Mortgage Stress Test 2020

Latest News Amritjot Saini 11 Aug

The stress test rate change gives your more purchasing power. Here’s how:

New Mortgage Stress Test rate drop announcements and rumors are roaring. It will be 4.79% soon! Great, but how does it affect an average home buyer’s maximum purchase price? Well, let’s just say your purchase power increases by 1.5% by a rate drop of 0.15% from 4.94 to 4.79.

This means earlier you could only get a mortgage for $493k with a $100k income but now you can afford $500k mortgage. Fantastic, isn’t it!

Stress test rate drop

 

You may be wondering, you hear current mortgage rates are historically low, as low as 1.80% 5 year variable and 2% 5 year fixed. Then,

What is this stress test rate?

To simplify it for you, your mortgage term will be based on the rates your Licenced Mortgage Agent will lock for you. But we all know the rates follow the economy and if the bank rate goes up, so does the current mortgage rates. So what the bank wants to test is let’s say in future the mortgage rates are as high as 4.79% or 4.94% (stress test rate), will the borrowers be able to afford the mortgage. Which is why each mortgage application undergoes stress test.

More and more lenders are jumping in the pool offering to stress test your income at 4.79% so hurry and get your pre-approvals and approvals at the lowest rates!

I want to build relations with you and be part of your home buying process!

Call me on (647) 568-5120 and let’s discuss how we can get your approved at the best rates and mortgage products structured to fit your needs.

For free updates about mortgage marketplace, follow me on FacebookInstagram and LinkedIn.

Mortgage Loan Insurance Rates

General Amritjot Saini 10 Aug

Mortgage Loan Insurance Rates

Mortgage loan insurance is an insurance for lenders for the mortgage amount funded. But, this is usually applicable when your downpayment is minimum. Furthermore, you may add the mortgage premium in your mortgage or pay as lump sum. And the lender will pay the insurer directly the mortgage premium.

How much is the mortgage loan insurance premium? How to avoid paying hefty premiums?

The premium is calculated as a percentage of the mortgage. And it is based on the size of down payment (loan to value ratio). The key to saving premium is buying putting more downpayment.  Here is the premium chart showing charges for premium (sourced from CMHC):

  • 0.60% premium for loan up to 65% of home value.
  • 1.70% premium for loan up to 75% of home value.
  • 2.40% premium for loan up to 80% of home value.
  • 2.80% premium for loan up to 85% of home value.
  • 3.10% premium for loan up to 90% of home value.
  • 4.00% premium for loan up to 95% of home value.

Learn more about minimum downpayment requirements. As you might’ve heard, CMHC, Genworth and Canada Guaranty are the 3 mortgage insurers in Canada. While CMHC is government owned crown corporated insurer, the other 2 are privately owned. Indeed, all the 3 insurers charge the same premium rate.

Why insure mortgage if I am putting 20% downpayment?

One of the reasons is insured mortgages are offered discounted rates. Hence the lower rates decrease interest payments and cost of borrowing. The difference in interest rate may supersede the cost of paying some extra premium. Secondly, lenders may ask you to get mortgage insurance depending on their guidelines. For example, in some cases of commercial and high risk residential mortgages.

Recent Changes

CMHC lowered the capacity for home buyers putting less than 20% down. Because the GDS and TDS were lowered to 35 and 42%. Thereby, decreasing the purchasing power of home buyers by 12%.

However, good news is Genworth and Canada Guaranty’s GDS and TDS max still remains at 39% and 44%.

Note: It is good to have at-least one borrower have a credit score of 680 or more. Secondly, non-traditional sources of downpayment (borrowed downpayment) are no longer considered equity for insurance purposes.

Have any questions about mortgage? Contact now (647) 568-5120.

Tips to GET APPROVED

General Amritjot Saini 9 Aug

5 Tips to Get Mortgage Approved

Here’s the 5 Golden tips to get mortgage approved.

1. Check your credit score, utilization and payment history.

The credit score ranges from 300 to 900. To get the best rates, it’s best to have at least one applicant with a credit score of 680 or more.

Along with the credit score, your credit utilization shows your credibility and ability to repay your debts. But the credit reports also shows your history about late payments, number of accounts open, limit and balance owing. It’s always a good idea to pay your existing high debts including auto loans, student loans , line of credit, etc.

There are 2 providers of credit reports in Canada: Equifax and TransUnion. It’s recommended to check your credit sore quarterly so your credit report is top notch.

2. Save Down payment

Find out the minimum downpayment requirements..

Having a larger downpayment makes your application stronger and more lenders will provide competitive rates to get business from you. Plus more downpayment means less borrowing, which means you’ll pay lesser interest during the mortgage term.

Whenever you put less than 20% down, you need to buy mortgage insurance from CMHC, Genworth or Canada Guaranty. But, this premium can be included in the mortgage, which might increase your monthly mortgage payment.

Want to test your downpayment, income and other factors for mortgage? Use these calculators or download my app.

3. Get your qualifying income right

Lenders always require proof of income and income stability for atleast the last 2 years. With a full-time job, the process gets easier as you have the required documents from your tax filings. But many Canadians are self-employed. Don’t worry, there’s solutions for all. Read this article to see if your income type and numbers are qualifying. For any questions about your income, feel free to reach me.

5 tips to get approved for mortgage

4. Get your pre-approval

Pre-approval is basically submitting your an application based on numbers to the lender to get approved for a set mortgage amount, interest rate and term. The rates can be help for up to 120 days. And once you have your pre-approval, you can house hunt with confidence and the final application submission becomes easier as the lenders are already notified.

5. Work with a Licenced Mortgage Agent

It’s quite clear that you’re busy with getting the above 4 things right and it’s very challenging for you to shop around for the best mortgage product. Well, I’ve the solution you need. I am a Licenced Mortgage Agent dealing with over 90 lenders, with great connections. So let me take the load off your head and find you the best rates and mortgage product. Your benefit is you get a Mortgage Expert working for You for Free!

As I bring millions of dollars of business to the banks, the discounts and cashback offers on rates I get are unbeatable. Whether you’re a first time home buyer or an investor, I’ll guide you through the mortgage process with the best trusted mortgage advice and provide professional lending experience. And I like to maximize benefits for my clients in terms of rebates and tax savings.

You can check my published rates. To get access to the unpublished rates with discounts, call me directly (647) 568-5120.

For free tips on mortgages, follow me on Facebook,. Instagram and LinkedIn.

Need more income to GET APPROVED?

Mortgage Tips Amritjot Saini 6 Aug

Need more income for Mortgage Approval?

Canadians and immigrants struggle alot to be able to afford a house. But many face challenges in getting mortgage approved. We ensure to pay credit timely and maintain good credit history. Then, try to save for down payment. Sadly, the Canadian banks and mortgage lenders only qualify a few applicants as home buyers. The reason is need of more Income for mortgage approval.

Firstly one may wonder how to get one’s #s right. So, one starts a business and is able to generate some passive income. Or one may find another part time job. But it is hard to know which income and what portion of it do banks consider qualifying.

If you want to calculate how much income you need or how much house you can qualify for, contact me or download my app.

Mortgage income calculator

 

Well, here’s the answer

  1. Fixed Income: Salaried full-time. Long term benefits. Part-time income with guaranteed hours.
  2. Support Income: Child support. Spousal support.
  3. Variable Income: Overtime, bonus. Causal with non-guaranteed hours. Contract. Investment income. Secondary employment. Part-time income with non-guaranteed hours. Commission income. Self-employed income.
  4. Self-Employed Income: Sole proprietors. Partnerships. Limited or incorporated companies. Individuals employed by a family business.
  5. Investment Income: Dividend, interest, and registered retirement income.
  6. Parental Leave: 100% of return to work income may be used. Given, employer provides written confirmation indicating return date and salary.
  7. Foreign Sources: Only income declared and taxes in Canada.
  8. Seasonal Workers: 100% of E.I. can be used. Given 70% of total qualifying income comes from salary paid by employer. Remaining 30% from E.I.
  9. Other: Professional athletes. Trust income. Foster children. Car allowances. Cost of living adjustments by employer.
  10. Rental Income: 100% of rental income is acceptable. But you need to account for monthly mortgage, property tax and heat expenses.

 

Income stated from 1 to 8, all require minimum 2 years’ history on the tax returns. This means your qualifying income may be the lesser of the average of last 2 years’ income or the last year’s income. If your income is higher than your last 2 years’ average, it can be used to qualify you for more mortgage, given you’ve a letter of employment with guaranteed hours.

However, I’ve got ways to help you increase your capacity and qualifying income. Plus, a special a technique to use up to 85% of your rental properties’ income, after all mortgage, property tax and heat expenses, to get you approved for your next investment.

So what’re you waiting for? Use my knowledge, resources and connections and GET APPROVED. Call (647) 568-5120.

Sourced from CMHC.

GST/HST New Housing Rebate

Latest News Amritjot Saini 4 Aug

GST/HST New Housing Rebate

If you’re buying a newly built home from a builder, self-building or buying a substantially renovated home, you might be eligible for this rebate. With the purchase price, land transfer taxes and other closing expenses, it might be hard to pay 13% HST. This rebate is available to everyone buying a new home as their principal residence. And for first-time home buyers, their incentives can be coupled with this rebate. However, you’re ineligible for this rebate if you’re buying under a corporation or business partnership.

Surprisingly, now there’s a relief! Just fill out Houses Purchased from a Builder Form 190 or  Owner-Built Houses Form 191 and save yourself thousands of dollars in taxes if you’re buying a newly constructed home.

Here’s how the rebate is calculated.

Firstly you get 36% of the GST (5%) portion you paid for your new home. But the maximum rebate is$6,300 and the maximum fair value can be $350,000. If the purchase price is between $350,001 and $449,999, you’ll still get a partial rebate. Unfortunately, if home’s value is $450,000 or more, there is no GST portion rebate. But you still may claim for rebates on provincial portion of HST up to $24,000.

GST/HST new housing rebate

Here’s a few additional situations you may qualify:

  • If you own the land and are building home.
  • Over 90% of the interior from the previously existed house is removed or replaced
  • If you owned a non-residential property and later rebuilt it into your home.
  • When you make any major additions to the house doubling the living space.

Calculate your GST/HST New Housing Rebate:

Let’s assume your home is valued at $340,000.  The HST you need to pay on top of $340,000 is $44,200. This includes 17,000 GST and $27,200 provincial HST.

Next, let’s calculate the claimable rebate. Firstly, 36% of the GST portion (36% 0f $17,000) $6,120 plus 75% of the provincial HST portion (75% 0f $27,200) $20,400. Adding up to 26,520.

Note: For new homes in Ontario, the maximum rebate amount for the provincial portion of the HST is capped at $24,000 if you paid HST on the land. And if you did not pay HST on the land, the maximum provincial portion of the HST claimable is $16,080.

So finally, the rebate in this case would be $6.120+24,000 = $30,120.

Where to send the rebate form?

Form GST190 needs to be mailed with your direct deposit info to:

Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON  P3A 5C1

Remember

The GST/HST new housing rebate is an not automatic rebate. You need to apply manually and make sure you don’t forget to do this when you file taxes.

In case, the builder of your home has already included the HST in the purchase price, you’ll be able to include the purchase price plus HST amount in your mortgage.

To get a professional advice and approval, contact me(647) 568-5120.

Sourced from Canada.ca.

Mortgage Rates and Lenders

Mortgage Tips Amritjot Saini 4 Aug

Current Mortgage Rates and Lenders

You deserve the best mortgage. And to help you make the right decision,  I am here. In the current mortgage rates sheet, you’ll find your options for variable or fixed mortgage rate with terms ranging from 6 months to 10 years. Plus, you may be able to get more discounts on these published rates. To know what lowest rate you are eligible for, fill this form or call (647) 568-5120.

Different banks offer different mortgage rates

Rates are not same for every bank. In fact, you may notice banks posting different mortgage rates for similar mortgage programs. To illustrate, TD bank may offer prime rate while Scotiabank might offer prime – 0.5%.

The reason for difference in rates is each bank has a different lending criteria. While some may be comfortable with a specific amount and others may not be down to take that risk. What most people don’t understand is which bank to go to and apply for mortgage. This is why you need to shop around and compare rates from multiple banks whenever you get a new mortgage, renew your mortgage, or refinance. But every time you do so, your credit takes a hit and if you apply more, banks flag you as a credit seeker.

mortgage broker brampton

Well, what should I do?

Answer is simple. Contact a Licenced Mortgage Professional. As Mortgage Agent, I have access to over 90 lenders and expertise in their programs and rates. Once I review a file, I know exactly which lenders would accept it. All I need to do is pull 1 credit report and I can send the file to as many lenders as I want. And when I approval, I can negotiate terms and rates to make you happy! All this at NO COST TO YOU! (Except in rare complications where my expertise and connections are required)

Bank mortgage rates are mostly higher than what mortgage agents and brokers have.

For free tips on mortgages, follow me on Facebook,. Instagram and LinkedIn.