Rules Rules Rules…. How do we manage all Mortgage rule changes???

The lack of equity in most properties combined with the tighter restrictions in the financial world could make it hard to get the funds to upgrade your property.  What if there was a way to do your renos improve the value and not have the worry of whether you have enough equity to do it??  WELL YOU CAN!!   

Did you know?

•       In 2010, 42% of households surveyed have completed renovations.

•       In 2010, Canadians spent $23 Billion in renovations.

•       Average renovation cost was $15,000.00.

•       75% of Renovations, clients had financed their improvements from personal savings.

•       20% of Renovations, clients utilized personal loans and lines of credit, credit cards.

•       3-5% utilized the purchase plus or refinance plus program.

•       Major banks do not offer the purchase or refinance plus to their customers, they make much more by offering personal loans, credit cards or lines of credits.

 Since the Government Changes in 2011/12, more clients are having a difficult time pulling equity out to do renovations to their home as you can no longer refinance past 80% LTV.

In addition to the new refinance restrictions are stricter qualification rates, a prohibition on high-ratio insured rental financing, stated income restrictions, covered bond restrictions, stricter documentation rules, HELOC LTV reductions, withdrawal of liquidity (rationed portfolio insurance), elimination of insurance on high-end properties, debt ratio limits, and much more.

The Refinance plus improvements program allows you to underwrite based on the improved value of the home after the renovations are complete, thus giving the client more equity available to pull out!

Suited to homeowners that require improvements to their home by consolidating their current mortgage and the improvements into one mortgage

                       

Examples of qualifying expenses

•       Adding a garage

•       Property needs a new roof

•       The flooring needs to be updated

•       Granite countertops up to a full new kitchen

•       Modernize the bathroom- sell it as an advantage of creating your own dream bath

•       Upgrade wiring – required for mortgage financing if knob and tube wiring

•       Pool and landscaping

This can work in a variety of instances, for example, the property you are living in has a purple bathroom and out of date cabinets.  You have had it on the market for over 6 months and can’t get a buyer to look past this eyesore.  A refinance plus improvement will allow you to increase the value of the home and get that sale, regardless of the equity in the property.  Now you can add the value to the home, find a buyer and move into the dream home you’ve been waiting for.

Alternatively you love your home and just need to make some changes to make it feel more up to date.  All you need is to get the quotes, talk to us, and have the improvements done.

Basically the Refinance plus improvement program would allow you to go to 80% of the as improved value rather that 80% of the current value. (new refinance guidelines July 2012)   

Why aren’t our current banks advertising this?  Wouldn’t this help out so many clients who feel trapped?  Well, that’s because the banks make more money on lending us higher interest loans and lines of credit which we only pay interest on and never really pay down.

Just one more reason to use a qualified licensed mortgage broker!

Call us for great advice today!

1-888-755-1126

HarmonyMortgage@gmail.com

HarmonyMortgage.ca

 

Calling all renters!!!

 
Chilliwack - Renters, heads up! You're going to pay more! A 3.8 per cent increase in rent is coming in 2013.
Under the Residential Tenancy Act, the maximum allowable increase is lower than this year's 4.3 per cent, but it still represents hundreds of extra dollars renters will need to spend ,to keep a roof over their heads. The rate increase is based on inflation plus two per cent.

The ongoing dispute between renting and buying.  Well the above notice published by

 MyChilliwacknews.com may be exactly the push you need to step out and take advantage of the great rates and low prices in the market still today in Chilliwack.  It is only a matter of time we will see the impact of growth come our way,  Why pay some one elses mortgage when you can pay your own and build your own equity!

Purchasing a home is one of the biggest decisions most people ever make.

Ultimately, the decision is a personal choice, but it helps to look at the pros and cons of buying to determine whether home ownership is right for you.

Some advantages of buying a home

Owning a home is generally considered to be a sound, long-term investment that can provide satisfaction and security for you and your family.

Each month when you make your mortgage payment, you are building equity in your home.

Equity is the portion of the property that you actually build through your monthly payment versus the portion that you still owe the lender.

At the beginning of your mortgage, more of your payments go toward paying off the interest and less toward paying off the principal. But the longer you stay in your home and the more mortgage payments you make, the more principal you pay off and the more equity you accumulate.

Most mortgages also offer you the option of making additional monthly or annual payments to reduce your principal faster. Some prepayment privileges, for instance, enable you to pay up to 20% of the principal per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

There is also a tax advantage. If your home is your principal residence, any profit you make when you sell it is tax-free. A home can appreciate – or increase in value – as time passes, building more equity. As you build up equity, it’s usually easier to upgrade to a more expensive home in the future thanks to the profit you’ll make when selling your current home.

As an owner, you can also decorate and improve your home any way you like. Ownership tends to give you a sense of pride and can offer you and your family stronger ties to the community.

When making the decision about whether to buy or rent, it’s important to carefully choose a home you can afford, and then weigh the pros and cons. Millions of people enjoy the rewards of home ownership but, ultimately, it’s a personal decision based on your own priorities.

If you’re thinking of buying your first home, Tammy O'Callaghan and Carie Pool who are Dominion Lending Centres mortgage professionals can answer all of your mortgage-related questions.

 Need to give notice to your landlord??

                                               Tammy O'Callaghan & Carie Pool

1-888-755-1126
Harmony@gmail.com
Harmonymortgagegroup.ca