Your First Home. What a THRILLING thing that is to think about!!! One of the best parts of our job is helping individuals purchase their first home. We know that the process can seem daunting at first, but we have an in-depth understanding of what steps are required to make the process go smoothly. Follow these and you will be turning the key into your new home before you know it.

1. Find a Fantastic Mortgage Broker
Finding a mortgage broker who can help with your pre-approval process can allow you to determine how much of a home you can really afford. Finding a mortgage broker right off the bat can also give you an advantage over working with your bank:

• Mortgage Brokers don’t work for the bank, they work with you.
• They have access to multiple lenders and are not limited to one single product
• They are an expert in the field. They focus on mortgages and mortgages alone!

2. Get Comfortable With The Numbers
There are two numbers that all first-time homebuyers should keep in mind: 39 and 44. These two numbers can help you budget and determine what you can truly afford when looking to purchase a home. Why 39 and 44? Here’s why:

• A maximum of 39% of your total income can go towards your housing costs. This will cover your mortgage payment, property tax payment, heating costs, and strata fees.
• A maximum of 44% of your total income can go towards total debt payments in addition to your housing costs. This will include ALL housing costs and all debt repayments (credit cards, car loans, student loans, etc.)

Now, here are a few other key numbers that can help you in your house hunting:

3. Know What Your Down Payment Needs to Be
You know the numbers, now let’s look at what you need to know about the down payment itself. First, if you have less than 20% down payment your mortgage will be insured and have insurance premiums added to your mortgage. If you are considering putting the minimum down, that would be 5% if the property is worth $500,000 or less. A down payment of 10% is required for any amount over $500,000. Here’s a quick example of what this looks like:

Purchase Price of $600,000

5% of $500,000                                   $25,000

10% of $100,000                                             $10,000

Total Down Payment:                                   $35,000

4. Take Advantage of The RRSP Home Buyers Plan
The Canadian government’s Home Buyers’ Plan (HBP) allows for first-time home buyers to borrow up to $25,000 from your RRSP for a down payment, tax-free! You are able to combine this with your partner if you are both first time home buyers you can both access the $25,000 from your RRSP for a combined total of $50,000. Certain qualifications do apply for you to use this plan, we have laid them out here for you to review.

5. Don’t Forget About the Closing Costs!
This is one so many people overlook! Closing costs are something that can add up quickly when you are purchasing a home. Here is an approximate breakdown of the funds you will need:

• Legal Costs: $1200
• Title Insurance: $200
• Appraisal: $300
• Property Transfer Tax: Depends on the purchase price

An additional few facts on property tax for you to consider:

This is an approximation of what your closing costs may be, but it is always good to budget for them beforehand.

6. Have your Documents Ready to Roll
Mortgages = paperwork! There are a number of documents that you will need to provide to your mortgage broker. This will vary depending on your employment situation and where your down payment is coming from, but here is a general list you can follow:

• Most Recent paystub
• Letter of Employment
• NOA’s (2 years)
• T4’s (2 years)
• Down payment verification—up to 100 days of transaction history from each bank account holding your down payment funds
• Contract of Purchase and Sale (Your realtor will provide this)
• Property Disclosure Statement (Realtor will provide)
• if you are self-employed you may also have to show:
  o T1 Generals
  o Articles of Incorporation
  o Financial Statements

7. Start Working on Your Credit Score
Yes, your credit score does directly impact your ability to get a mortgage. Lenders want to see that you can responsibly manage credit and debt repayment before loaning you a large sum of money to purchase a home. Your credit score will be a determining factor in the terms and rate associated with your mortgage.

Just what impacts your credit score? Good question! Here are a few things:

• Late payments will lower your score
• Collections, judgements, consumer proposals, bankruptcies
• Exceeded limits on credit cards
• Ideally, you will be able to show a minimum of 2 active and current trade lines
• The longer your trade line is, the better increase in your score!
• Lenders also like to see a minimum of $2,000 limit on your credit cards.

Understanding and using this knowledge can help make your first home buying experience a great one! Once you have gone through the pre-approval process with a mortgage broker the fun part begins! Upon receiving your preapproval, you can begin the house hunting. From there, you can put an offer on your dream home (yay!). Once your offer is accepted, we go through the mortgage process with you and then before you know it, it’s moving day!

This is an exciting time for first-time homebuyers—we enjoy helping our clients go from the very start of the process until they get the keys to their first ever home. And our services don’t stop there! If you have questions or if you’re looking for a pre-approval number, don’t hesitate to reach out to a Dominion Lending Centres mortgage professional!

There is some information floating around about growing marijuana in your home. What most people don’t realize is that this could prevent the sale of your property down the road.

CMHC is Canada’s federally owned mortgage insurer. As of October 25, 2018, their stance on homes that were former grow operations has not changed and reads as follows:

“At this time, CMHC is not making any changes to its mortgage loan insurance policies in relation to the impending legalization of cannabis. CMHC will continue to insure mortgage loans for homeowner residential properties (1-4 units) and multi-unit residential properties (5+ units) where cannabis was previously grown and/or will be legally grown.
We will also monitor the impacts of the Cannabis Act on our mortgage loan insurance activities over the long term. We will also be reminding Approved Lenders that, in cases where property damage has occurred, they are required to disclose this information to CMHC in making the request for mortgage loan insurance and confirm that remedial action has been taken to address any related property damage/alterations,” Courtesy Beverly LePage, Client Relations – CMHC.

However, in my opinion as a mortgage broker, it is the damage to the home from a “typical illegal” grow op that is most important here. When one hears “grow op”, you picture rooms full of plants with lights and irrigation lines with no care taken to prevent irreparable damage to the home.

Please consider the following scenarios.

Tomato Enthusiast #1
Tomato enthusiast #1 absolutely loves tomatoes. He/she finds them relaxing and even fun to share with friends. Tomato enthusiast #1 places dozens of tomato plants in every room of their home with full irrigation and grow lighting. Without proper ventilation, this caused a drastic increase in humidity in the home. If that were to continue, a dangerous mould condition may develop, making the home uninhabitable. In this case, the damage that Tomato enthusiast #1 caused may prevent a mortgage from being placed on the property by the lender and/or insurer.

Tomato Enthusiast #2
Tomato enthusiast #2 also loves his tomatoes but not quite as much as #1. He/she enjoys having a few slices on toast on a Friday evening as a weekly treat. Tomato enthusiast #2 places 4 tomato plants in front of the living room window and daily watered and talked to them pleasantly. Having 4 tomatoes plants in the home was not illegal before October 17th and probably never will be. With proper care, the 4 tomato plants thrived and never caused any damage to the home. A few weeks down the road Tomato enthusiast #2 decided to sell the property. When their trusted realtor arrived to list the home there was no apparent damage caused by any plant or animal that resided there and it was immaculate. It is highly unlikely that the presence of 4 tomato plants would prevent approval by a mortgage lender or insurer.

If you have any questions, contact a Dominion Lending Centres Mortgage Professional near you.

So you’re wanting to buy a new home? That is some very exciting news. The first question: are you prepared?!
We all know big-item purchases are scary. It’s expensive, you are fully committing to this household – there is no turn backing without that pricey consequence. We totally get it.
The ultimate first-step is to do your research. You are going to want to find out the essentials before you start hunting for those pretty houses listed on Pinterest!
Let’s start here.

Credit History 
• How many credit cards do you currently have under your name?
• Do you pay your bills on time?
• How many loans do you currently have?
If you own a credit card or have a loan with an established bank, you have a credit history. This information is then transferred into a financial summary known as a credit report.

Credit Report
Your credit report states these vital pieces of personal information (DO NOT let other people in on your personal finances. This should be a give-in by now!)
• first and last name
• home address
• social security number (SIN)
• credit cards
• loans
• how much money you owe
• whether or not you pay your bills on time
All this ‘credit’ talk is important because it allows lenders to determine IF they will lend you money. Your lender, whoever you choose to go with, will be on your credit situation right away. The sooner you know what is on your credit, the better!
As for your credit score, it’s best to only have it checked once as having multiple credit check by different lenders can cause it to change. Let us know. We’d be happy to help here.

Employment 
It is important to have a steady income and also proof of employment for the last two years. Any changes to your employment have to be explicitly explained. Gathering these documents ahead of time can save headaches later.

Down payment 
In Canada, you need to show a 90-day history of the down payment to prove you have not borrowed the money. We will need to see any movement of that money within the 90 days so its best not to move it around. You are allowed to get a gift from family for the down payment but this money must not be repayable and we will need a letter from that gift giver explaining that!

Consult Your Wish List 
It’s good to know what you want in a home if you can do it realistically. Buying a house for two? Thinking of expanding your family? You need to consider what life will look like down the road before you commit and sign that paper. Nothing would be worse than to move into a house that eventually ends up being too small because a couple of kids came into the picture or in a similar situation those grown-up kids come back home from college, university – you get the picture.
It’s also reasonable to think about factors in your dream home such as maintenance, renovations, the longevity of your stay, etc. Cover all bases, it is way better to be safe than sorry.

Finding a Broker 
Who should you use to find the best mortgage for you? We think a Broker (like us), especially if you’re a first-time home buyer. There are many lenders in Canada and a broker will be able to sort through all your options.

Finding a Realtor
When it comes to a realtor, you want someone reliable. Makes sense right? A couple ways you can find out whether or not a certain realtor is legit is by doing some online research:
• Do they have a website/social media accounts? Go check it out!
• Double-check if their licence is registered and legitimate
• Look up their client feedback/disciplinary comments against them
• Check out their current listings – price range, are they a busy/relaxed business?
• Send them an e-mail with any questions! Do they have the appropriate knowledge?

Feeling better about buying that first Home? That’s exactly what we like to hear. If you have any other questions, call a Dominion Lending Centres mortgage professional today.

If you have a mortgage, you’ll be completing a mortgage renewal when your current term has finished.
While most Canadians spend a lot of time and expend tons of effort shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.

So what is a mortgage renewal?

A mortgage term is a set period of time (which can vary from 1-10 years) where your rate is locked in.

About 3 months before the end of your term, your current lender will suddenly become your best friend showering you with attention and trying to entice you with early renewal offers… And the first offer is never their best. It really shows how they value the relationship.
“Please, please sign here on the dotted line to renew… it’s sooo easy!!”

You have 3 options

1. Sign and send back with no alterations or changes (don’t do it, really I mean it… don’t do it!!)
2. Check the market to make sure you are getting the best rate and renegotiate with your current lender
3. Talk to a mortgage expert and together we can discuss the best options available for your situation

Lenders know that 80% of people will sign their renewal forms because it’s fast, easy and convenient. Banks & lenders push this “take it as it is” tactic to borrowers to ensure they make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get.
Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home… don’t forget!
It is true that signing the renewal document is easy, however, it is in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket.

5 steps to save you money on your mortgage renewal

1. Receive the renewal offer from your current mortgage lender and examine immediately. This gives you enough time to make an informed decision
2. Do your online research about the best current rates for you
3. Call your current lender and negotiate!
4. If your lender will not offer you a better rate then it is time to move your mortgage. You will have to complete a mortgage application and gather applicable documentation just like you did for your original mortgage, but we will help with most of the work!
5. Take a look at your budget and see if you can increase your mortgage payments. This will eventually save you money by paying off your mortgage faster

Your mortgage is one of your biggest expenses. For this reason, it is so important to find the best interest rates and mortgage terms you possibly can.
As you can tell there is a lot to discuss with mortgage renewals. We can help. Contact a Dominion Lending Centres mortgage professional today!