Financing

Financing is often one of the toughest and most confusing aspects of buying a home for a first time buyer. Even if you are not a first time buyer and are already semi-familiar with mortgages, porting a mortgage and CMHC insurance still confuse even savvy investors.

Sellers

A mortgage is merely an IOU (I Owe You) that is secured against real property (land, home, condo); by securing against the asset, the bank protects themselves and can offer the lowest rate possible. A mortgage is a contract between yourself and the bank, with penalty fees if you repay the money early, which happens when you sell. Most sellers are also buying their next property and consider getting a new mortgage. It makes sense to keep with the same bank and consider PORTING. The bank really does not care in what property address the IOU is secured against, and will consider other security instead. In essence, we sell your home, buy a new one, and move the mortgage with you. No penalty fees. (Assumes equal value of both properties; some charges if new property is less, we INCREASE AND BLEND if the next property is more expensive).

Mortgage insurance is another potential savings. I talked to people who have bought a property (CMHC insured) only to sell it, buying another property and insuring the new property AGAIN. Mortgage insurance does NOT need to be rebought each time. This couple I met at a party had just sold a $250 000 condo to buy a townhouse in the $300 00 range. On their condo apartment they had paid just under 3% to insure when they purchased ($250 000 - 12 500 downpayment * 2.75% insurance premium = 6531). When they purchased the NEW townhouse, they paid another $7800. In reality, they did not have to insure the entire $300 000 as they had previously paid for $250 000 of insurance. They lost $6500 due to bad paperwork and lack of knowledge. OUCH.

Buyers

1. Financing for most buyers is amongst the most difficult. Many buyers have trouble with:

2. 1) poor credit

   1. 2) no downpayment

   2. 3) limited job history

   3. 4) new immigrant

   4. 5) too much debt

   5. 6) not enough "proven" income (think of a waitress, lots of tips, but little is declared for tax purposes)

   6. 7) a combination of the above

For many buyers, I schedule a one-on-one appointment to review where they are financially, answer questions about the home buying process, how I will aid them, and answer general questions. Sometimes we are seeing homes the next weekend, sometimes they need the expert guidance (often completed quickly, sometimes over months/years) of one of my excellent mortgage brokers to correct their problem. Throughout the entire process, I remain available to answer their questions.

We have yet more skill sets (land development amongst them), but these 6 are the major ones clients find most useful.