Congratulations you have made it through one of the toughest financial times in your life. It feels good to have this under control and know there is a light at the end of the tunnel. I too have been down this road in 1998 and now I educate the RIGHT way to have a plan.

There is no shame in going through either a consumer proposal or bankruptcy. Life throws wrenches into our well laid out plans. This is why we have these financial resources to get us back on our feet.  What is most important is that we don’t make the same mistakes again, really get to know how the mortgage and credit world works and use a mortgage planner along with your trustee or debt counsellor to have a plan of action!

There are no quick fixes or programs to get you back on track! Don’t get sold on some “swindler” taking advantage of your situation. There is a company out there that will loan you $2,500 that you pay back over 2 years and they report it to bureau for you. The cost – $900! That’s crazy and completely unnecessary.

Here are the Coles notes on what you need to know for those in consumer proposal. Remember, every situation is unique, so always have an experienced broker work with you:

• You can refinance your home when in a consumer proposal and pay it out. You need more than 20% equity to do this. The sooner you pay it off, the faster it comes off your credit bureau.

• If you are going with an INSURED mortgage (ie. 5-20% down) then you must be discharged from consumer proposal for two years and your credit has to be re-established.

• Most lenders want the consumer proposal paid in full prior to mortgage approval. Very few will look your deal while in proposal.

• Area dependent – Fort Mac or small rural communities are harder to get approvals.

• We can use a bundled product strategy with a 1st mortgage to 80% LTV and 2nd mortgage to 90% to get your approval. Expensive, but works for many clients.

• You want to plan to have some savings that are more than just your down payment if you are buying. Don’t be house rich and cash poor.

• Sometimes we can use secondary credit like your car insurance, cell phone, or your rental payments to a landlord. If we can prove good repayment for the last couple years, we should be able to take it to a bank.

• Also, you really need to ensure that, at the three year mark after you are done, that your consumer proposal is removed from credit bureau. I have seen someone refinance 2 years into their 5 year proposal and pay it out and forget to remove it from the bureau a  year later, so it keeps hurting your score and years of damage for no reason.

How long does a consumer proposal stay on a credit report?

Once you enter into a consumer proposal, it will start reporting on both Equifax and TransUnion credit reports within 30 days. Depending on your consumer proposal agreement with creditors, you will be making payments in a consumer proposal generally between three to five years.

Consumer Proposal will stay on your credit report for 3 years from the date you are discharged (made your last payment) regardless if you are looking at your Equifax or TransUnion report.

Where do I start in building my credit again?

You can start rebuilding your credit as soon as you file your proposal. Bankruptcy is a bit different. You need to aim for TWO credit cards, open for TWO years, with an eventual available credit of $2500 each.  Just get TWO that start reporting.

1. Apply for a secured credit card with HomeTrust Visa. You give them $500, they give you a credit card.

2. Affirm Financial will approve $1000 credit card UNSECURED to those that are in consumer proposal.

3. Scotia No Fee Credit Card

4. TD Secured Credit Card

5. Capital One Secured Credit Card

6. Peoples Trust Secured Credit Card

Your credit and what have you can do to make it better:

They are lending YOU money, so a good broker will need to explain your situation, who you are, why you had issues and what you have done to improve your situation. This is called the 5 C’s of credit. This is a method used by lenders to determine the credit worthiness of potential borrowers. The system weighs five characteristics of the borrower, attempting to gauge the chance of default or you being a chronic mismanager of debts.

1. Character – When lenders evaluate character, they look at stability — for example, how long you’ve lived at your current address, how long you’ve been in your current job, and whether you have a good record of paying your bills on time and in full. If you want a loan for your business, the lender may consider your experience and track record in your business and industry to evaluate how trustworthy you are to repay.

2. Capacity – refers to considering your other debts and expenses when determining your ability to repay the loan. Creditors evaluate your debt-to-income ratio, that is, how much you owe compared to how much you earn. The lower your ratio, the more confident creditors will be in your capacity to repay the money you borrow.

3. Capital – refers to your net worth — the value of your assets minus your liabilities. In simple terms, how much you own (for example, car, real estate, cash, and investments) minus how much you owe.

4. Collateral – refers to any asset of a borrower (for example, a home) that a lender has a right to take ownership of and use to pay the debt if the borrower is unable to make the loan payments as agreed. Some lenders may require a guarantee in addition to collateral. A guarantee means that another person signs a document promising to repay the loan if you can’t.

5. Conditions – Lenders consider a number of outside circumstances that may affect the borrower’s financial situation and ability to repay, for example what’s happening in the local economy. If the borrower is a business, the lender may evaluate the financial health of the borrower’s industry, their local market, and competition.

It all starts with the planning the day you decide to file for a consumer proposal. If you are finding you are starting to fall behind in payments or considering a consumer proposal call us at Dominion Lending Centres –we may be able to help.

Courtesy of Kiki Berg, AMP – DLC Hilltop Financial 

As my client is telling me the reason for his credit woes, I just can’t help but think, “why are you here”? and more importantly “why are you wearing overalls”? Then for a moment I thought I might have said that in my outside voice! But he continues to talk and I realize that it was still my inside voice. Close call.

I have been a mortgage broker for 14 years – the last few years with Dominion Lending Centres. And just when I think I have seen it all, life smacks me in the head and says “snap out of it” there’s more to come.

In a profession where there is a lot of contact with the public, you are bound to find the odd duck or hundred. My colleagues used to joke that I had radar that attracted all the crazies to me, full moon or not.

Over the years I have come across situations with clients that, had I not lived it, I would have never believed it. I often take on the role of mortgage broker, counsellor, lawyer (with proper waivers), matchmaker, realtor, SPCA and so forth. Never have I had a job in which I have worn so many hats and thoroughly enjoyed each profession!

My fellow brokers I am sure can relate to some of the situations and throughout the years I have made notes of some of the funnier events that have come my way and decided to take this opportunity to share them; they are good for a laugh and in this business of stress, deadlines and rules, we all need a good laugh!

I will start with my client Frank (all names have been changed to protect the innocent. Ok maybe the guilty too). Frank was what I fondly referred to as a “biker dude”. He looked like a bad ass, dressed like one and smelled like one. Frank came to see me one day. He was dressed in leather chaps and biker apparel straight out of a Sons of Anarchy episode.

Frank came well prepared for the meeting, that is he was awake and sober. Well maybe awake. We discussed his desire to get a house legitimately…Is there any other way? I ended up telling Frank some of the documents I would need to see if I could help him. He left and I thought that’s the end of Frank. Two days later he has an appointment and as we sit in my office, he produces the documents that I had requested. I have to be honest, if he wasn’t there I may have smelled the Notice of Assessments to see if they had been freshly printed….from the CRA website. Of course that is what I meant!

Frank had good credit and a down payment but let’s just say his income was a little shy of what was needed to qualify for the loan and for that matter, so was his down payment. We discussed things a bit more and I told him I could likely help him if he could come up with some more money for the down payment. See in those days, equity deals were so easy and there was hardly any scrutiny of income, etc. Ah the good old days… But I digress.

I tell Frank “Listen, I am sure we can get you into a house. But we need a little bit more money down”.

He says “How much more”? And I say “Like about another ten percent”.

He sits there looking at me scratching his beard and I wonder if he is contemplating beating me up or what. I mean I am just the messenger. So I take a deep breath and jokingly say, “Frank can’t you go home and dig up a Tupperware container full of money?” He looks at me and says, “Let me see”.

Well within an hour he calls me and says I got the money, I’m going to put in an offer. Needless to say, Frank got into his house and I soon became the go-to-gal for the biker community.

A few months later, Frank was in his new house and he came by the office to thank me. He brought me a gift. He had been to a “convention” and thought of me and brought me a t-shirt which I proudly wore, at night, in the dark and only in my bedroom with all shades drawn. But I still felt kind of like a bad ass because I knew this t shirt was not something you could buy in a gift shop.

Frank continued to drop in just for visits and give me the occasional shirt. Over the years I saw Frank about town. He always gave me a bear hug (he was as big as a bear) and got me a coffee if we ended up in the same coffee shop. Frank became a good referral source. Without a doubt he was the sweetest biker dude I ever had the pleasure of working with. To this day I still have his t-shirts. But I still only wear them to bed in the unlikely event a rival gang sees me and decides to talk to me about my colours!

Courtesy of Maria Kyle, AMP – DLC Vintage Financial

Short answer: the longest possible amortization you can get!

However, the goal is to get the longest amortization possible, but then increase the payment or make lump sum payments to move the amortization to the lowest possible and therefore be mortgage free faster. I will explain more later.

Amortization is the total authorized repayment period of a mortgage. If you have a hi-ratio mortgage, by law – government guidelines, the maximum is 25 years. However, if you have a conventional mortgage or, in other words, at least 20% down or 20% equity, then you can amortize up to 30 years and in some cases with some of our lending partners, 35 years. Question: Why would you want a longer amortization? Well qualifying is based upon the payment. So it is easier to qualify with a longer amortization as a longer time frame means a lower payment. For example, you could qualify at 30 years amortization, but elect to pay bi-weekly accelerated based upon a 25 year amortization (an effective amortization of 22 years). The benefit of this strategy is that you can go back to the original amortization, less time elapsed, should you ever need to.

Let’s look at an example:

Mortgage of $300,000. Payment of $1,200/month based on a 30 year amortization. However, you elect to pay bi-weekly accelerated based on a 25 year amortization (effectively an amortization of 22 years – amortization is a function of payment). So bi-weekly is $680. However, 10 years into the mortgage you suffer a set back and are temporarily out of work. Only your spouse continues to work. You can approach the lender to “re-amortize” your mortgage, meaning 30 years less time elapsed, so effectively 20 years. However, in the 10 years that have elapsed, you have been making accelerated payments so your mortgage balance is lower than it would have been otherwise. The result is that your re-amortized payment is $1,000/month! Effectively built-in payment reduction insurance at no cost! Note: you could also use this strategy if rates were to rise substantially and you want to lower your payment!

Another reason to opt for longer amortization: Rentals, longer amortization means better cash flow! With a rental property, cash flow is King! If it pays for itself every month and the interest is tax deductible, who cares how long it takes to repay the mortgage? Every month it is building equity and eventually you will have enough equity you can refinance it to get a down payment to buy the next property and build up your rental property portfolio!

As always, get independent professional advice on which strategy and options are right for you. Your local independent Dominion Lending Centres Mortgage Broker can help.

Courtesy of Len Anderson, AMP – DLC Origin

suc-cess: the achievement of something desired, planned or attempted; accomplishment of an aim or purpose.

To be a Mortgage Expert producing volume in the Top 75 in Canada is a massive accomplishment. One that takes extreme dedication and hard work, something that I strive to achieve. While building a secure and stable mortgage practice foundation, my ultimate goal is to help each and every client with their specific scenario; every mortgage file is completely different from the previous one. Lost in the shuffle of numbers and mortgage applications are real life stories.

The Story

A few months back I had the fortunate pleasure of receiving a referral from a local Realtor. He had called to discuss and forward me some basic background information, but had asked me to call the client ASAP. Right away I recognized this was an opportunity to help someone better their current life. Long story short (details to follow), the client had been working with one of Canada’s top bank brands and due to some credit blemishes was not able to proceed with financing.

Without delay and armed with some basic ‘intel’ I called the client to discuss her unique situation. As she was providing extreme details about her credit I immediately knew which lender we would target to give her a second chance. Her credit had some bumps and bruises but she was determined to re-build it. Here’s an overview of what had contributed to a lackluster credit report with an overall beacon score of 596:

• Two separate collections; one from BC Hydro that was missed upon a move and the other was an unpaid collection from 2012 that was fraudulently added to her credit profile.
• Cared and assisted her grandmother through a health issue which meant taking time off of work, this subsequently meant some of her bills started compounding.

After the passing of her grandmother, my client’s main goal was to rebuild a safe, comfortable home for her daughter. The subject property ended up only being blocks away from her grandfather, which would allow them to be closer to him again which was another important step for them in the healing process.

During the underwriting and lender approval process I was optimistic, but at the very same time I was extremely honest about how her story could be perceived. The client had had some unfortunate circumstances that were out of her control but with my assistance I was confident that we would be able to overcome the ‘black-marks’ on her credit report and structure the application accordingly for us to obtain the financing she needed to buy her first home. By addressing all the possible questions upfront, we were able to mitigate the lender’s risk.

At the end of the process, we achieved what we had set out to do, obtain financing to purchase a piece of real estate. With initial contact made mid December 2014, after 76 emails and numerous telephone conversations, the client had received an accepted offer to purchase a townhome at the beginning of February 2015 and finally took possession in the middle of March 2015. I’m happy to say that this client was able to enter the market with a comfortable equity stake in her property.

Considering the credit report the rate we received, in my opinion, was exceptional at P+0.50% for 5 years which was amortized over 30 years and no additional lender fees added. I can honestly say that this was definitely one of the Top 3 most rewarding mortgage files I had the opportunity of working on. My client was able to press the ‘re-fresh’ button which enabled her to start a new chapter of her life.

The Testimonial

Here is the actual testimonial from the client:

“It was definitely a pleasure working with Michael from Dominion Lending Centres. From day one he was upfront and honest about my unique credit situation, however he was also the positive reinforcement I needed to keep going and give it a try. Even when the banks wouldn’t give me the time of day, he was certain we would find someone who would give me a chance. He was very patient with my questions (I am sure they seemed to be never-ending at times), and helped to guide me through the many different stages of purchasing a home.

Thanks to Michael and his dedication, he found a lender that would work with my situation and I now own my first home. He also has coached me on how to fix my credit rating, and I am pleased to say that my credit score is already considerably higher than when we began this process. I would highly recommend Michael to anyone looking for a mortgage!”

Courtesy of Michael Hallett, AMP – DLC Producers West Financial

What does all that technical mumbo jumbo mean? Here are some common mortgage related terms.

Getting a mortgage can be a daunting task. There is so much to know and understand including some pretty confusing language. Borrowers are often confused by terminology like the difference between amortization and term.

And by the way,

Term

The period of time you are under contract with a specific lender at the interest rate that they are providing for that time period

Amortization

A term used to describe the period of time over which the entire mortgage is to be paid assuming regular payments. Usually 25 or 30 years.

Here are some other mortgage related definitions.

Appraisal

An independent assessment of the property by a qualified individual.

Closed mortgage

A mortgage that cannot be repaid or prepaid, renegotiated or refinanced prior to maturity, unless stated in the agreed upon terms.

Closing costs

Costs that are in addition to the purchase price of a property and which must be paid on the closing date. Examples include legal fees, land transfer taxes, and disbursements.

Closing date

The date on which the mortgage closes either in the case of a refinance or new purchase.

Debt service ratio

The percentage of the borrower’s income used for monthly payments of principal, interest, taxes, heating costs, condo fees (if applicable) and debts. GDS is gross debt service – how much you spend on Principal, Interest, Taxes and Heating. TDS is total debt service – GDS plus all other debt payment obligations.

Default

A homeowner is ‘in default’ when he or she breaks the terms of a mortgage agreement, usually by not making required mortgage payments or by not making payments on time.

Down payment

The money that you pay up-front for a house. Down payments typically range from 5%-20% of the total value of the home, but can be anything above 5%, if you qualify.

Early Discharge Penalty

A penalty you may pay your lending institution for breaking the mortgage contract early. This is usually 3 months interest or the Interest Rate Differential (IRD), whichever is larger. See below for IRD.

Equity

The difference between the market value of a property and the amount owed on the property. This difference is the amount a homeowner actually owns outright.

Home Equity Line of Credit

A loan that is secured against your house, like your mortgage, but you obtain a maximum amount that you may borrow but only borrow in the amounts that are needed. You only make payments, minimum is interest only, on what you have borrowed at any given time.

High ratio mortgage

A mortgage where the borrower is contributing less than 20% of the value of the property as the down payment. The borrower may have to pay a mortgage default insurance premium such as CMHC insurance, usually tacked onto the mortgage amount.

Interest Rate Differential

A way lenders calculate the penalty for discharging a mortgage before the end of a closed mortgage contract.

The difference between the interest that the financial institution will make if you continued your mortgage to the end of the contract and what they will make by loaning it to someone else at the current interest rate.

Land transfer tax

A tax that is levied (in some provinces) on any property that changes hands.

Lump sum payment

An extra payment that you make to reduce the amount of your mortgage, usually as stipulated in your mortgage contract.

Mortgage

A loan that you take out using property as the collateral.

Mortgage broker

A company or individual that finds mortgage financing for individuals and companies whether for purchase, refinance, lender switches, etc. A broker does not actually lend money but seeks out a lender and arranges the mortgage terms.

Mortgage default insurance

Required if you are contributing between 5% and 20% of the value of the property as the down payment or to satisfy lender requirements, when necessary.

Mortgagee/mortgagor

Mortgagee is the lender; mortgagor is the borrower.

Mortgage life insurance

This form of insurance pays the outstanding balance of your mortgage in full if you die or become disabled. This is different from home or property insurance, which insures your home and its contents.

Mortgage interest rate

The percentage of interest that you pay on top of the principal amount of the loan.

Open mortgage

A mortgage which you can pay off, renew or refinance at any time. The interest rate for an open mortgage is usually higher than a closed mortgage rate.

Porting

Transferring an existing mortgage from one home to a new home when you move. This is known as a “portable” mortgage.

Refinancing

Usually renegotiating the terms of your mortgage, often increasing the amount of your current mortgage, usually at a new interest rate. The term of the new mortgage is usually equal to or greater than the term remaining on your current mortgage. Often the existing mortgage is paid out and a new one is established with a different lender.

Variable rate mortgage

A mortgage with an interest rate that changes with prime rate, usually expressed as an amount plus or minus prime rate.

Courtesy of Anne Martin, AMP – DLC Neighbourhood 

So, you’ve worked hard to save every penny and have managed to finally afford the down payment necessary on a home. You have searched high and low, only to find the house of your dreams at a price you can afford. Though your credit rating is good and you have a stable job, there are some key things to avoid while waiting for your mortgage to be approved.

Here are 4 things you must absolutely avoid to ensure that you get that dream house:

1. Buying a Vehicle

Your current car may have finally given up or a great deal has arisen, but before making any decision on a new vehicle, check with your mortgage professional. You need to ensure that the numbers you provided on your mortgage application hold true in order to be approved!

2. Changing your Credit or Payment Routine

Before putting extra money towards a debt or changing your payment schedule on any liability, you must check with your mortgage professional. Again, anything that doesn’t align to the information you provided on your mortgage application could put your approval in jeopardy.

3. Changing Jobs

There are many opportunities and challenges that come with any job, but before deciding to drastically change your employment situation, keep the following in mind:

• If you are accepting a new position you need to ask if you will be given a probation period. Any mortgage lender will not accept probationary employment on a mortgage application.

• If your income situation is changing, such as receiving bonuses, overtime, or commissions, you could be putting your approval in limbo. This is risky because these job perks require a 2 year history before a lender will accept them as income.
• If you cannot stand your job any longer and are considering leaving the position, you need to talk to your mortgage professional immediately. The information you provide on your application must check out, especially when it comes to your employment. Most likely, you will need to wait to leave your job until after the mortgage has been approved and you’ve taken possession of the home or you’ll risk losing your dream house.
• If you are considered a contractor or self-employed person, you must provide a 2 year history in order to be approved for a mortgage. If you are considering going into this line of work you’ll need to wait until after you take possession.

4. Making Payments Late

While waiting for your mortgage to be approved, make sure you make every payment early or on time! If your credit experiences even a slight drop because of a late payment or maxed out credit card, a lender will not approve your mortgage and will cancel the application.

Getting approved for a mortgage doesn’t have to be difficult! As long as you do your due diligence and know all the information, you will be on the path to a happy home-buying process. Contact Dominion Lending Centres to inquire about mortgage approvals. We’re always happy to lend a helping hand!

Courtesy of Alim Sharania, AMP – DLC Regional Group 

Back in June 2012 OSFI (Office of the Superintendent of Financial Institutions) rolled out their B-20 Residential Mortgage Underwriting Practices and Procedures, in an effort to force banks and lenders to follow more prudent underwriting guidelines.

One of the most impactful changes was imposed on borrowers who want to take a Variable rate, or a term of less than 5 years. Prior to the B-20, we were able to qualify clients for these types of products using a 3-year discounted rate. To put that in perspective, current 5-year rates are between 2.99% and 3.09%, whereas 3-year discounted rates are between 2.49% and 2.79%. Now, the B-20 mandates the following:

If a client is taking a 5-year fixed rate product, we are able to qualify them using the contractual rate (ie, the discounted rate that their mortgage will be based on) and, as mentioned above, those discounted 5-year rates are currently available between 2.99% and 3.09%.

However, if a client wants a Variable rate, or a term less than 5 years in length, we are forced to qualify them using the Bank of Canada’s posted rate, which is currently 4.79%. What this does is increases the qualifying payment, and since approvals are essentially based on an income-to-debt ratio, said clients will essentially qualify for a lesser purchase price if they want one of these products.

Now, just to curb any confusion, the qualifying rate is not the rate these clients are actually paying. The contractual rate for Variable rates is currently between 2.40% and 2.50% and 2, 3, and 4 year fixed rates range between 2.49% and 2.99%. The purpose of using the Bank of Canada’s posted rate to qualify for these products is simply to prove that these particular clients could potentially handle their mortgage at a higher rate. In the event that rates eventually increase, OSFI feels more comfortable knowing that these clients will still be able to afford making their mortgage payments as they have qualified at a rate as high as 4.79%.

And thus the reason that when clients ask me what they qualify for, I am now having to give them two different price points. One price point that they qualify for on a 5-year fixed product, and a second, lower price point, that they qualify for if they want all of their product options available to them.

Courtesy of Jeff Ingram, AMP – DLC Canadian Mortgage Experts 

Hi! My name is Tad Milmine and I am the creator and founder of Bullying Ends Here. With the new school year now underway I wanted to share with you my anti-bullying program and also thank Dominion Lending Centres for being my National Founding Sponsor.

I created Bullying Ends Here for two reasons. The first is because of my own challenges growing up in an abusive home full of addictions and neglect. I was locked in a basement for 12 years where I was only allowed to leave to go to school. One might think that would be a positive, however, for me, it was another challenge because I used to be terribly shy and introverted. I would cry with any sort of negativity towards me. Needless to say, my fellow peers would call me names on a daily basis so they could see me cry. This was a daily occurrence but escalated in time to physical assaults and threats. I kept everything in because I always felt that no one would understand because I was the only one feeling this way. On top of all of that, I was also holding in another secret, one that I didn’t understand, that I was gay.

I always had a dream that I wanted to grow up to be a police officer but never thought I would be good enough or would be accepted. At the age of 17 I ran away from home and started a new life. It wasn’t easy but I was committed. I accepted myself and began to believe in myself. At the age of 32, I believed in myself so much that I decided to try to achieve my childhood dream. I applied to the RCMP. Because I believed and that I tried, I achieved. I am currently a first responder Police Officer in Calgary.

But this is only half of the reason why I created this charity. The second is because in late October 2011, I was reading the news when I saw a headline stating ‘Ottawa Teen Takes His Own Life Because Of Severe Bullying’. This article was about a boy I had never met named Jamie HUBLEY. Reading his story would truly change my life because it was that night that I realized that there are young people today that still feel the way that I always felt….alone! I decided that I never wanted anyone to feel that way again and that I was going to at least TRY.

I created this very simple and unique program where I go to schools, corporations, community groups and prisons to speak to anyone that will listen about my story in hopes that they will see they are not alone. I created a website (bullyingendshere.ca) where people can reach out to me and know they always have a friend.

Since November 2012, I have personally received over 40,000 emails to which I respond to each and every one myself. Although I am not a professional or counsellor, I make a great friend who will listen.

Most incredible is the fact that Bullying Ends Here is credited with saving 32 lives to date!

I can also say that I have presented to over 150,000 across Canada.

One might look at this and say “wow what great success”, but I think it’s a shame that it is even required. I have made a promise to myself and everyone else that I will do all that I can to help make our world a better place and if that means I have to share my most vulnerable, personal moments in life, then so be it. If it helps just one person, then I will do it.

This “success” however does not come cheap. To travel coast to coast to coast (and soon beyond our coasts), costs money. I do not accept a single penny for my time or expertise, just hope to cover the costs associated with reaching in person. This program would not work if not for the direct, personal connection. I am so proud to say that Dominion Lending Centres (DLC) believes in making this world a better place just as much as I do. DLC has stepped up to be Bullying Ends Here’s Founding Sponsor. Because of this, the program can continue. We cannot stop now, there is much more to do and more funds are required. The only limitation we have currently is funding. Together we all play a role and we can do this!

This coming 2015/2016 school year will see Bullying Ends Here go to British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, Newfoundland Labrador, New Brunswick and Prince Edward Island. Requests come from around the world including Japan, England, Ireland, Philippines, Taiwan, Australia and New Zealand to name a few. It should also be noted that I do all of this on my own time using vacation time or regular days off. My work as a Police Officer is kept separate as best as possible. This is how passionate I am on this topic. I made a promise to Jamie’s family that I will keep their son’s memory alive and that his passing would not be in vain. I know that Jamie would be very proud of the work we have been able to accomplish together.

I am proud of the relationship that DLC and Bullying Ends Here have and I look forward to keeping you updated on the journey that we are on together. We are not only changing lives, but SAVING them!

Courest of Tad Milmine, Founder – Bullying Ends Here 

Saving for a down payment is often one of the biggest challenges facing young people looking to break into the real estate market.  The source of your down payment could come from your own savings, a gift from a family member, your RRSP if you’re a first time home buyer or from the proceeds of selling your current home.

No matter where your down payment comes from,one thing that is for certain is your lender will be verifying your down payment prior to full approval. It’s required by all lenders to protect against fraud and to prove that you are not borrowing your down payment, which can change your lending ratios and your ability to repay your mortgage.

DOCUMENTS YOU WILL NEED TO SHOW WHEN VERIFYING YOUR DOWN PAYMENT

1. Own Savings/Investments:  If you’ve saved enough money for your down payment, congratulations!  What your lender will want to see is a 3 month history of any source accounts used for your down-payment such as your savings account, TFSA (Tax Free Savings Account) or Investment account.

Your statement will need to clearly show your name and your account number.  Any large deposits outside of your normal contributions will need to be explained i.e.  you sold your car and deposited $12,000 or you received your bonus from work.  If you have transferred money from one account to another you will need to show a record of the money leaving one account and arriving in the other.  The lenders want to see a paper trail of where the money came from and how it got in your account.  This is mainly to combat money laundering and fraud.

2. Gifted Down Payment:  Especially in the pricey Metro Vancouver and Toronto real estate markets, the bank of Mom and Dad is becoming a more popular source of down payments for young home buyers.  You will need a signed gift letter from your family member that states the down-payment is indeed a gift and no repayment is required on the funds.

Be prepared to show the funds on deposit in your account no later than 15 days prior to closing.  Again, the lender wants to see a transaction record.  i.e. $25,000 from Mom’s account transferred to yours and a record of the $25,000 landing in your account.  Documents must show account number and name.

Gifted down payments are only acceptable from immediate family members (parents, grandparents, siblings). You can learn more about gifted down payments and get a sample gift letter here.

3. Using your RRSP:  If you’re a First Time Home Buyer, you may qualify to use up to $25,000 from your Registered Retirement Savings Plan (RRSP) for your down payment.  To see if you qualify for the Home Buyer’s Plan to use your RRSP’s as a down payment visit here.  You will need to complete aForm T1036 to withdraw your funds without penalty.

Verifying your down payment from your RRSP is just like verifying from your savings/investment accounts.  You will need to show a 3 month history via your account statements with your name and account number on them.  Funds must have been in your account for 90 days.

4. Proceeds From Selling Your Existing Home:  If your down payment is coming from the proceeds of selling your current home then you will need to show your lender a fully executed purchase and sale agreement between you and the buyer of your home.  If  you have an outstanding mortgage on the property, be prepared to provide an up-to-date mortgage statement as well.

5. Money From Outside Of Canada:  Using funds from outside of Canada is acceptable but be prepared to have the money on deposit in a Canadian financial institution at least 30 days before your expected closing date.  Verifying your down payment from overseas will also require that you provide a 90 day history of your source account.

No matter what the source is, verifying your down payment will require you to show documentation of where the money originated from and be ready to explain any large deposits.  Making regular contributions into your savings or investment accounts will help develop a pattern of deposits and avoid any red flags.  Don’t stockpile your cash and make large lump-sum deposits.

Most lenders will want to see that you have 1.5% of the purchase price on deposit as well to cover your closing cost.  If you buy a home for $650,000 you will need a minimum of 5% down ($32,500) and another $9,750 (1.5%), for your closing cost.  You will need to show a total of $42,250 available on deposit.

Thanks for reading and if you need more information, please don’t hesitate to contact Dominion Lending Centres.

 Courtesy of Brent Shepheard, AMP – DLC Mortgage Evolution 

About 4 years ago, my wife and I bought a house in North Vancouver, BC. It was built in 1959 and was in need of some updates. We gutted the basement to the studs and converted it to a 2 bedroom suite. We put in new insulation (and topped up the existing attic insulation), put in a new furnace/heat pump, got new windows/doors, installed 2 bathroom fans, and got a new hot water tank.

It wasn’t well known at the time (there was hardly any advertising for it), but both the Federal and Provincial governments were offering rebates for making your home more energy efficient. I knew this because of what I do. These are things that we were going to do anyway so why not get some free money for it? Here’s what we did and what you’d have to do in order to take advantage of any rebates:

-hire an energy advisor (around $300) to come to your home BEFORE you start any work. They’ll do an energy assessment of your home and can give you suggestions on what will help improve your energy efficiency

-get the work done

-have the energy advisor come back to your home and document all of the changes that you made (you’ll need to have all of your receipts handy). They look after submitting for your rebate(s)

-deposit your rebate cheque (it’s also tax free which is an added bonus)

In my personal example, we maxed out both the Federal and Provincial rebates which totalled $12,000 at the time and improved our energy efficiency by almost 50% which was huge. We now save (on average) over $100 per month on our energy costs. $12,000 was really nice to get (although our renovation costs were FAR more than what we got back, it’s nice to get something).

Unfortunately, the Federal program is no longer around as it was limited to a certain number of households. Most provinces have their own energy rebate programs. In B.C., you can still receive thousands of dollars in rebates.

Does it make sense to apply for a rebate if you’re looking at changing 1 window or adding 1 bathroom fan? Probably not.

Yes we did do an extensive renovation. Yes it was during the time when rebates were being offered by both governments. My point is that new rebates are always being offered (again not really advertised) and so it’s important to stay in touch with your Dominion Lending Mortgage Broker on what’s available out there. More and more of my clients are renovating the homes that they’re buying, so this is just an added benefit.

Not planning on renovating your home anytime soon? There are other things that you can do to save some money. Do you have a pink or mint green toilet that you want to replace? Many municipalities offer rebates for buying low flush toilets. You can also buy weather-stripping at your local hardware store for about $10 and put it around your doors to help prevent drafts. It’s very easy to do and makes a big difference.

You can check to see what’s available in your province by checking out:
http://www.nrcan.gc.ca/energy/products/energystar/why-buy/14136

In B.C., please check out:
http://www.fortisbc.com/Electricity/PowerSense/Homes/HomeEnergyRebateOffer/Pages/Rebate-details.aspx

When in doubt, please consult your local Dominion Lending Centres Mortgage Broker for details on what’s out there and where to find it.

In the future, I believe that 2 things will really help make homes more marketable:

-being more energy efficient (energy costs are always going up)

-having a secondary suite to help pay your mortgage (especially in high priced markets such as Vancouver)

Courtesy of Joe Curtura, AMP – DLC Origin