Purchases including New to Canada
Purchases… our favorite type of Mortgage transaction! There is nothing more exciting to see than a Client who is purchasing their first new Home.
You may have lots of questions, but we are here to answer every single one of them, no matter what they are. There is a lot to go with buying a new Home, and unless you are on the Mortgage side of the fence, it can all seem overwhelming and convoluted. Our job is to clearly explain all the components until you feel comfortable with the answers. This is how we know we are doing our job right!
Worry Free Mortgage also has a great deal of experience helping new to Canada families get into their first Home.
If you are new to Canada, you can still obtain a mortgage with as little as 5% for your down payment.
We work with multiple Lenders that have specific Mortgage products that cater to this specifically, and the steps are no different than someone who is buying their second Home. The only variance is a few of the required documents will be in a different format.
Here are a couple main highlights for a New to Canada Mortgage Product:
- There is no minimum period of residency required for some new to Canada programs.
- We can utilize ‘alternative credit’ for new to Canada files where credit history may not be well established. We can get you a mortgage even if you are not a permanent resident, provided you have a valid work permit and 10% for your down payment. Some established credit will also be needed in this type of situation.
Even if you aren’t in the position to purchase a Home today, our Mortgage Agents can work with you to build a plan to work towards Home ownership. There is ABSOLUTELY NO COST TO YOU for this either, and we are happy to work along side you to make this dream become a reality.
Purchase of an Investment Home
Investment Property also known as a Rental have been used by many to grow wealth and create a nest egg for future retirement goals.
Our mortgage associates can:
- Obtain up to 80% financing on rental properties when you are purchasing with the intent of renting them.
- Utilize the net cash flow from the investor’s entire property portfolio as qualifying income
- Help you keep your existing Home as a rental property when you are ready to move into a different home.
If you are thinking about purchasing a rental property and would like one of our mortgage associates to work with you, we would be more than happy to schedule a time to go over the components in more detail!
Purchase of a Vacation/Second Home
For as little as 5% down, our Mortgage Agents can assist you in the purchase of your vacation dream home or a second home for your kids at college, or for your ageing parents.
What is a second home, and how can I purchase one for 5% down?
A second home is a property that will be used either for personal recreation purposes (like a lake cottage) or for an immediate family member to live in.
If the intended purpose of the property is for an immediate family member to reside in it, then the minimum Down Payment requirement is only 5% Down.
There are a handful of Lenders who are easier to work with when the purchase is being structured like this. Let us help guide you through the process and making purchasing another Property as easy as buying your first one.
Switch – move Mortgage to another Lender
A ‘Switch’ is also called a ‘Transfer.’ This is where we are moving the same Mortgage Balance with the same Amortization Period to a different Lender who is offering a better Interest Rate than your current Lender is offering.
Sometimes, depending on the Lender, their Renewal Rate options might not be as competitive as other Lenders. We always suggest giving your current Lender one last opportunity to fight for your business.
Usually, once they know that you have spoken with a Mortgage Agent, they are a bit more willing to negotiate on the Interest Rate they were originally offering you.
The earliest we can lock in Interest Rates for a Switch is 120 days from your Maturity Date. This is a fair amount of time to weigh the pros and the cons and make sure that you are going to secure the lowest Interest Rate available.
More often than not, the new Lender will absorb all the costs associated with bringing the Mortgage to them. If there are any fees that might be incurred, this is discussed with you in advance before start the Mortgage Process.
Life happens. Children get married, a vehicle breaks down, you now need that extra room in the basement, someone loses an employment position, and of course, we all know that braces are expensive!
Debts have a funny way of slowly creeping up until one day, you start calculating how much Interest you are paying each month of those high balances, and that is it!
Utilizing the Equity in your Home means that you could clear those high balances while not increasing your Monthly Fixed costs and secure a Low Interest Rate while doing it.
We are more than happy to run the numbers to see if Refinancing would make sense. This way, you have all the figures to review in advance and are making the best-informed decision based on tangible numbers! You can potentially save THOUSANDS of dollars refinancing out of a higher interest rate Mortgage into a lower interest rate Mortgage.
A few details on Refinance transactions:
- There are some expenses when Refinancing. The standard ones are an Appraisal Report through one of the Lender’s approved Appraisal Companies to verify the current Market Value (Approx. $350.00 plus GST) and Legal Fees (These can vary depending on the Mortgage Amount).
- We can only access up to 80% of the current Home Value based on the Appraisal Report.
- Consolidating Debt is one of the main reasons Clients decide to Refinance their Mortgage. You can potentially save THOUSANDS of dollars by Refinancing and rolling all of the balances that carry 18.99% Interest Rates into 2.94% Mortgage. This could completely change a household’s cash flow each month, where there is now excess funds to use for Savings and future planning.
Reverse Mortgages are a completely different mortgage solution for Canadians that are 55 or older.
Benefits of reverse mortgages:
- A reverse mortgage allows you to access and utilize the Equity you have built up in your Home.
- Many seniors cannot qualify for standard mortgages due to their income no longer being as high as when they were working. Reverse mortgages DO NOT use income to qualify.
- You maintain full ownership of your Home.
- Reverse Mortgages never require you to re-qualify after you enter the product. Mortgages can require you to ‘re-qualify’ at maturity, which can be difficult for fixed income retirees.
- There are no interest or principal payments for as long as you or your spouse live in the house.
- You can even have your house write you a cheque every month to improve your monthly cash flow.
- You qualify based on the Equity in your Home.
There are two providers of reverse Mortgages in Canada, and your Worry Free Mortgage Agent has access to both of them.
Home equity Line of Credit (HELOC)
A HELOC is very different from a Mortgage.
The first major difference is that you are not required to make principle payments on the loan.
You are only required to make interest payments. This generates a lower monthly obligation, but the balance does not decrease if you only make the minimum required payment.
The second major difference is that a HELOC is ‘re-advanceable’. If you pay your HELOC down below the limit, you can access that money again in the future if you need it.
A family’s Home is usually their most valuable asset. Having access to the Equity in the Home can often be very helpful when a homeowner needs to access a significant amount of money for a significant expense.
A pure HELOC can only go up to 65% of the value of your Home, but a HELOC mortgage combo can go as high as 80% of the value of your Home.
People will often use HELOCS to cover education costs, medical bills or home improvements. HELOCS are also often used for investments.
If you have questions about obtaining a HELOC, a Worry Free Mortgage Agent would be happy to discuss a HELOC in more detail with you.