And on that note, I always find it very interesting, even entertaining, when I am included in a conversation where people are discussing their mortgages (or let’s be honest, sometimes I eavesedrop!).  It usually goes something like this “well my mortgage rate is this” and “well I deal with this bank/lender and I can do this” or even “why did you do that, you should have done this” and so on and so on.  Of course I am the one that usually steps in and asks a few questions to help them they realize how different mortgages can be and that we each have different needs/goals; is your rate fixed or variable? is your term open or closed? how long is your term? Why did you choose that rate/term/lender?

Two things always surprise me, how many people have no idea what the answers to these questions actually are, especially the last one, and secondly the look of shock I get that they don’t know the answers!

So, with that said, I now challenge you – do you know the answers to my questions? If not, it is time to go and dig through all that paperwork you stashed away and find out!  I think each and every one of us should review our mortgages at least once a year and make sure it is still meeting our needs.  Our needs and personal situations can and do change from time to time and it is important we understand how these changes can affect our mortgage, and why it is important to consider all options when choosing a mortgage and lender.

My advice on this snowy Wednesday – Take in all you can about mortgages so that you understand all aspects of your mortgage, this will help you choose the best options in the future!

Thank you for taking the time to read this!

Nicki Pike

So, as an insider in the mortgage industry, if I were choosing someone to assist me with my mortgage, these are a couple of questions I would ask during my “interview”: 

1. How long have you been in the industry?  This does not necessarily mean they have been with their current brokerage for 20 years – rather how long have they been doing mortgages? How long have they been in the financial industry?  What is their experience? 

2. How many lenders do you work closely with and why?  Options are important when choosing a mortgage, but how many options do you really need to consider? Lots of mortgage brokers advertise “access to 100′s of lenders . . .”, but realistically after you have sat down with your mortgage professional your options can be narrowed down to a few suitable options based on your financial picture, the property, and what is important to you in your mortgage.  This is why, even though we may have access to over a 100 lenders, we generally work closely with 10 or less.  We work closely with a few lenders as this allows us to know their products inside and out and establish strong relationships with those lenders, which quite often translates into fast and efficient service as well as great rates. Of course, we then have access to all the other lenders if necessary.

3. What is your turnaround time?  Will it take a couple of hours, a day, a week, how long will it take to get approved?  If you are short on time you need to know your mortgage professional can pull through for you

4.  How many deals do you get approvals on?  This is important – you want to make sure the mortgage professional you choose can effectively know which applications will be approved and which ones won’t, this is called an approval ratio .  Why do you want to know their approval ratio?  It speaks to how efficient and knowledgable they really are.

These are just a few questions to ask – and don’t be afraid to ask – as a mortgage professional I want my clients to be comfortable with me and if answering a few extra questions builds that trust, great!

Thanks for taking the time to read my blog!

Nicki Pike

all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions

By taking the time to meet with a mortgage specialist up front, you will be ready to go if you find that perfect house, or decide to move forward with that big renovation.  During the appointment, we will do an application to discuss what you can afford in terms of a mortgage, this avoids any disappointment in thinking you can afford more than what the lenders will actually approve you for. 

The other important piece of a preapproval is a rate hold – I can hold interest rates for up to 120 days, or even up to 18 months if you are building!  This can be a great advantage while you are house shopping or finalizing the details of your renovation. 

So basically, getting a pre approval has two main advantages, depending on your situation:

1. Allows you to know what you can afford up front – if you are house shopping this also is a bonus from the sellers point of view, they may be easier to work with regarding the negotiations if they know you have done your home work up front and are pre approved

2. Lock in your interest rate – a must in today’s rising interest rate environment.  If you are house shopping, you can relax and know that you have up to 120 days to find the perfect house and keep your rate hold.  If you are renewing, why not get a rate hold 120 days before your maturity date?  This way you are protected if rates go up between now and then.  And if you are refinancing, lock in that rate as soon as you can then you can take your time and be sure you are making the right decision for your financial future.

A lot of people miss this important step of getting pre approved when doing anything mortgage related.  My advice?  Stop looking at a mortgage as a negative – that huge amount of money with monthly payments for the next 25 or 30 years.  Start looking at it as a positive – it is the vehicle that allows you to own your own home – and what an accomplishment and great feeling that is!

Nicki Pike

403-391-2053

www.mortgagewithnicki.com

If you answered yes to the above question, you may already know that banks and lenders may look at your mortgage application differently than say your neighbor who is a teacher.  If you are self employed it is important to understand how and why lenders may look at you differently.

Here are the main factors that are taken into consideration if you are self employed:

1. How long you have been self employed

2. How long you have been in your respective industry

3. Can you verify your income?

4. How much down payment do you have?  Where is it coming from?

5. Credit history

The first thing lenders ask is how long you have been self employed.  If it is less than 3 years but you have been in the same industry for 2 years or longer, a lender may still look at approving a mortgage for you.   Your mortgage would be insured through CMHC, Genworth Financial or Canada Guaranty depending on your individual situation and you would be charged an insurance premium based on your application, this premium gets added onto the mortgage so you do not have to pay it out of your pocket.  For example, with 10% down and an amortization of 25 years your insurance premium would be 4.75% of the mortgage amount.  This insurance is referred to as default insurance and is insurance for the lender.

How long you have been in your industry has an impact as well, for example, if you switched industries completely to start your own company a lender will view that as higher risk – they will ask questions like what experience do have in that industry to build a successful company?  Chances are lenders would not approve a mortgage unless you have been in the industry for at least 2 years.

The third question was whether or not you can verify your income.  This one gets a little more complicated, it can depend on variables such as whether you are a sole owner, a partner in a partnership or have a limited or incorporated company.  What most lenders need in order to “verify” your income is a full two year history of you being self employed and that the income you are showing on your personal taxes is enough to cover your existing debts and the new mortgage.  Lenders will ask for the following and can ask for additional paperwork depending on your unique situation:

- 2 years of income tax returns

-2 years of Notice of Assessments

- 2 years of company financials if you are a limited or incorporated company

- proof your income taxes are up to date

If you have been self employed for less than 2 years but in the same industry for longer than 2 years, or if the income you showed on the above documentation isn’t enough to qualify you for a mortgage, then you still have options depending on your credit history and how much down payment you have.

If you are able to prove your income to the satisfaction of the lender than 5% is the minimum down payment required.  However, if you can not prove your income or have been self employed for less than 2 years but in that industry for longer than 2 years, you will require a minimum of 10% down from your own resources. (savings, investments RRSP if you are a first time home buyer).

Strong credit is also very important if you are self employed, especially if you can not verify your income and only have 10% down.  If you have more than 20% down than credit becomes less important but you may be facing a higher interest rate and/or lender fees.

If you are self employed and have been thinking about buying a home, please call today for more details or apply online.

Nicki Pike

403-391-2053

nicki@mortgagegrp.com

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all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions

 Have you ever wondered exactly what a lender is looking at when they approve a mortgage?  Here is a brief overview of some factors, or pieces of the puzzle, that are taken into consideration when you apply for a mortgage:

 -         Will you be living in the property or will it be a rental property?

-         Down payment – how much money do you have to use for a down payment and where is it coming from, is it from your savings, an RRSP, is it a gift, is it borrowed?

-         Credit history, have you always made your payments on time on your credit cards, loans, lines of credit, etc.  How long have you had a credit history? How much credit do you have? Are you close to your limits? Who’s lending you money?

-         Job stability – how long have been with your current employer or in your current industry? Are you self employed?

-         The property itself – is it a house, acreage, condo, duplex?  Where is the property? How old is it?

-         Income – how are you paid – are you salary, commission, hourly

-         Affordability – comparing your income versus your debts, including the new mortgage payment, property taxes and utilities

 It is a matter of how these pieces of the puzzle fit together in your unique situation that will determine if you qualify for a mortgage.  Your situation is unique to you and the only way to know if you qualify for a mortgage is to pick up the phone and call! 

So call Nicki Pike to find out if you qualify for a mortgage and to lock in today’s great rates!

403-341-3415 or 403-391-2053

nicki@mortgagegrp.com

www.mortgagewithnicki.com

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all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions

 The government has stepped in and tightened up mortgage rules again.  We saw the first changes take place back in October 2008 followed by more changes in April of 2010. 

 Now, in 2011, the federal government has once again stepped in to tighten up mortgage qualifying rules in Canada.  Federal Finance Minister Jim Flaherty announced the changes on Monday January 17^th, as a way to address concerns over high Canadian household debt loads. 

 Here is a summary of the changes:

 -         reduced amortizations from a maximum of 35 years to 30 years on insured mortgages

-         lowering the amount that can be borrowed against the equity in your home from 90% to 85%

-         no more federal government backing on Home Equity Lines of Credit – takes effect April 18^th 2011*

 These changes make home ownership in Canada more difficult in terms of affordability as well as lower the opportunity to use the equity in one’s home for other purposes, such as debt consolidation.

 By lowering the maximum amortizations from 35 years to 30 years, the mortgage amount that you qualify for, and effectively your purchase price on a new home, is reduced.  This is because your mortgage payment goes up with the shorter the amortization of 30 years.  The positive – reducing amortizations will lower the total overall interest Canadians will pay on their homes.

 The second change reduces the amount of equity that is available for a refinance.  Effective March 18^th, 2011*, a home owner will only be allowed to borrow up to a maximum of 85% of the value of the home when refinancing an existing mortgage.  This reduces the amount of money available for things such as renovations.

 It is important to note that no changes were made to minimum down payment requirements, which still sits at 5%**, or to how condo fees are included in a mortgage application.

 To find out how these changes affect you – call today!

Nicki Pike

Red Deer Mortgage Associate

403-391-2053

nicki@mortgagegrp.com

Mortgage With Nicki

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 *these changes are set to take effect March 18^th and April 18^th but lenders can choose to put them in to effect sooner

**owner occupied homes only, OAC

all information in this blog, previous blogs and future blogs are my opinions based on information I have read and used that information to form my own opinions and are just that, my opinions

After reading the findings, I found it quite interesting that only 1/3 of Canadians have a good understanding as to what a Mortgage broker/associate does, with only 5% having a full understanding.  This lack of awareness is a huge hurdle in Canadians taking advantage of what brokers offer.

The survey identified several key strengths of brokers/associates, with the top 3 being:

- competitive interest rates

- wide selection of products

- helping consumers understand their options

After seeing these top 3 strengths of dealing with a broker I ask myself why wouldn’t someone call a Mortgage broker/associate to assist with their next mortgage? 

The research also found that consumers who renewed or renegotiated their mortgage through a broker came out ahead.  Again, I find it interesting that more Canadians are not taking advantage of Mortgage Brokers/Associates.  We consult specialists in many areas of our lives, for example an accountant for tax purposes, a financial planner for retirement planning, a doctor when we are sick – why not someone that specializes in mortgages?

My goal is to help Canadians see the benefit of using a local Mortgage Broker/Associate one client at a time.  By offering competitive rates, a wide selection of products and lenders, and the time, knowledge and experience to help my clients understand their options I will be increasing awareness to what a broker can truly offer, which is a win win for everyone!

Thanks for taking the time to read my blog, until next time, make everyday better than the last!

Read the full survey/report

Nicki Pike

Red Deer Mortgage Associate

403-391-2053

Check out my website for more information on myself and mortgages

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*Maritz Research Canada, a division of Maritz Canada Inc, Maritz Research Canada provides consultative services based on primary marketing research to many of Canada’s top companies and organizations. Maritz Research is a Gold Seal Member of Canada’s Marketing Research and Intelligence Association (MRIA), and is the world’s 12thlargest marketing research company.  all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions

 How does one go about choosing the right mortgage when there are so many lenders and options to choose from?  First of all, a mortgage should not be chosen based on rate alone.  Of course rate is important but there are many other important variables to consider.  Here are some questions you can ask yourself to help choose the best mortgage for you:

 1.  When are you planning on buying? If the answer is in the next 3-4 months you may want to get a rate hold or pre approval in place in case rates increase while you are house shopping, a rate hold or pre approval can also help you determine the price range for you to shop in

 2.  Are you comfortable if your payment fluctuated occasionally? Or do you prefer a consistent payment that you can budget around?

 3.  How long do you plan on living in the property?  When it comes time to sell will you be buying another property? Or maybe building?

 4.  Do you plan on making pre payments on your mortgage?  Or maybe you plan on increasing your payments each year?

 As you can see, there are many things to consider when choosing a mortgage and believe it or not, not all mortgages are built the same.  For example, a 5 year variable mortgage at one lender could have a set payment but at another your payment could vary whenever prime changed.  Or, on a fixed rate mortgage, one lender may allow a 15% pre payment per year where as another may allow 25%.

 An Independent Mortgage Associate can help you ask the right questions, consider all options and ultimately help you choose the right lender and mortgage for you.

 Nicki Pike

Independent Mortgage Associate with TMG The Mortgage Group Alberta Ltd.

Red Deer, Alberta

Call Today 403-391-2053

Mortgage with Nicki!

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*all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions

- First, according to Genworth, the unemployment rate in Red Deer has dropped in the last two months, and is the 4th lowest in the province.  This is great news for the stability of our local economy.

- It also appears that there will be a push of buyers purchasing their first homes in the coming months and into 2011. 

-  less buyers are looking for more expensive homes and there are more people planning on purchasing rental properties or second homes into 2011.

- housing starts will continue to rise slowly in the next few months but will level off in the coming years.  This will help stabilize the number of homes on the market and will help balance the supply and demand which will ultimately stabilize home prices over the next few years as well.

- one of the problems in the housing market right now is that buyers are starting off with very low offers in relation to the asking price, and most sellers need a certain sale price to pay out their existing mortgage, this leads to lots of listings but few sales

- we are potentially moving into a buyers market with prices having the potential to move down slightly

As always, the biggest question you need to ask yourself is “is now the right time for YOU to buy or refinance” and I can help you answer this question, all you need to do is call!

Nicki Pike 403-391-2053

Keeping Mortgages Simple!

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*all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions

If you are planning on going house shopping the first thing you should do is speak to an independent mortgage associate to find out what your options are.  Throughout the application process, your mortgage specialist will take your information and complete a full mortgage application.  They will then go over what options are available to you and discuss what you are able to afford.  Once this has been explained and discussed, the next step is what is usually referred to as a mortgage pre approval.  But this is where it gets interesting.

You need to understand if you have a pre approval or a rate hold, and here is the difference:

Rate Hold

- this is what most lenders provide

- with a rate hold your application has not been reviewed by anyone other than your mortgage specialist, if your information fits within the necessary guidelines, a rate hold is issued

- this is subject to your application being reviewed by a lenders underwriter once you have an accepted offer as well as is subject to the reviewal of all of your supporting paperwork, for example your letter of employment and down payment verifcation

- a rate hold is also subject to the approval of the property is this is what the lender is actually lending the money against

The risk with a rate hold is that the lender doesn’t approve the paperwork you provide to confirm the information given in the application.  For example, your employment and income – maybe you told your mortgage specialist what you made last year and maybe that included overtime that the lender won’t consider. 

This is why it is important to work with someone who asks the appropriate questions and paperwork up front to provide you with a pre approval.

Pre approval:

- your mortgage associate will complete an application with you the same as the above scenario, but then will ask for verification of your employment, income and down payment, as well as any other paperwork a lender may require

- your application is then submitted to a lender

The main difference is with a pre approval, your mortgage associate has verified the information that you provided.  This ensures accuracy in the application.  This leaves you, the borrower, feeling much more confident about going shopping!

 A pre approval or rate hold is never a guarantee that you will be approved but it will give you an indication if there are any concerns in getting an approval and allows you to address anything that needs to be changed or fixed before you start shopping.  It also gives you an idea of what you can afford and what payment you are comfortable with.  Which is why it is highly recommended.

If you are planning on buying a new home in the Red Deer or Central Alberta area give me a call to discuss your pre approval today!

Nicki Pike

Mortgage Associate Red Deer

403-391-2053

Check out my website to learn more about mortgages!

*all information in this blog and previous and future blogs are my opinions based on information I have read and used to form my own opinions and are just that, my opinions