9 May

6 HOME PURCHASE CLOSING COSTS

General

Posted by: Bonnie Hudson

When you purchase your home, there are 6 additional costs to account for. They include:

  • Home Fire and Flood Insurance
  • Title Insurance
  • Legal Fees
  • Adjustments
  • Land Transfer Tax
  • GST

Here’s an overview of what you can expect.

Home and Fire Insurance. Mortgage lenders will require a certificate of fire insurance to be in place by the time you take possession of your home. The amount required is generally at least the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size and extras being insured, as well as the insurance company and the municipality. Home insurance can vary anywhere from $400 per year for condos to $2,000 for large homes.

Title Insurance. This is a one-time fee of about $150 and it protects you against any issues, defects or fraud on your title. Your lawyer or notary helps you purchase this.

Legal Fees. Thirdly, you are required to pay legal fees. Your lawyer or notary will charge you anywhere from $700 to $1,000 to help with your purchase. There are also fees to register your title with the municipalities. All told, you’re looking at around $1,000 to 1,300, after tax.

Adjustments. An adjustment is a cost to you to pay the seller back for prepaying any property tax or condo fees on your behalf. Simply put, if you take possession in the middle of a month, the seller has already paid for the whole month and you must pay the seller back for what they’re not using.

Land transfer tax. Land transfer tax, or property transfer tax (PTT) as it’s known as in British Columbia, is a fee that is charged to you by the province. First-time home buyers are exempt from this fee if they are purchasing a property under $500,000. All home buyers are exempt if they are purchasing a new property under $750,000.

In British Columbia, the PTT is 1% on the first $200,000 of purchase and 2% thereafter. However, if the property being purchased is over $2,000,000, then it is 3% on any value over $2,000,000.

GST. GST is only paid on new construction purchases. GST is 5% on the purchase price. However, there is a partial GST rebate on properties under $450,000.

Please don’t hesitate to contact a Dominion Lending Centres mortgage professional for your home financing and mortgage needs.

 

Written By Eitan Pinsky

4 Apr

The 10 Don’ts of Mortgage Closing

General

Posted by: Bonnie Hudson

The 10 Don’ts of Mortgage ClosingOkay, so here we are… we have worked together to secure financing for your mortgage. You are getting a great rate, favourable terms that meet your mortgage goals, the lender is satisfied with all the supporting documents, we are broker complete, and the only thing left to do is wait for the day the lawyers advance the funds for the mortgage.

Here is a list of things you should NEVER do in the time between your financing complete date (when everything is setup and looks good) and your closing date (the day the lender actually advances funds).

Never make changes to your financial situation without first consulting me. Changes to your financial situation before your mortgage closes could actually cause your mortgage to be declined.

So without delay, here are the 10 Don’ts of Mortgage Closing… inspired by real life situations.

 

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21 Mar

New Credit Reporting And What It Says About You

General

Posted by: Bonnie Hudson

New credit reporting and what it says about you and your spending habits may make all the difference between you buying a home now or later.

When home buyers contact me to apply for a mortgage, I always review their credit report with them along with the rest of their application, before they start looking at homes with a Realtor. If there are any issues with the credit history we can determine the reason, the next course of action and how it will impact financing a purchase.

 

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15 Mar

Top 5 Questions To Ask Your Mortgage Lender Before Signing On The Dotted Line

General

Posted by: Bonnie Hudson

1. How the penalties are calculated if I break my mortgage early? Specifically, ask what rate they use to calculate the “interest rate differential”. Typically, if the lender has “posted rates” they use these to calculate the penalty. If this is the case, the penalty can be 3, 4 or even 5 times higher than a mortgage lender that does not have posted rates and uses them in their early payout penalty calculation. This one question can save you thousands of dollars!

 

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4 Mar

The Shocking Impact of Consumer Debt Payments and How To Overcome This Significant Home Ownership Barrier

General

Posted by: Bonnie Hudson

Savings, market value and government guidelines are obvious obstacles but in my opinion, one topic that doesn’t get discussed in enough detail is consumer debt payments.

First a quick definition: Disposable income, is described as total personal income minus current income taxes. Essentially, your take-home-pay.

Here’s a “live” case study.

 

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3 Feb

All Things Credit Report

General

Posted by: Bonnie Hudson

Any time you apply for credit in the form of a credit card, personal loan, auto loan, or cell phone, the company lending you money will want to access your credit report first. Your credit report is a snapshot of how you have repaid your financial obligations in your past. Lenders will use this information to verify details about you, see your borrowing activities, credit applications and repayment history. Part of this information is used to make up your credit score.

 

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27 Jan

How to Successfully Kill Your Financing Approval

General

Posted by: Bonnie Hudson

Here is where you are currently sitting. You have successfully found your dream home. Negotiated like a true champion and kept your calm through the back and forth with the seller. Provided the endless supply of paperwork required by your lender to meet the financing condition. Set up all the things required for the big day, like scheduling the myriad of people to move your furniture, get your Internet set up and making sure your home is warm and toasty. Then you get a call from your mortgage specialist to the effect of “Houston, we have a problem.” Today we are going to look at the most common ways people unwittingly kill their mortgage approval and leave themselves in the lurch.

 

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14 Jan

Financial Check-Up

General

Posted by: Bonnie Hudson

Welcome to your free financial check-up, discussing 5 key factors to assist you in ensuring you are on the right track to a solid financial future.

Credit

Ensuring you are using credit wisely will pave the way to making sure you have options available to you if or when you need them. One thing we can all do is check our credit report on a regular basis – at least once each year – so you know where you stand and whether your credit score has been compromised in any way, especially through fraud. You can contact Equifax at 1-800-465-7166 or go to the website at www.equifax.ca for more information.

 

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21 Dec

How To Pay Off Debt Faster – 25 Secret Tips Your Banker Doesn’t Want You To Know

General

Posted by: Bonnie Hudson

How To Pay Off Debt Faster – 25 Secret Tips Your Banker Doesn’t Want You To Know
By: Len Anderson

How To Pay Off Debt Faster - 25 Secret Tips Your Banker Doesn't Want You To Know1. Make a double mortgage payment whenever you can. Doing this once a year can shave over 4 years off the mortgage! Sometimes you can skip a payment later on too…if you really, really need to. Try not to. If your payment is $2,000 a month, four years of no payments is $96,000!!

2. Increase frequency of payment. For Example going from monthly to bi-weekly accelerated can shave over three years off your mortgage! $2,000, three years of no payments is $72,000!!

3. Increase your payment. For example a one-time 10% increase can shave 4 years off the mortgage. That’s $96,000! Imagine if you bumped the payment 10% every year from the get go!!! You would be mortgage free in 13 years! Start to finish! Can’t do it? How about 5% every year….you would be mortgage free in 18 years! How about increasing the payment by the amount of your annual raise?

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9 Dec

Obstacles for First Time Home Buyers

General

Posted by: Bonnie Hudson

With mortgage interest rates at historical lows, it is a wonderful time for first time home buyers to take the leap into the market. But there are some considerations and preparations to be made before starting the process.

A higher level of bank scrutiny has come into play now that the governance of CMHC has been shifted to the Office of the Superintendent of Financial Institutions (OSFI). The banks have been jumping through hoops to meet stricter lending policies and so must potential mortgage borrowers.

Mortgage rule changes that came into effect in July 2012 shortened the maximum allowable amortization on mortgages from 30-years down to 25-years. This has made it more difficult for buyers to meet debt-servicing requirements of lenders due to the higher monthly payments of the shorter repayment structure.

 

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