Thinking of buying a property, but don’t know where to start? Well… that’s where a mortgage pre-approval comes in. Start here. Just like you wouldn’t go into a restaurant without having enough money to buy your meal, so you shouldn’t start shopping for a home without an understanding of how much you can afford. So let’s have a conversation about a mortgage pre-approvals so you can get this house hunting party started.

Although a pre-approval is the best way to get started, we have to be honest about what a pre-approval is and what it’s not.

NOT MAGIC. NOT BINDING.

Let’s start at the beginning and dissect the word pre-approval. Pre means before, in advance of, or prior to, and in this case means before the approval. A pre-approval is not an approval, let me say that again (in italics) for emphasis, a pre-approval is not the same as an approval. It’s not a guarantee of financing. it’s not magic, and unfortunately it’s not binding. There are a number of factors that come into play after the pre-approval is in place that can derail your dreams of homeownership.

• as a mortgage approval requires a property to be scrutinized, and a pre-approval doesn’t look at any property, it can’t be guaranteed.
• as your employment status can change after a pre-approval, all employment documents have to be verified as part of the approval process.
• a secondary credit report can be pulled by the lender or insurer after the pre-approval is in place, if there are discrepancies, they could decide not to proceed with financing
• mortgage rules can change and sometimes come into effect with no grandfathering.

SO WHAT GOOD IS A PRE-APPROVAL THEN…

A pre-approval is simply a formalized gathering of your ducks, and putting them in a row. It won’t guarantee you will get the mortgage, but it will certainly uncover any major obstacles that might be in your way. Consider a pre-approval a pre-screening, where we take a look at your employment, credit history, and your downpayment, and figure out the maximum mortgage amount you can qualify for. We will also have a look at all the mortgage options available to you on the market, so you can decide in advance what product meets your financing needs.

Obstacles, like what? Well, the truth is, you only know what you know, said in another way, you don’t know what you don’t know. Did you know that they figure about 10-20% of credit reports have some kind of error on them. By taking a look at your credit report as part of the pre-approval process (instead of when you have already found the house of your dreams), you have time to fix any errors before hand. This might not sound like that big of a deal, but it could be the difference between getting financing or not.

A pre-approval usually comes with a rate-hold, this is a good thing. Rates are like gas prices, they fluctuate and go up and down from time to time. As part of taking a preliminary look at your mortgage application, lenders will typically offer a rate hold for 90-120 days on a specific mortgage term. This means that if you find a property to buy in the allotted time, even if rates have gone up in the mean time, you will get the rate that was guaranteed. What happens if rates go down, well… you get the lower rate. It’s a win win.

IT’S A PROCESS

Buying a home is a process, a process that has a lot of steps that come into play. A pre-approval is one of the first steps you take. A pre-approval allows you to collect all your documentation ahead of time, handle any obstacles that may come up, have a look at your mortgage options, secure a rate hold, and will give you piece of mind as to the next steps in the process. Regardless if this is your first time buying a place or your twentieth, a pre-approval is the best place to start. Even if it doesn’t guarantee you will get the mortgage in the end.

So if you are thinking about buying a home, let’s get started, as we would love to help you secure a pre-approval. And if for some reason you are faced with some obstacles, we will help you get on track. Contact a Dominion Lending Centres mortgage professional today!

Courtesy of Michael Hallett, AMP – DLC Producers West Financial 

When it comes to mortgages and renovations it is important that you have your financing in place before you take the sledge hammer out of the garage! Lenders do not like coming into play half way through a renovation. Planning is essential to ensure you will have enough funds to cover the renovation costs.

Did you know there are mortgage products available that may help you with the costs of renovations above the 80% loan-to-value refinancing rule. The Refinance Plus Improvements Mortgage is a great way to incorporate the costs of improvements into your mortgage.

Here’s a list of typical Refinance Plus Improvements Guidelines:

1. The improvement funds above the 80% loan-to-value mark for the current as-is market value of your home will be held back by the lender until your renovations are complete.

2. Lending value is based on an Appraisal that states the As-Is Complete Value

3. You will need quotes upfront for the proposed improvements

4. You may need additional funds to pay deposits to contractors

5. Do not start demolitions before an Appraisal is done

6. Funds available are typically limited to 20% of the current appraised value up to $40,000 (ask a mortgage broker about other mortgage options if you require more funds)

7. Renovations typically will need to be complete within 90 days from the date the mortgage completes

8. You must meet the lenders credit and debt servicing requirements

Stay on Budget and on Time by Following these 5 Simple Steps:

1. Finalize the design before you start!

2. Contact Suppliers to make sure that they have the materials you have chosen in stock or that they can be delivered quickly

3. Obtain quotes from 2 or more reputable contractors

4. Apply and secure any permits that are required before your mortgage completion date

5. Give your contractor a deadline to ensure you don’t go over the allotted time to complete the improvements

Start the renovation planning by contacting your Dominion Lending Centres mortgage professional first!

Courtesy of Kathleen Dediluke, AMP DLC Integrity Mortgage 

Happy 2017 my Friends! I hope all has started off well. For many, its a fresh new start. For others, just happy to get rid of 2016. Either way, today is a new day and we have to make the best of it. As they say, today is the start of our future!

For Bullying Ends Here, 2016 was a resounding success. Check this out;

– We presented to over 100,000 students (in every Province).
– Presented in Amsterdam, Netherlands.
– Received approximately 12,000 emails
– Gave over 70 presentations in its entirety along with dozens of shortened ones
– Dozens of media interviews
– Launched the new edition of Bullying Ends Here – My Life (the book)
– Launched the new website homepage
*** credited with saving another 12 lives!!!

For 2017, we have started off with a BANG!! I expect this year to be the very best one yet in every way possible.

Only two weeks ago, I received confirmation that Bullying Ends Here will be presented, yet again, on the International stage. This time in Orlando, FL, at the National Conference on Bullying. This is a massive honour as I believe I will be the on the only Canadian sharing the stage. This will be the second time I am presenting outside of Canada. Clearly, what we are doing is being noticed!

Bullying Ends Here also had the opportunity to attend the Christmas Party for the Ottawa DLC Team in Montebello, QC, and give an update on where we are and where we are going. Just to be there with such incredible company, true friends and family, is special. A very special thanks to El Presidente, Kim McKENNEY along with some of her team; Susan, Trudy, Carol and Faye for being so important to me. I also have to give a shout-out to Lauren and Koko for the laughs and ‘entertainment’.

Bullying Ends Here then headed to Ottawa, ON, for 5 nights to begin filming a very special project along with some media interviews and presentations. Although I cannot share too much now about the project we are working on, I can assure you that Dominion Lending Centres is VERY well represented and I know this is going to lead to even BIGGER things.

While presenting to thousands more already this year, I received an email from a parent who stated that after the presentation, their child had come home from school and began to cry. When asked what was going on, the child stated that she had just heard a presentation at school and was upset because it had hit home for them. They shared that they have been struggling with mental health but that ‘if he can get up every day and continue on, then so can I’ referring to me. The email went on to state how the child would not have shared this had they not heard the presentation and may have struggled to the ‘point of no return’. The parent went on to thank me for allowing the family time to be with their child. THIS is exactly why I continue to do the work and to reach as many as I possibly can.

I want to also share that while I was in Ottawa, I had dinner with Jamie’s parents, Allan and Wendy HUBLEY. I don’t get to see them too often given everyone’s hectic schedules and distance. I also don’t want t
o intrude too much on their emotions given that our connection is the passing of their child. We had the chance to catch up and share some stories. There were tears and laughs throughout the evening as well. As I said to Allan and Wendy that night, although I never met their son, I will forever love him. I know that our work to help those that need it most, does bring the HUBLEY family some comfort. They were very pleased to hear the incredible numbers that we had to provide from 2016.

We are now heading to Morinville, AB, this week to present to multiple area schools along with a Community presentation. This will wrap up January and lead us into what promises to be one incredibly hectic February as we present in Alberta and British Columbia. I will also be speaking at a youth corrections facility. Of course we can not forget that February 22nd is Pink Shirt Day in BC and I know that Dave TEIXEIRA will have much in store for me. As you already know, we rock the pink shirt EVERY day of the year! We will also be launching a few new projects in February so I will have much to share in my next blog. Stay tuned!

I hope that all is well with you. I know that I am going to be in many more Provinces (and Countries) in the coming months and hope that our paths cross. Keep smiling and, as always, know that I am always here. Feel free to visit the website that shares loads of resources, videos and our calendar.

Together, we will not only change lives, but SAVE them!

 Courtesy of Tad Milmine, Founder, Bullying Ends Here

While it’s certainly easy to be intimidated by the prices that you might see as you browse MLS into the wee hours of the night, mortgage interest rates are still at a historical low.  If you’re looking at purchasing for the first time, you’re thinking, “What does that mean?!”

With rates as low as they are, the cost of borrowing associated with your mortgage is lower than ever before.  You also need to look at other fees that can be tied to different mortgage products.  For example, some mortgages don’t allow for additional or increased payments, while others allow you to pay down your principal mortgage amount by up to an additional 20% per year, saving you money over the lifetime of your mortgage. It’s important to recognize and understand these options and fees, and that is where a Dominion Lending Centres Mortgage Broker comes in.  Brokers and their agents are experts in the products that they offer and will work to save you the most money.

Don’t worry!  A Broker can also help you take advantage of low interest rates as a homeowner, too!  It could be the right time to look at your other financials and consider consolidating other outside debts to take advantage of the savings that could be available to you.  It isn’t hard to see the savings between a balance owed on a credit card at 19% or the balance owing on your car at 6.25% and consolidating one (or both!) with your mortgage balance at much lower interest rate.  A broker can look at your current mortgage terms and timelines and can help you save a considerable amount of money each year!

A Mortgage Broker’s service doesn’t stop there.  Since the demand for new homes is so high right now, a Mortgage Broker will also help both first-timers and home-owners peeking around the markets with a pre-approval before you start considering making an offer on a new home. This means that you can confidently make an offer on the home that you love without making a condition on financing.  In a busy market, where purchases often end in bidding wars, having your financing in line could make your offer stand out against the rest.

Since properties are being scooped up like hotcakes, homeowners can also take advantage of selling their homes to downsize and save for retirement, or vacations, or spoiling their grandkids!

Now if you’d rather “love it” than “list it”, you can benefit from today’s high demand, too!  If you have been thinking about adding that basement bathroom, or are in need of upgrading your furnace and air conditioning units, a Broker can help you take advantage of the equity that you have gained in your home since you bought it.  In the last year, the demand for homes has soared, which means that your home could be worth a good chunk more than you might think.  Regardless of if your mortgage is up for renewal or not, a Mortgage Broker can help you make sense of the mortgage that you’re in, and look at payout options that could work in your favour.  And a mortgage evaluation will always be free with a licensed Broker.

Today’s market has a lot of characteristics that can work in your favour, but can also throw a little wrench in your plans.  Always make sure to sit down with a licensed, local Dominion Lending Centres’ Broker to make sure you’re armed with the knowledge that you need to get the most for your money!

Courtesy of Tracy Valko, AMP – DLC Forest City Funding 

The first of our Construction Mortgage Blogs covered the basics of what you would need to know for this complicated mortgage type. In this second part, we will cover three key areas: The budget, the loan, and key take-away points.

1. The Budget

The budget is the most important piece of information that the lender wants to see. It should include “hard” and “soft” costs. There is usually “reserve” money set aside to ensure there is enough money in the anticipated event of over budget costs. The “reserve” money is usually 10%-25% cash flow based on the budget for the project. This is on top of the down payment.

This table denotes common soft and hard costs that should be included in the budget:

2. The Loan

How the loan is Calculated

Lenders will lend up to a maximum amount determined by the guidelines of the individual lender. For example, based on the lender loaning up to 75% of the total cost (with 25% down):

Land purchase price (as is) Total soft and hard costs Total Cost (as complete)

$200,000 $400,000 $600,000 x 75% = $450,000 available to loan

Keep in mind, the lender will also consider the appraised value of the finished product. In this example, the completed appraised value of the home would have to be at least $600,000 to qualify for the amount available to loan. The appraised value is determined before the project begins.

As well, the client will have to come up with the initial $150,000 to be able to finance the total cost of $600,000. A down payment of $150,000 plus the loan amount of $450,000 = the total cost of $600,000.

Construction loans are released in draws (guidelines are based on the lender). NOTE – between Draws, there is an appraisal/progress report that is ordered by the lender. This is at the client’s cost. These reports are usually around $200 per report, depending on the appraiser.

Draw 1 – Foundation Draw The initial draw is usually based on the preliminary fees. Remember from the example in the previous page that the loan amount is $450,000. Foundation Draw – building the foundation Land purchase ($200,000 – down payment of $150,000) = $50,000 Interest Reserve ($30,000 or 9 months’ interest of the loan) = $30,000 Lender Fee (usually 1% plus any broker fees) = $15,000 Legal Fees = $3,000 Total first draw is $95,000 which leaves $355,000 for construction costs.

Draw 2 – Construction begins! Lock Up Draw – Framing is done and doors and windows can be “locked up”. Whatever amount of money was budgeted for the initial framing component of the project.

Draw 3 – Drywall Draw – You get your drywall up. Whatever amount of money was budgeted for the initial framing component of the project.

Draw 4 – Completion Draw: The Lender sends in an Appraiser to do a progress report to verify that the budget has been followed and build is complete. At this point, the lender will contact you to finalize a new mortgage (a “normal” mortgage) that will be based on the appraised value of the home. Once your building project is completed, we will be able to assist you in moving your construction mortgage to a traditional mortgage, utilizing the discounted rates that we have access to.

The lender may also require a project timeline. Typically, the lender allows a timeline of 6 – 12 months, depending on the lender.

3. What you should know?

• Construction loans are usually fully opened and can be repaid at any time.
• Interest is charged only on amounts drawn. There are no “unused funds”
• Once construction is complete and project completion has been verified by the lender, the construction mortgage is “moved over” to a normal mortgage.
• A lender will always take into consideration the marketability of a property. They will look at not only the location based on demographic but also the location based on geography. For instance, a lot that is in a secluded area where no sales of lots have occurred in the last five years and mostly consisting of rock face may not be a property that they are willing to lend on.
• Depending on the lender, you may have a time-frame within which you need to complete construction (typically between 6 and 12 months).
• Although we’ve described 4 draws, the lender can advance additional draws if needed (i.e. there is a time crunch to pay a vendor and you don’t have enough cash to cover the cost. Or there is unexpected expenses that have come up and you have to dip into your contingency fund (usually a 10% reserve determined by the cost to build).

Problems you can Encounter

• You may go over budget and have to dip into the “reserve” fund as needed
• You may have issues with project management not going smoothly. For instance, trades not showing up to do scheduled work.
• Liens can be put on title throughout the construction project timeline which will delay funding for the next draw. Liens will have to be removed before new draws are released.

Delays in construction and depleted funds can wreak create havoc in a project. Make sure you are working with professionals that have experience and know how to troubleshoot when needed

Final Thoughts…

Construction mortgages are complicated. It is in your best interest to have a mortgage professional guide you in the step by step process of a construction mortgage. At Dominion Lending Centres, we have the expertise to show you how to set up your construction mortgage to fit your needs. We make sure that the costs that will cross your path will be taken into account and that you will borrow the required funds to build your dream home. Give us a call to discuss your options in building the house of your dreams!

Courtesy of Geoff Lee, AMP – DLC GLM Mortgage Group 

On several occasions we have had people ask us at Dominion Lending Centres about construction mortgages. Every lender has their own guidelines and rules when it comes to construction mortgages. That’s because there are many details involved in the process of construction, let alone the mortgage that actually funds it! Below is part 1 of 2 of what a construction mortgage entails and what you need to know when tackling this complex mortgage.

Construction Mortgages almost always start with raw land

Raw land usually comes in 2 forms: service lots and un-serviced lots*

Serviced Lots are defined as having:

• Portable water-water that is safe enough for drinking and food preparation
• Septic/sewer services-city connected sewers or a septic field
• Access-a driveway, as rough or refined as it is
• Hydro-connected to power
• Natural gas (if applicable)
• Need 25% to 35% down

Un-serviced Lots are defined as having:

• Portable water-needs to be available
• Septic/sewer services-not applicable
• Access-(other) or not typical such as water access
• Hydro-not applicable
• Natural Gas-not applicable
• No Agricultural Land Reserve**
• Need 35% to 50% down

*guidelines depend on the lender
**land that is reserved for agricultural activity (ie. Farms)

Rates and terms of purchasing raw land

Serviced Lots usually have:

• Maximum Mortgage Amount, depending on the lender
• Maximum Mortgage Amortization, depending on the lender
• Rates are usually a little higher than discounted rates (ie best discounted fixed rate plus 1%), but not always
• Fees – usually a lender/broker fee, but not always
• Terms – usually 1 thru 5 years

Un-Serviced Lots are defined as having

• Maximum Mortgage Amount, depending on the lender
• Maximum Mortgage Amortization, lesser maximum amortization compared to serviced lots
• Rates are usually a little higher than discounted rates and higher than serviced lots (ie best discounted fixed rate plus 2%), but not always
• Fees – usually a lender/broker fee and usually higher than serviced lots, but not always
• Terms – usually 1 thru 5 years

How do you qualify?

• You need to complete a mortgage application
• You need to provide credit bureaus and income documents showing that you qualify for the amount of money you wish to borrow.
• You need to provide a detailed construction budget.
• You need to provide a title search (through your mortgage broker or lawyer)
• You need to submit a copy of the purchase agreement, including all addendums and amendments.
• Builder information and resume (if requested) and project contract
• Full set of legible construction drawings scaled to legal size paper or smaller
• HPO registration (Home Owner Protection forms or registration of new home)
• You base the amount to be borrowed on the appraisal based on a completed project

You may need to also provide….

• Copy of all construction contracts
• Corporate financial statements (if applicable)
• You need to submit a detailed summary of the deal, including how you are expecting to move out of the higher interest rate construction mortgage into a “normal” mortgage, depending on the lender
• Copy of purchase agreement for the land purchase

These are the first steps to setting up and understanding a construction mortgage. There are unique traits to this type of mortgage as with any other mortgage. Remember, you should always consider calling a mortgage broker to help walk you through this complex process!

Stay tuned for Part 2 nwhich will cover the budget, the loan, and key take points.

Courtesy of Geoff Lee, AMP – DLC GLM Mortgage Group 

There have been a lot of changes in the mortgage market over the past few months so many Canadian’s plans regarding homeownership may have shifted quite a bit from last year.

First, new qualification rules came to pass in October where even though actual contract rates are sitting at about 2.79% all Canadians have to now qualify at the Bank of Canada Benchmark rate of 4.64% to prove payments can still be met when rates go up in the future. That has taken about 20% of people’s purchase power out of the equation.

The second round of rules were implemented at the end of November with the government requiring banks to carry more of the cost or lending having to do with how they utilize mortgage insurance and the level of capital they have to have on reserve. This means it is more costly for banks to lend so they are passing some of that cost to Canadians.

We now have a tiered rate pricing system based on whether you are “insurable” and meet new insurer requirement to qualify at 4.64% with a maximum 25-year amortization (CMHC, Genworth, Canada Guaranty are the 3 insurers in Canada) or are “uninsurable” where you may have more than 20% down but can’t qualify at the Benchmark rate or need an amortization longer than 25-years to qualify or are self-employed so can’t meet traditional income qualification requirements. Canadians who are uninsurable will be charged a premium to their rate of anywhere from 15-40bps. So your rate would go from 2.79% to 2.94% at the very least.

Then in BC there was the announcement of the BC HOME Partnership Program (BCHPP) in January. We have finally had some clarification on how this works but the benefits are not as grand as the BC Government would like them to appear.

The BCHPP is a tool to assist First Time Homebuyers supplement their down payment by the government matching what they have saved up to 5% of the purchase price. While this may help some clients bring more money to the table we have to factor a payment on that “loan” into the debt-servicing mix so they will actually qualify for less by way of a mortgage. They have more down payment but can not get as high a mortgage so it’s very close to a wash.

Lastly, as of mid January, CMHC announced they are increasing mortgage insurance premiums on March 17th. Genworth and Canada Guaranty are likely to follow. The insurance premiums are based on a percentage of the mortgage amount requested and how much you have to put down. For people with 5% down the premium will go from 3.60% to 4.00% and if you want to take advantage of the BCHPP program the premium will go from 3.85% up to 4.5%

What does this all mean? Overall it is more costly and more confusing to get a mortgage today than we have seen in many years. With the complexity of the new mortgage market, now more than ever buyers need someone with extensive knowledge to help them sort through their options – such as your local Dominion Lending Centres mortgage professional.

If we can be of assistance to you or someone you know, please do not hesitate to contact us.

Courtesy of Kristin Woolard, AMP – DLC National 

Well you have likely noticed that it is time for resolutions according to the plethora of fitness equipment and organizational plastic bins on sale in every flyer you open. It seems fitting that we take a 4 step approach to positioning yourself for financial fitness in 2017 as well.

So first of all, I am going to go ahead and assume you are human. Yes? If so then please know that you are not slacker! Almost every person I have met has something in their financial world they have been meaning to get to but have not so forget the past and let’s move onward and upwards!

Step 1 – Write down your goals. Study after study proves that actually writing out what it is you want causes the synapses in your brain to reconnect to work towards the goal even when you are not thinking about it.

Step 2 – Just do it! Seems I heard that somewhere before but anyways. It is now time to actually get everything in place.

* Will – Call around and get some quotes on having your will prepared with all the necessary paperwork by a reputable lawyer.

* Financial/Insurance Planner – People who work with a qualified financial planner do much better overall than those who wing it. Meet with a few of them and learn what you need to know so that your pennies turn into a comfortable future

* Accountant – The onslaught of cheap software makes it very easy to think you can do it all yourself when it comes to your taxes but a qualified accountant is essential in my opinion. They can literally save you thousands on your tax bill. That’s your money so you should keep it.

* Mortgage Professional – Your home is your largest asset and your largest debt obligation. Have your mortgage reviewed by a Dominion Lending Centres mortgage professional to make sure you are in the best mortgage product for your situation now and to meet your goals later.

You will have noticed a theme here. You don’t need to know about the law or investments or insurance or taxes or mortgages. All you have to do is find yourself a TEAM to protect your interests.

Step 3 – Time to automate-

Set up to meet your goals automatically. A regular withdrawal for your savings and other expenses is far less painful and way more likely to actually occur than if you have to sit down each month and choose to transfer the funds. If your goal is to pay down your mortgage, why not choose to increase your payments slightly rather than worrying about a lump sum later on. Bite sized is far easier.

If you are trying to keep a budget, there is an amazing app called mint.com. It is from the makers of Turbo Tax – you input all your credit/debit card info, your goals as far as savings or debt reduction, and a budget for each part of your life. Each purchase you make is automatically inputted into the correct category. You can see where you are spending and exactly how much and you will even get text notifications when you are close to your budget in a particular area.

Step 4 – Annual Review Day

So you have done the work and so now all you have to do is take 1 day a year off to review. Meet with all of your team to ensure you are where you need to be. Can you increase your mortgage? Is your will reflecting your new spouse or baby? Do you have enough insurance to protect yourself against disability or critical illness? Spoiler alert! We are all going to need life insurance, disability is the number one case of foreclosure and even out solid health care system does not cover all expenses so critical illness insurance can save your savings.

And there you have it, financial fitness in 4 steps! Your future self will thank you. As they say, the best time to plant a tree was 20 years ago, the second best is today.

Courtesy of Pam Pikkert, AMP – DLC Regional Mortgage Group 

Documents, documents and more documents. Yes that’s right you will need to provide your Dominion Lending Centres mortgage broker with as many documents that we request upfront as possible. Why? Because the more supporting documentation you have available will help us as brokers to find you your best mortgage options. If you don’t have everything on hand e-mail a PDF of what you have and start digging up the rest as soon as possible.

Why so many documents you ask? While the lending market isn’t what it used to be, it is now much more strict and complex then a few years ago. Lenders are asking for WAY more documentation before they will lend you money. Yes, there have been instances of mortgage fraud that likely led to more scrutinized lending and Government regulations that lenders have to abide by are always changing. Mortgage lenders need to protect their investors and help ensure our Canadian housing market remains strong.

It may seem like a pain but ask yourself this if you had a large amount of money would you lend it out to somebody without proof they have income stability and/or the means to pay it back? Pretty sure your answer is no (at least mine is).

Below is a list of typical documents lender and mortgage insurers request. If you would like a tailored list please contact your DLC Mortgage Professional to discuss your application.

Income – lenders are looking for proof of income stability.

Self-employed Income

* 2 years of Income Tax Returns, Business Financials, CRA Notice of Assessments. Often it’s best to have your accountant e-mail them to us so no pages are missing.

Rental income

* Lease agreements

* T1-General tax returns with the Statement of Real Estate Activities. If you don’t claim your rental income let us know as this may affect how your mortgage is approved.

* Proof of the rental income being deposit on a regular basis into your bank account.

Guaranteed Employment Income

* A couple of recent pay stubs

* A job letter confirming your position, guaranteed pay and hours, if you are seasonal, contract or any specific information that relates to your income stability. Lenders will call your employer to verify the letter and ask for more information as possible. (Sample Job Letter)

* 2 Years of CRA Notice of Assessments

* 2 Years T1-Generals

Commission, Overtime, Seasonal, Contact or Bonus Income.

* A couple of recent pay stubs

* Job letter

* 2 years of T1-General Income tax returns

* 2 years of CRA Notice of Assessments

Liabilities – We will see most of your consumer credit accounts on your credit report however we may require some additional paperwork

* Current mortgage statements

* Property tax statements and proof of payment

* Child Support Payments proof via court orders and bank statements

* Alimony via Separation Agreements

* Proof your income tax has been paid. This is the most important item to pay because the Government has more power than the lenders. If you are wanting to refinance your mortgage to pay CRA contact us to discuss your options.

* Proof debts have been paid. If a zero balance is require you must show the account at a zero balance or the current balance and the proof of payment

Down Payment & Closing Costs

* The last 90 days of savings history. Any larger deposits have to be sourced.

* Gift Letter (some lenders have prescribed forms)

* Statement showing gift deposited into your account

* Property sale contracts and mortgage statements

About Documentation from Financial Institute

* Must have account ownership proof. For example e-statements are the best as they typically have your name, account number and the providers details already on the statement

* Screenshots work if the providers logo/name are clearly shown on them as well as the account holders name. If the account number only shows then you will have to provide an additional document from the provider with both your account number and name.

* If you are having your account history printed at a Teller please have the Teller stamp the paperwork

Documentation varies by applicant and lender. Be prepared by contacting your mortgage professional today for your tailored documents list.

Courtesy of Kathleen Dediluke, AMP – DLC Integrity Mortgage 

SHORT VERSION:

Do not rely on your provincial assessment for a fair market value of your property.

The value printed on that document was arrived at during a time in the previous year, the market may have changed a bit since then, and not in the direction you might think.

Do not rely entirely on the buyer’s opinion or the seller’s opinion in an unlisted private transaction for a fair market value.

Do not rely entirely on your neighbours, friends, or family members opinions for a fair market value of a property.

Do consider ordering a marketing appraisal, but do not rely on it 100%… maybe 98% though.

Do consider an evaluation by an experienced, active, local Realtor or two. This in combination with a marketing appraisal is the best indicator of current fair market value.

Gather professional opinions from Realtor(s) and an Appraiser – these are the people with their feet on the ground and their heads in the game.

Thank you.

LONG VERSION:

Provincial Property Assessment notices have arrived in the mail for BC residents (and other provinces), giving some homeowners a big smile and a bit more spring in their step (increased property taxes aside), while others wilt and lament at a modest gain or decrease in assessed value.

Hold on a sec, neither this assessment document nor either parties’ emotions, are tied to a current true market value. In fact provincial property assessments can be significantly too high or too low. In BC, values are determined in July of the previous year, and properties are rarely visited in person by provincial appraisers.

For this reason provincial property assessments should never be solely relied upon as any sort of relevant indicator of true market value for the purposes of purchase, sale, or financing.

Think of the assessed value instead as something akin to a weather forecast, spanning far larger and more diverse areas than the unique ecosystem that is your neighbourhood, your specific street, or your specific property. A weather forecast made the previous July, not the previous week. As this is when assessed values are locked in, a full six months prior to the notices being mailed out.

The BC Assessment Authority does offer some useful tools for a high-level view of the market. Go to http://evaluebc.bcassessment.ca/ and start typing an address. You’ll get a drop-down window where you can click on the address you want. Here’s what you can find out:

DETAILS ON ONE ADDRESS

These come up on the first screen and include: current and last year’s assessed value; size and rooms; legal description; sales history, and further details if property is a manufactured home or multifamily building. There’s also an interactive map as well as links to information on neighbouring properties and sample comparative sold properties.

NEIGHBOURING PROPERTIES

Here you can compare the assessed value of houses in the immediate neighbourhood. Clicking on any property brings up further details.

SAMPLE SOLD PROPERTIES

Find comparable properties and see what they sold for and how their sold price compares to their assessed value. This is a great research tool for owners, sellers and buyers.

These tools can be a starting point, but if you’re looking to set a selling price on your own property, always enlist a professional. Valuing your own property is not a do-it-yourself project. In a buying/selling transaction your are best to order an appraisal, which is a much more accurate reflection of current market value. It is timely and reflects value for zoning, renovations and/or other features unique to the property. An appraiser is an educated, licensed, and heavily regulated third party offering an unbiased valuation of the property in question.

WHAT’S MY HOME REALLY WORTH?

Usually, market value is determined by what a buyer is willing to pay for a home, and what the seller is willing to accept.

A quick survey of recent sales and their relation to assessed values will often demonstrate no clear relationship between sale price and assessed value. It’s often all over the map. Some properties selling well below assessment, and others well above.

You also want an experienced and local Realtor to help you determine the selling price of your home. A (busy &  local) Realtor will have a far better handle on what is happening in your area for prices than does a government document, and in many instances will save you from yourself.

In theory a comprehensive current market review completed by a Realtor should not differ radically from the value determined by a professional appraiser.

Professional appraisers spend all day every day appraising properties, and their reports are often seen as less biased. Imagine your reaction, as a buyer, to the following statements…

1. The seller says their house is worth $500,000.
2. The sellers’ Realtor says it’s worth $500,000.
3. This house is listed at $500,000 based on a professional (marketing) appraisal.

Most buyers would consider #3 the most reliable of the above statements. And most buyers requiring financing will have the benefit of the lender ordering their own independent appraisal to confirm fair market value. Sellers rarely order an appraisal in advance, which can create some interesting situations.

In practice, Realtors are relied upon for listing price estimates. Most buyers don’t care much about what anybody else thinks the house is worth. Buyers care what they think it is worth. This is why we say that market value is ultimately determined by what a buyer is willing to pay for the home, aligned with what is acceptable to the seller.

It is important to note that there are two kinds of professional appraisals. There is the marketing appraisal, such as one ordered by a seller. And there is the financing appraisal, which is done so the bank is satisfied the house is worth what the buyer and seller have agreed it’s worth. The financing appraisal is a less in depth review and is essentially answering the question; is this property worth the agreed upon purchase/sale price.

A marketing appraisal goes deeper (and costs more) but a lender is not concerned with the actual market value over and above the purchase/sale price. A lender just wants the simple question answered. It is a rare day that the appraisal for financing has a value that differs significantly, if it all, from the sale price. Therefore one should not be surprised if, when buying a home, they find that the appraisal comes in bang on at the purchase price. As they do 99% of the time.

The 1% of the time that the value is off it is almost always a private transaction where the seller has had no professional guidance at all and has inadvertently set their price below market by relying on something as inaccurate as their BC Assessment document.

IN SUMMATION

Do not rely on your property assessment for a fair market value of your property.

The value printed on that document was arrived at during a point of time during the previous year, the market may have changed a bit since then, and not in the direction you might think.

Do not rely entirely on the buyer’s opinion or the seller’s opinion in an unlisted private transaction for a fair market value.

Do not rely entirely on your neighbours, friends, or family members opinions for a fair market value of a property.

Do consider ordering a marketing appraisal, but do not rely on it 100%… maybe 98% though.

Do consider an evaluation by an experienced, active, local Realtor or two. This in combination with a marketing appraisal is the best indicator of current fair market value.

Gather professional opinions from Realtor(s) and an Appraiser – these are the people with their feet on the ground and their heads in the game.

…and of course, when it comes time for your mortgage, visit a mortgage professional at Dominion Lending Centres!

 Courtesy of Dustan Woodhouse, AMP – DLC Canadian Mortgage Experts