Ian Leverington's Blog

You may have thought that the mortgage rule changes from Ottawa only affect first time home buyers which is understandable because the media sucks at providing the public with the real story. Yes, prospective home buyers qualify for 20% less now than they did prior to October but, the majority of the rule changes have indirectly and directly affected mortgage competition. This is all due to increased costs to the mortgage insurers (CMHC) which is handed off to the lenders which (as you might have guessed) is handed down to you, the consumer. Now, you may be thinking 'but Ian, I already have a mortgage and my rate is set, so why do I care?'. Well, when you need to renew your mortgage in 5 years or whenever your term is due, your lender's new rate offering is going to be higher because of these changes. Of course, I'll help you find a better rate option at that time but, with reduced competition in the mortgage market, you're options could be slim. You may even...

D eciding on a mortgage rate option often becomes much more complicated and thought provoking than initially anticipated. Especially if this is the first time you've been faced with this decision. You have to decide between a fixed rate term or a variable rate term and anything from a 6 month agreement to a 10 year agreement. In some cases you might even have the option to choose an open term mortgage (no pre-payment penalties) however, don't expect an open term mortgage to be available and if it is, the rate will be much higher (usually at least double). Fixed Rate Terms... Understanding a fixed term mortgage is pretty easy. You decide on the length of the term you want and you know exactly what your interest rate and payment will be for that time.  Variable rate mortgages come with the uncertainty of knowing what your interest rate and payment will be, which is why this post primarily focuses on explaining variable rate mortgage agreements. Variable Rate Terms......

Near the end of 2016 Canadians experienced a couple significant mortgage rule changes affecting the mortgage amount one could qualify for as well as increased costs to mortgage lenders which of course have been passed down to consumers like you and me. Now, Canadians need to prepare for further increases in mortgage borrowing costs. On Jan 17th, CMHC announced they would be raising their mortgage insurance premiums. Genworth Canada has already voiced that they will be following suite and Canada Guaranty won't be far behind with a similar announcement. Official CMHC news release  here . The following chart outlines the premium increases: Canadians experience a premium increase seemly, not that long ago in July of 2014. CMHC has attempted to downplay the additional costs to borrows by stating the higher premium will result in an increase of approximately $5 to one's mortgage payments. I'm not sure exactly how they came to that number but, the premium increase a...

Everyone of course but, why does no one like talking about it? Why is money such an uncomfortable subject? For Example: When was the last time you asked yourself 'Why do I use my bank?' Probably never. You set up an account when were 12 and you've probably never changed banks since. What do you think your bank is paying you for keeping your money with them? If it's more than .10%, you're above average! Online banks like Tangerine or EQ Bank offer as much as 2.00% for a regular savings account. Think having a local branch is convenient? When was the last time you visited your branch? Only time I've gone in in years is because my bank (BMO) still doesn't offer mobile cheque deposits. About the only unique product the big banks offer is unsecured lines of credit. Otherwise, literally almost every other money product can be accessed elsewhere. I don't work for Tangerine or EQ Bank or any financial institution, I just think it's time people start caring...

Here's how mortgage qualifying in Canada works (regulated by OSFI - Office of the Superintendent of Financial Institutions )... One can only qualify to spend up to 39% of their total household, gross income toward basic home expenses which include mortgage payments, property taxes and heating costs. It's important to know that exact calculations are only used for property taxes in this equation. An estimate of usually no less than $100/mth is used for heating costs and when it comes to mortgage payments, the BoC's 5 year benchmark rate of 4.64% is used instead of the actual rate which could be half that. So what all this math boils down to is that what one can actually qualify to spend about 30% of their gross income on mortgage payments but wait... That's assuming your credit is top notch. If you have more of an average credit score, you could be limited by another 5% less. AND this is all only if all your other debt payments (credit cards, car loans, lines of...

A collateral charge mortgage is a method of registering a mortgage on a property's title up to or above the value of the home with the purpose of making futuring borrowing against the home easier. In contrast, a regular mortgage is only registered against the property for the total amount borrowed. Ex: If your home value is $410,000 and you owe $307,000 the mortgage registered against your title may still be as much as $410,000 or even higher. The benefit is supposed to be that you can then borrow money from your home in the future without having to refinance your mortgage, meaning you avoid the legal process however, your lender may still charge a fee to advance additional funds. In order to borrow more you're still required to qualify and an appraisal is still needed which you may be required to pay for. The primary disadvantage to a collateral charge mortgage is that they can't be simply transferred to a new lender in order to take advantage of a better mortgage ...

Average debt balance for Canadians in 2015 was $21,058. I have reviewed a lot of credit bureaus and I learned early on in this business that most people have an inadequate understanding of how credit reporting works. Most go about their life almost never thinking about their personal credit profile until they want to apply for some type of credit or loan. The thing is, some forms of credit of very easy to qualify for like secured or low limit credit cards or auto loans  which are weirdly easy to qualify for considering some vehicle payments can be as much a a mortgage payment! So these types of credit don't really require much for preliminary advice or planning. Other types of credit are more difficult to qualify for, like unsecured loans, lines of credit and mortgages and these require a much more strict understanding of borrowing requirements. So, to help you work toward a 800+ credit score which will allow you to qualify for a mortgage or any type of credit you w...