Reverse Mortgage Myths

Reverse Mortgage Myths

Reverse mortgages have come a long way. They have evolved from a needs-based product to a solution that many financial professionals recommend as an important component of a comprehensive retirement plan.

Unfortunately, there are still many misconceptions regarding reverse mortgages. Below, the myths are separated from the facts. Watch this video:

Myth: The bank owns the home.
Fact: You always maintain title ownership and control of your home, and you have the freedom to decide when and if you’d like to move or sell.

Myth: You will owe more than your home is worth.
Fact: Clients can qualify for up to 55% of the appraised value of the home, 33% on average. Due to HomeEquity Bank’s conservative lending practices, you can be confident that there will be equity left in the home when the loan is repaid. In fact, over 99% of HomeEquity Bank’s clients have equity remaining in the home when the loan is repaid.

Myth: A reverse mortgage is a solution of last resort.
Fact: Many financial professionals recommend a reverse mortgage because it’s a great way to provide financial flexibility. Since it’s tax-free money, it allows retirement savings to last longer.

Myth: You cannot get a reverse mortgage if you have an existing mortgage.
Fact: Many of HomeEquity Bank’s clients use a reverse mortgage to pay off their existing mortgage and other debts, freeing up cash flow for you to use as you wish. How great would it feel to be free of regular mortgage payments?

YourMortgageYourWay.ca has Certified CHIP Reverse Mortgage Specialists ready to answer any questions you may have!



Follow Us



Subscribe

Seek a mortgage professional and see where you fit in before you decide to buy your home. Our team is ready to help.
Give us a call  +1 416-640-0930 or send us an email to  info@yourmortgageyourway.ca

Canada’s First Time Home Buyer Incentive Program

Canada’s First Time Home Buyer Incentive Program

The new First-Time Home Buyer Incentive allows eligible first-time home buyers, who have the minimum downpayment for an insured mortgage, to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada.

How Do I know if I Qualify for This Incentive?

At least one homeowner must be a first-time home buyer, which is considered as the following:

  • You have never purchased a home before
  • You have gone through a breakdown of marriage or common-law partnership (even if the other first-time homebuyer requirements are not met)
  • In the last 4 years, you did not occupy a home that was occupied by the home buyer or their spouse

How Does my Income Affect Qualifying for this Incentive?

Your total qualifying income must be $120,000 per year or less. Remember you will still need to qualify the income requirements set out by lenders and mortgage loan insurers.

Do I Still Need Mortgage Insurance?

Mortgages must be eligible for mortgage loan insurance through either Canada Guaranty, CMHC or Genworth. The first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium. The premium is based on the loan-to-value ratio of the first mortgage only. That is, the first mortgage amount divided by the purchase price. The Incentive amount is included with the total down payment.

Do I Have to Pay the Government Back

The first-time home buyer will be required to repay the Incentive amount after 25 years or when the property is sold, whichever comes first. The home buyer can also repay the Incentive in full at any time, without a pre-payment penalty. Refinancing of the first mortgage will not trigger repayment.

How is the Repayment Calculated?

Repayment is based on the property’s fair market value at the point in time where repayment is required. If you receive the 5% Incentive, you will pay 5% of the home’s current market value. If you received 10%, you will pay 10% of the home’s current market value.

Does this Affect the Type of Property I can Purchase?

Yes, there are some guidelines for the type of property, and the intention of ownership. Eligible residential properties include:

  • New construction
  • Re-sale home
  • New and re-sale mobile/manufactured homes Residential properties can include 1 to 4 units.

Types of Residential Properties Include:

  • family homes
  • Semi-detached homes
  • Duplex
  • Triplex
  • Fourplex
  • Townhouses
  • Condominium units

Depending on the eligible property type, the Government of Canada will offer 5% for a first-time buyer’s purchase of a re-sale home, and 5% or 10% for a first-time buyer’s purchase of a new construction. The property must be located in Canada and must be suitable and available for full-time, year-round occupancy. Additionally, you can NOT purchase the home with the intention of renting, as investment properties are not eligible.

Have More Questions About Mortgages? Contact YourMortgageYourWay.ca for a Free Consultation



Follow Us



Subscribe

Seek a mortgage professional and see where you fit in before you decide to buy your home. Our team is ready to help.
Give us a call  +1 416-640-0930 or send us an email to  info@yourmortgageyourway.ca

No Stress Test Required

No Stress Test Required

Mortgage App

Whether you’re in the market for a new mortgage or looking to renew, switch, or refinance your existing mortgage, we make it convenient and straightforward. No stress test required!

 

 

Here are some of the ways we are making your home investment more affordable*: 

1.

Increase your home budget (maybe upgrade your neighbourhood as well).
Conventional, income-qualified purchase now 3.34%, qualifying at the Contract Rate and with a 30-year amortization. No Stress Test and no insurance required.

2.

Refinance your existing mortgage at a lower rate (so you have more money in your pocket).
Conventional, income-qualified refinance now 3.44% and qualifying at the Contract Rate and with a 30-year amortization. No Stress Test required.

3.

Self-employed? We give you a break as well.
Conventional Non-Income Qualifying program purchase and refinance now 3.64% and qualifying at the Contract Rate and with a 30-year amortization available. No Stress Test required.

 

Our Mortgage Calculators https://yourmortgageyourway.ca/calculators/ show how much you can save by changing your payment frequency or making extra payments, as well as helping you understand how much you can afford for your new home.

Plus, YourMortgageYourWay.ca takes the stress out of talking to a Mortgage Agent!

Please get to know us at https://yourmortgageyourway.ca/team-contact/

* Available for new files only- not available for existing applications.
Limited time offer.
Subject to change without notice.

 



Follow Us



Subscribe

Seek a mortgage professional and see where you fit in before you decide to buy your home. Our team is ready to help.
Give us a call  +1 416-640-0930 or send us an email to  info@yourmortgageyourway.ca

Do you know how much you can afford? We have an app for that.

Do you know how much you can afford? We have an app for that.

Mortgage App

We’re dedicated to providing you with all the information you need to make a well informed decision on your mortgage financing. So we built an app that will give you insight on all your mortgage needs – right from your mobile device. When you download the MCC Home Centre app, you get quick answers from the mortgage scenario builders and calculators instantly. It’s user friendly and the best mortgage tool available in Canada (just ask our clients and partners!).

Do you know how much you can afford? Start planning your mortgage by downloading the YourMortgageYourWay.ca App today from the App Store or Google Play!

Here are just some of the tools you’ll be getting for free:

  • Calculate your total cost of owning a home
  • Estimate the minimum down payment you need
  • Calculate the maximum loan you can borrow
  • Stress test your mortgage
  • Estimate your Closing costs
  • Calculate Land transfer taxes and the available rebates
  • Search for the best mortgage rates
  • Compare your options side by side

Best of all, you can email summary reports to share with your realtor or significant other.

Download on The App Store or Google Play at

 



Follow Us



Subscribe

Seek a mortgage professional and see where you fit in before you decide to buy your home. Our team is ready to help.
Give us a call  +1 416-640-0930 or send us an email to  info@yourmortgageyourway.ca

New CMHC Guidelines could open doors to financing for self-employed

New CMHC Guidelines could open doors to financing for self-employed

Mortgage for self-employed Canada

Earlier this year, we asked the question “Why is it so hard to get a mortgage when you’re self-employed”. Here is a link to the blog post in case you missed it.

And then, this summer, CMHC promised to make it easier for self-employed to get a mortgage: https://www.theglobeandmail.com/business/article-cmhc-aims-to-make-it-easier-for-self-employed-to-get-a-mortgage/

The following table outlines enhancements to CMHC’s guidelines, which apply to transactional and portfolio insurance (1-4 unit residential properties) took effect October 1, 2018

The noted enhancements to CMHC’s guidelines for satisfying income and employment requirements for self-employed borrowers are effective as of October 1, 2018.

Please note that the establishment of these CMHC guidelines does not preclude Approved Lenders from observing their own lending practices.  As such, implementation of CMHC guidelines may vary among lenders. These new guidelines are meant to be principle based and not to be too prescriptive to provide maximum flexibility for lenders.

In case you missed it, earlier this year we talked about the CMHC insurance premium and the impact it is having on homebuyers.

Global News, The Morning Show with Roy Cocciollo, Why home buyers are being left with less     Roy Cociollo, radio AM640, Toronto, Mortgage Talk

Why is it important to talk about self-employed Canadians?

“Self-employed Canadians represent a significant part of the Canadian workforce. These policy changes respond to that reality by making it easier for self-employed borrowers to obtain CMHC mortgage loan insurance and benefit from competitive interest rates.”
— Romy Bowers, Chief Commercial Officer, Canada Mortgage and Housing Corporation

Self-employed Canadians are key contributors to strong and vibrant communities and make up about 15% of Canada’s labor force. However, they may have difficulty qualifying for a mortgage as their incomes may vary or be less predictable.

According to Canada Mortgage and Housing Corporation (CMHC), they are making a number of changes aimed at giving lenders more guidance and flexibility to help self-employed borrowers:

  • Providing examples of factors that can be used to support the lender’s decision to lend to self-employed borrowers who have been operating their business for less than 24 months, or in the same line of work for less than 24 months such as acquiring an established business, sufficient cash reserves, predictable earnings and previous training and education; and
  • Providing a broader range of documentation options to increase flexibility for satisfying income and employment requirements when qualifying self-employed borrowers such as the Notice of Assessment (NOA) accompanied by the T1 General, the CRA Proof of Income Statement and the Statement of Business or Professional Activities (T2125) to support an “add back” approach for grossing up income for sole proprietorship and partnerships.

 



Follow Us



Subscribe

Seek a mortgage professional and see where you fit in before you decide to buy your home. Our team is ready to help.
Give us a call  +1 416-640-0930 or send us an email to  info@yourmortgageyourway.ca