparent Communication: Look for a broker who communicates clearly and transparently. They should be willing to explain complex mortgage terms and conditions in a way that you understand. Avoid brokers who use high-pressure sales tactics or make unrealistic promises.
6. Ask Questions: Don’t hesitate to ask questions to gauge a broker’s knowledge and responsiveness. A trustworthy broker will take the time to understand your needs, answer your questions, and provide personalized advice.
7. Check for Licensing and Associations: Ensure that the mortgage broker is licensed and registered with the appropriate regulatory body in your province or territory. Membership in professional associations, such as the Canadian Mortgage Brokers Association (CMBA), can also be a positive sign of credibility.
8. Trust Your Instincts: Ultimately, trust your instincts when choosing a mortgage broker. If something feels off or you’re uncomfortable with the broker’s approach, it’s better to seek alternatives.

By following these strategies and investing time in your research, you can see through mortgage marketing tactics and find a reputable mortgage broker who will guide you through the process with integrity, professionalism, and your best interests in mind.

Introduction: In the Canadian mortgage market, borrowers have various options to choose from, including variable mortgages. A variable mortgage, also known as a variable rate mortgage (VRM), offers flexibility and the potential for cost savings. In this blog post, we’ll explore the different types of variable mortgages available in Canada, giving you a better understanding of the options at your disposal.

1. Prime Rate-Based Variable Mortgage: The most common type of variable mortgage in Canada is tied to the lender’s prime rate. The interest rate on these mortgages fluctuates based on changes in the prime rate, which is influenced by the Bank of Canada’s overnight lending rate. Borrowers typically pay a discount or premium to the prime rate, such as prime minus 0.50%.
2. Adjustable Rate Mortgage (ARM): An adjustable rate mortgage, similar to a prime rate-based variable mortgage, is tied to the lender’s prime rate. However, instead of a fixed discount or premium, the interest rate adjusts periodically based on market conditions. This adjustment can occur annually, semi-annually, or even monthly, depending on the terms of the mortgage.
3. Adjustable Payment Mortgage: In an adjustable payment mortgage, the interest rate remains variable, but the payment amount stays fixed for a specified period. This allows borrowers to have consistent monthly payments, providing them with stability during that period. However, the outstanding interest may vary, resulting in adjustments to the principal portion of the payment.

Conclusion: Variable mortgages offer borrowers flexibility and the potential for cost savings in a changing interest rate environment. Whether you opt for a prime rate-based variable mortgage, an adjustable rate mortgage, an adjustable payment mortgage, or a collateral charge mortgage, it’s important to carefully consider your financial goals, risk tolerance, and future plans. Consult with a mortgage professional to explore these options in more detail and determine which type of variable mortgage aligns best with your needs. Remember, each individual’s circumstances are unique, so it’s crucial to choose a mortgage that suits your specific requirements.

Written by Chat-GPT

Published by DLC Marketing team.

When it comes to getting a mortgage, there are a few things you can do in advance to make the mortgage process easier!

getting pre-qualified

The purpose of mortgage pre-qualification is to help you get a general idea of what you can afford when shopping for your new home.

Pre-qualification will take your own assessment of your financial status and allow you to come up with a budget for a home, as well as what you can afford for monthly payments.

Download the My Mortgage Toolbox app (available on the iStore or Google Play) to get pre-qualified today in under 60 seconds! Plus, you can get an idea of your monthly mortgage payments and compare various payment schedules.

getting pre-approved

While getting pre-qualified can give you a ballpark estimate on what you can afford, pre-approval means that a lender has stated (in writing) that you do qualify for a mortgage and what amount, based on submitted documentation of your current income and credit history.

A pre-approval usually specifies a term, interest rate and mortgage amount and is typically valid for a brief period of time, assuming various conditions are met.

There are a few benefits to pre-approval including:

1. It confirms the maximum amount you can afford to spend
2. It can secure you an interest rate for 90-120 while you shop for your new home
3. It lets the seller know that securing financing should not be an issue. This is extremely important for competitive markets where lots of offers may be coming in.

Keep in mind, once you get your pre-approval, you will want to make sure not to jeopardize it. Until your mortgage application and sale is completed, be sure you don’t quit or change jobs, buy a new car or trade up, transfer large sums of money between bank accounts, leave your bills unpaid or open up new credit cards. You do not want your financial or employment details to change at all until you have closed on the new mortgage.

Reach out derek@mortagge-wealth.ca to get started today!