15 Nov

GROWING CANNABIS AT HOME? LET’S WEED THROUGH THOSE MORTGAGE ISSUES!

Latest News

Posted by: Tracy Price

As many of you already know, Canada just became the second country in the world to legalize marijuana for medical and recreational purposes. Of course, this historic moment in Canadian history has cannabis activists jumping for joy while others are not s-toked on the idea.

With legalization comes the realities of growing your own pot at home which already has Global News giving Canadians a step-by-step guide on how to do so properly and legally — sorry Manitoba and Quebec!

We always have clients contacting us for restructuring advice on their current mortgages. However, through our initial discussions, we have found out that some have started growing pot plants within their homes. Since this legislation is new to everyone, including the mortgage community, we had to do some research.

Prior to September 17, growing cannabis at home was a legal grey area. Mortgage wise, it was a red flag. Any home that has previously or is currently being used in the growing of cannabis was treated as a “grow-op” and as a result is NOT financeable.

grow-op: a concealed facility used for marijuana plantation.

Since legalization day on October 17, the federal government officially set a limit of four pot plants per household — NOT by person. This information DOES NOT have to be disclosed on a property disclosure UNLESS damage has occurred within the household because of cannabis cultivation.

Just as a FYI — ALL property owners should consult their realtor or lawyer about how to properly disclose when selling their household.
After talking to our local Canada Mortgage and Housing Corporation representative (CMHC), she notified us that mortgage insurers are currently leaving lenders to create their own policies on how to deal with marijuana plants and their effect on existing mortgages. We contacted lenders about this ‘budding’ home-grown industry but were met with no answers.

This situation is certainly a waiting game and we’re all holding our breath waiting for the first move!

Let us share our advice.
If you are looking to sell your property or refinance your mortgage — get rid of those pot plants now!
Any home appraisal company can disclose in their report that cannabis is present within your home which could place your home on a list that DOES NOT foresee future sales or refinances.
It is your safest bet to keep your cannabis plant growth up to the licensed growers located across the country.
If you have any questions, contact your local Dominion Lending Centres mortgage professional.

15 Nov

5 GREAT REASONS TO PROVIDE A 20% DOWN PAYMENT WHEN BUYING A HOME

Latest News

Posted by: Tracy Price

There are many challenges that come into play when you’re in the market to buy a home.
Buyers say the number one obstacle to home ownership is saving enough for a down payment, the amount that the buyer provides toward the purchase of their home.
Exactly how much do you need to put down? Assuming you can finance the debt with your current income you can get a mortgage for as little as 5% down PLUS pay for Mortgage Default insurance if you put less than 20% down.
A smart rule of thumb is always try to put a least 20% down. Although that may be a challenge in Greater Vancouver where the current Vancouver MLS stats indicate an average house price of $1,227,420

1. Easier to service your debt. Putting 20% down reduces the size of your monthly mortgage payment, making you more likely to qualify for and afford, your mortgage. Lenders want to make sure you can service your debt with your current income using 2 rules:
o Rule #1 – GROSS DEBT SERVICE (GDS) Your monthly housing costs are generally not supposed to exceed 35-39% of your gross monthly income. Housing costs include – your monthly mortgage payment, property taxes and can include heating. If you are buying a condo/townhouse with strata property then the GDS will also include ½ of your strata fees.
Principle + Interest + Taxes (+ 50-100% Strata Fees if applicable) Gross Income

Rule #2 – TOTAL DEBT SERVICE (TDS) Your entire monthly debt payments should not exceed 40-44% of your gross monthly income. This includes your housing costs PLUS all other monthly payments (first mortgage, property taxes, maintenance fees, additional financing, car payments, charge accounts, etc.).
(Principle + Interest + Taxes) + Other Payments Gross Income

2. A Smaller Monthly Mortgage Payment! You pay LESS!! I’m all about making smaller mortgage payments and having money for the fun stuff in life. More money down means, you borrow less money, which means you will have a smaller mortgage, which means you have smaller, more affordable mortgage payments.

3. No private mortgage default insurance. Putting 20% down allows you to avoid paying for mortgage default insurance.
o In Canada, mortgage insurance is required federally on high-ratio mortgages (a down payment of less than 20%). This insurance, which protects the bank/lender in case the borrower defaults, gives lenders the flexibility to offer homebuyers with low down payments the same low interest rates they would offer to homebuyers with more equity.
o Mortgage insurance premiums are based on the amount of the mortgage. The higher the loan-to-value ratio, the higher the premium cost. In other words, the lower your down payment, the more expensive the insurance. This premium may be paid in cash in a lump sum upon closing, it is usually added to the mortgage amount and paid over the length of the mortgage.
o Canadian Mortgage & Housing Corp. (CMHC) and Genworth Canada provide mortgage default insurance. Click on CMHC or Genworth for the sliding scale, the bigger your down payment the less insurance you pay. Once you hit a 20% down payment, mortgage default insurance is no longer mandatory.

4. Pay Less Interest over the Life of the Loan. You pay less interest with 20% down payment, since you’re putting more money on the house compared to if you put 5% or 10% down.

5. Instant Equity Building. A significant down payment builds instant equity in your home. A 20% down payment immediately puts equity into a home when you purchase it. That down payment gives you some cushion, in case the market takes a downward turn.

If you have any questions contact a Dominion Lending Centres mortgage professional near you.

By Kelly Hudson

 

9 May

SURPRISE – WE ARE IN A REVOLUTION

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Posted by: Tracy Price

The pace of (technological) change is so fast now that it is considered to be of revolutionary proportion.

Much of what we have learned in our lives is about to become obsolete. In fact, much of it already has.

For example, our schools teach us to get an education, get a good job, get promoted and earn a higher salary, all without teaching us about financial literacy. Then we are told to save part of our pay, to put that into a savings account with interest rates less than inflation (which gets taxed…lol), to invest in RRSP’s, RESP’s etc., supposedly to grow into a retirement nest egg.

The problem is with fees and taxes, unless one invests in the stock market (risky) or real estate (less risky) it is impossible to become financially secure, let alone wealthy.

Some believe that the ‘system’ is designed to keep most people poor, or at least working hard their entire lives just to keep their heads above water. We are seeing this more and more and more.

From a technological standpoint, the advent of (ro) bots and artificial intelligence are about to disrupt our lives in every way possible in the years ahead. Driverless cars? How can this be possible? What is certain however is that bots will result in the elimination of tens of thousands of jobs as we know them, even entire industries.

More and more our lives are affected by the so-called ‘internet of things’. Everything is gravitating towards the Internet. The validity of getting a college or university degree (to get ahead) is being challenged like never before. In short, disruption of the status quo will become the norm.

Much of this coming change will force humans to think and act differently than we do today. However, it is within the internet that lies promise of a more prosperous future for many, in fact for everyone that embraces it because it is ‘levelling the playing field’ like never before.

The truth is that we are seeing more and more people becoming wealthy online. Starting an online business takes less effort, less capital and less time than a conventional grass roots start up. Money, lots of money is being made faster than ever before.

The internet also gives us the opportunity to educate and become informed in a more savvy, meaningful way, and the key is for us to forget what we’ve been taught about making money in the past. We need to learn how to educate ourselves, create our own jobs and make our own money moving forward. Growth in recent years in self employment has accelerated dramatically and will only continue to rise.

Undeniably, personal financial security and wealth creation is largely dependent upon how we view and understand today’s big bank culture and business practices, much of which has been chronicled in the media in a less than favourable light; such that it appears things have gotten ‘out of hand’ and in need pullback. Trust and transparency used to be the pillars of our financial system. Unfortunately, this is no longer the case. As politicians, governments and school systems have become outdated and less trusted, so have our banks.

Yet we continue to deposit our paychecks giving the banks free money with which to profit. The banks take fees in an instant while holding our cheque deposits for days (more free money) even when we have more than sufficient funds to clear the cheque. Lending practices including mortgages have in fact become predatory with (potentially harmful) terms and features that are not disclosed to the borrower, which is not only unfair, but not right. Bank mortgage penalties have been systematically manipulated such that when a mortgage is paid out prior to maturity, the lesser of 3 month’s interest somehow no longer applies. Rather the greater of, or the IRD interest rate adjustment factor does, costing Canadians often (tens of) thousands more. Many agree that today’s reality is that the banks’ quest for ever increasing profit at the expense of and on the backs of unsuspecting Canadians is unconscionable.

Just as Fintech (new financial technologies) have begun to revolutionize banking and financial services, we need to revolutionize the way we think about and treat our money. Those in the know pay no annual fees on credit cards, use online bank institutions who charge less or no fees, pay more interest, and they are more likely to obtain the services of a trusted and transparent independent mortgage (broker) professional.

We are reminded from time to time that many people still believe that to use our services means having to pay a fee. This could not be further from the truth since our services are free for arranging prime mortgages (OAC) on approved credit where we are paid a finder’s fee from the lender. Only more difficult, more time consuming mortgages and private mortgages require a fee from the borrower since that is the only way we can be compensated for our services.

Most importantly, we always put you the customer (your interests) first and foremost. We are all about helping you find the most advantageous, cost effective financing possible and our professional advice is invaluable.

If you have relied on the banks until now, perhaps it’s time to become more protective of your money and investigate the mortgage broker option.

Our industry has grown significantly, particularly over the past decade, and there is a growing awareness of the validity and value of our services. But we still have a long way to go before we are thought of as (mainstream) the better option when it comes to mortgage financing.

For your next mortgage need, be part of the revolution and call us first, or at the very least, get a second opinion and experience the positive difference.

15 Mar

THE TRUTH IS OUT – TRUST LOST WITH LATEST TD BANK FIASCO

Bank Industry News

Posted by: Tracy Price

The Financial Post reported that TD Bank stock has been downgraded after CBC News reported allegations of aggressive sales tactics and admissions of law-breaking by bank employees last week.

Admissions of high pressure sales tactics and unethical practices including “breaking the law with practices such as increasing lines of credit, overdraft protection and credit card limits without customers’ knowledge.”

If anyone thinks this issue is with one bank only, then they are either kidding themselves or have something to hide. We believe there is little doubt that all our big banks have similar practices. Will they be sued? This remains to be seen suffice to say that this could become “A Wells Fargo moment”.

Wells Fargo was fined US $185 Million on Sept 8, 2016 by U.S. regulators when ‘abusive’ sales practices by the bank were uncovered. That bank was fined for opening hundreds of thousands of retail bank accounts without client approval according to the Associated Press.

One Canadian analyst suggested that the reported revelations could inflict damage that may have a “material impact on the (TD) bank’s reputation” and earnings and valuation.

Is this just the tip of the proverbial iceberg? Only time will tell but this isn’t going away anytime soon and will likely be news for some time. Are other banks involved in the same type of practices? Is there more to the story, meaning other practices not yet uncovered? When will it be deemed more than just unethical? When is it deemed that they’ve crossed the line and broken the law? Canadians deserve to have such questions answered.

On the mortgage front, we have being informing our readership about the perils of bank Collateral Mortgages now for over five years. For example this type of mortgage product gives the banks the ability to secure previously unsecured debt instruments, thus giving them the power to ultimately force the sale of a property without any missed mortgage payments whatsoever, charge higher interest ‘at will’ etc. While the mortgage product itself is legal, they don’t disclose to consumers the general nature of the new product. Isn’t the act of omission, by not mentioning to the customer that they are signing a Collateral Mortgage, in and of itself illegal?

As your trusted mortgage advisors, we suggest that the lack of disclosure practised by our big banks, which has become commonplace, should perhaps be investigated and challenged to establish whether it is in fact breaking the law. If so, then the potential damages could become astronomical.

The value the mortgage brokerage industry brings consumers has never been more clear. We also keep the banks competitive. Without us, Canadians would be paying much more.

Please understand that obtaining a mortgage is much more than about ‘Rate’. It’s about the ‘Terms’ of the mortgage and the ‘Trust’ you have in the supplier. Call us to discuss.

28 Feb

MORTGAGE CHANGES = DIMINISHED PURCHASE POWER

Bank Industry News

Posted by: Tracy Price

There may finally some progress being made with the Federal Government after Dominion Lending Centre’s Founder and CEO, Gary Mauris, presented to the Standing Committee on Finance in Ottawa on February 8th about the imbalance in the Government’s new mortgage rules.

In October 2016, the Federal Government made changes that are limiting and threatening to average Canadians and their ability to buy housing and access equity from their homes… Especially those of that live outside of major city centers.

How is purchase power affected? Let’s look at Barry & Louise’s situation. Combined, they earn $65,000/year. He works at a local factory and she at a grocery store. They have great beacon scores, a $400 car loan payment and minimal credit card debt. They have $16,500 saved for a down payment on their first home.

Before the changes, Barry & Louise would have been able afford to purchase a $330,000 home with 5% down, qualifying for a mortgage of $313,500, paying 2.89%.

Now, because they are forced to qualify under the “stress test” at a rate of 4.64%, they can only qualify for a $253,500 mortgage, lowering their affordability to $270,000. That’s a $60,000 difference in purchasing power. They are priced out of the market.

The bottom line as we see it, is this. There was no logical, ethical reason for the Federal Government to implement such rigid regulations so swiftly. The mortgage default rate in Canada is less than 1/3 of 1% … that’s only 0.003%!!! Mortgages are not the issue. High interest rate, easily accessible consumer debt products are.

Through the Mortgage Broker Channel, monoline lenders now account for 38% of all mortgage funding in Canada. This is great for Canadians! Competition is always beneficial for consumers. Look at airlines and cell phone companies. Lack of choice = monopoly, which means more expense and less flexibility for consumers. The same thing goes for mortgages.

The only mortgage institutions that don’t benefit from more choice are the big chartered banks. Banks make multi-billion dollars in profit, year over year. They are in the business of cross-selling multiple high interest rate products and charging massive penalties for early mortgage pre-payments.

The moment a bank has a new mortgage client, they start enticing them with great offers on lines of credit, credit cards etc. They have the power to lock you in and change the rates on the fly, making it difficult to go elsewhere. They often don’t approve clients for refinances for debt consolidation as they make their money on your consumer debt.
The government consulted with a few banks before making these rash changes. They did not consult with the broker channel or monoline lenders. There is something unjust about this and it favours the banks. We support choice, competition and what’s best for Canadians. Contact us and see how we can help protect you.

19 Sep

JENNIFER PRICE JOINS PRICE TEAM MORTGAGES | DOMINION LENDING CENTRES!

Latest News

Posted by: Tracy Price

We’re very excited to announce that our team is expanding and new generations have joined our life here in Fergus, Wellington County.  This summer, Jennifer and her 4-year-old daughter Yasmine moved here from Toronto! We couldn’t be more ecstatic about having them become part of our daily lives.

Over the past 15+ years, Jennifer has been part of our business from the sidelines. Her heart has been with us as we embarked on building a Mortgage business with compassion and dedication to our clients.

She’s shared in the stories of struggle and victory we’ve endured personally, and with our clients. She’s helped with marketing initiatives and has been a sounding board for us as we’ve established, grown and stabilized our business in a very competitive industry.

As a child, Jennifer watched and learned from Ron, when his career in Mortgage Insurance expanded to Developer/Builder in Burlington. She recalls him following his dreams and making choices from his heart, even when that meant he might sacrifice something for it.

Finally, with great pride, she watched him alongside Tracy Luciani-Price (her awesome step-mother!!) build a Top-Producing Canadian Mortgage Brokerage, known today as Price Team Mortgages, Dominion Lending Centres.

Jennifer & Yasmine Price, Fergus ON

Jennifer has decades of experience in business development, centering around digital marketing/advertising. She’s helped propel start-up businesses into acquisition and sustained expansion.

Although that was exciting for her, she admits that there was always something missing. She wasn’t truly helping people in an authentic, heart-felt way. WELL, THAT HAS CHANGED, FOLKS!

The countless number of people we’ve helped through mortgage financing always comes with a story… one of heart, compassion and dedication. We always do what’s right for our clients.

It takes a special person to be passionate about helping others. We whole-heartedly know that Jennifer will thrive at Price Team Mortgages.

As a solo parent and soon-to-be home-owner, Jenn has been on the client-side and understands why working with a dedicated Mortgage Broker vs a Bank is so beneficial. We have made miracles happen… even for Jennifer.

Her heart and eagle-eyed business savvy will be an asset to Price Team Mortgages and to every client we serve.

Please join us in welcoming Jennifer and Yasmine to Wellington County! As our area grows, we take comfort in knowing that talented, spirited people with heart are flocking to our community that we’re so blessed to be part of.