31 Jul



Posted by: Mike Hattim

There are several things to consider before you take the plunge and put your home up for sale. This might sound obvious, but the first step is to call your mortgage broker, not your lender directly or your realtor.
You don’t have to look long for an unfortunate story of someone who didn’t understand their portability, penalty or transfer costs. Here’s how you avoid this scenario.

1. The anniversary date of your mortgage will depend on your penalty. If you are in a variable rate there usually (unless you took some kind of no frills product with an additional penalty for the appearance of a lower rate) will pay 3 months interest (so a monthly payment and a half) in a fixed rate it can be up to 1-4.5% of the outstanding mortgage balance. Remember we can estimate things, the only guarantee you will have of your penalty is when the lawyer requests the payout statement.

2. Just because a mortgage says its portable doesn’t mean you don’t have to completely re-qualify. Changing properties means complete requalification of everything; credit, income and property. Less than one per cent of mortgages actually get ported due to the changes in the market, or your circumstances.

3. If you have accumulated outside debt, you may not even qualify to purchase for more due to recent rule changes. You’ll need clarity on what the approximate net will be after anything that is required to be paid out to improve qualification.

4. If you list your property and want to buy first or need money for a deposit, you may need to change your mortgage first which you won’t qualify for if your property is already listed. This happens frequently when downsizers are selling.

5. Making a purchase requires a deposit that later forms part of the down payment, so understanding this before you go out shopping helps you plan for it

A little preparation helps the process go more smoothly, and Dominion Lending Centres mortgage specialists are here to help.

By Angela Calla

28 Jul



Posted by: Mike Hattim

When you apply for a loan, lenders assess your credit risk based on a number of factors. Your credit score, as well as the information on your credit report, are key ingredients in determining whether you’ll be able to get financing and the rate you’ll pay. To get approved for a loan and to pay a lower interest rate it’s important that your credit report reflects that you’re a responsible borrower who pays their debts on time with a low risk of defaulting.

Credit Report vs. Credit Score
To start with, it’s important to understand that your credit report and your credit score are two separate things.

Credit Report – Your credit report contains information detailing your credit history. Sources include lenders, utility companies and landlords. This information is compiled by one of two major credit-reporting agencies (Equifax and TransUnion) that try to create an accurate picture of your financial history. Credit files include information such as:
• Name, address and social insurance number
• Types of credit you use
• When you opened a loan or line of credit
• The balances and available credit on your credit cards and other lines of credit
• Information about whether you pay your bills on time
• Information about any accounts passed to a collection’s agency
• How much new credit you’ve opened recently
• Records related to bankruptcy, tax liens or court judgments
Errors on your credit report can reduce your score artificially. In fact, 1 in 4 consumers have damaging credit report errors. Therefore, it’s important to stay up-to-date on your credit report history. If there is an error, you should dispute it and get it removed as soon as possible. Last year, 4 out of 5 consumers who filed a dispute got their credit report modified, according to a U.S. study by the Federal Trade Commission.

Credit Score – Your credit score is the actual numeric value extrapolated from the information in your credit report. A credit-reporting bureau applies a complex mathematical algorithm to the information in your credit file to create your numerical credit score.
Beacon is the most widely known credit scoring formula in Canada and is used by many creditors. Your FICO score can range from 300 to 850, with under 400 being very low and 700+ putting you in the healthy range. Your credit score is meant to give potential lenders an idea of how big of a financial risk you are. The higher your score, the less likely you are to default or make late payments and the more likely you are to be approved for financing.
Your score is based most strongly on three factors: your payment history (35% of your score), the amounts owed on credit cards and other debt (30%) and how long you’ve had credit (15%).

What Are They Used For?
Lenders glance at your credit score to determine your credit risk. Most traditional lenders have pre-set standards. If your credit score is within a certain range, they’ll offer you certain credit terms. If you don’t fall within their approved range, then you may be denied. Most banking institutions will only approve a loan if the client has a credit score of at least 640. A score of 700, however, gives you a much better chance at gaining approval at most lending institutions and at reasonable rates.
As far as interest rates are concerned, banks use an array of factors to set them. The truth is they are looking to maximize profits for themselves and shareholders. On the other hand, consumers and businesses seek the lowest rate possible. A commonsense approach for getting a good rate would be having the highest credit score possible.
It’s important to note that if you apply for a loan, the lender will most likely pull your credit score through what is commonly called a “hard inquiry” on your credit, which slightly lowers your credit score. Therefore, it’s important to know your credit score ahead of time, fix any errors, and apply for loans which you have a good chance of being approved for.

Things You Can Do to Improve Your Credit Score

1. Check your credit report for errors – While the credit agencies do their best to keep your record free of errors, they can make mistakes. It’s important to check your credit report at least once a year — consumers are entitled to one free credit report every 12 months — to ensure all of the information is correct. Each agency may have slightly different information and, consequently, may have errors another credit report doesn’t.
2. Set up payment reminders – Making credit payments on time is one of the biggest contributing factors of your credit score. It may be helpful to set up automatic payments through credit card or loan providers so you don’t forget to pay when payment is due.
3. Reduce the amount of debt you owe – Stop using your credit cards. Use your credit report to make a list of all your accounts and check recent statements to determine how much you owe on each account and what interest rate they’re charging you. Then create a payment plan to lower or eliminate the debt you still owe.

How Dominion Lending Centres Can Help
Many businesses need financing to start or expand. Although your credit score is only one component of your lender’s decision, it’s an important one. If you have a low credit score and are unable to secure financing through a traditional bank, DLC Leasing will be able to get you approved with our team of lenders. When the bank says no, our team will still say yes with flexible terms and interest rates.

By Jennifer Okkerse

26 Jul



Posted by: Mike Hattim

The best part of writing about mortgages is that I get the chance to educate people about a topic which I find endlessly interesting. Reverse mortgages are certainly a topic which deserves some consideration. Everyone seems to be quite polarized over this issue so it seems it is past time we took a closer look.

Imagine the following scenarios:
1. Bob receives a CPP and OAS and a small work pension. His fridge has died but all of Bob’s credit facilities are maxed and he has been declined for additional credit.
2. Sue needs to put her husband Joe into long term care but the cost is much higher than they anticipated and she knows their savings will not last long.
3. Mary and Bill want to purchase a property in Arizona so they can enjoy the warmer weather.
4. Steve wants to be able to use the equity in his home to purchase a rental property so he has additional cash flow.
5. Eveline recently saw an increase in her living expenses and cannot make the ends meet.
6. Cyrill and his wife would like to gift the inheritance to the kids while they are able to watch them enjoy it.

So you get the idea. There are many situations that a person may benefit from having a reverse mortgage. The extra funds could help them through a tough spot or allow the freedom extra funds can offer.

Here in a nutshell are the facts.
• There is only one provider of reverse mortgages in Canada and they are regulated by the Federal government like any other bank.
• They have been around for 30 years.
• You remain the owner of the home, not the bank.
• Unlike a regular mortgage, you do not need to qualify based on income.
• The goal is equity preservation. They want you to have the same equity in your home at the end as you do now.
• NO payments are required as long as you still live in the home though you can if you like.
• The rates are not horrible and the only fees you pay are $1495 for the closing costs, an appraisal and the fee for independent legal advice.
• The amount you can borrow is based on your age, location, property type and the value of the home.
• The money can be taken as a lump sum or month by month, whichever suits you better and it can be used for whatever you like though there is due diligence to protect you.
• If you are survived by your spouse they can remain in the home payment free.
• Tax arrears, OPD, bankruptcies can all be paid from the proceeds.
• Your family is welcome to ask their questions to protect your interests and the mortgage company knows that you want to have something to leave the kids, they will help you achieve that goal.

As always you should speak with a Dominion Lending Centres mortgage professional. My hope is that you may have seen that a reverse mortgage is not an evil entity designed to take your home but instead should be viewed as just another tool available to you.

By Pam Pikkert

24 Jul



Posted by: Mike Hattim

Mortgage rules have become stricter over the past few years. Assuming you have a down payment, good credit and a good job, what could prevent you from obtaining financing for a home purchase?
Below are five less obvious reasons a bank may turn you down:

It’s not you, it’s the building
Hate to be the bearer of bad news, but even if you’re the perfect candidate for a loan, you can still be rejected by a lender if the building you’re considering flunks a bank’s requirements. There are myriad reasons a building can be rejected, but one possible reason could be the building construction or condition.
In downtown Calgary we have some condos that were built in the 1970’s using a technique called Post Tension. It has been discovered that the steel rods in the walls can corrode over time and the buildings could collapse. Some lenders are okay with an engineer’s report but others won’t consider lending in this type of building. A few years ago a condo was found to have water seeping down between the inner and outer walls from the roof. This resulted in a $70,000 special assessment for each condo owner. Before the problem and the cost were assessed most lenders refused to lend on this property.
If a condominium building does not have a large enough a reserve fund for repairs a lender may want to avoid lending in that building as well.

Your credit doesn’t make the cut
If you have a credit score of 680+ this probably won’t be a problem for you but for first time home buyers with limited credit this can be a major stumbling block to home ownership. Check your credit score before you start your home search.
Not having enough credit can also be a problem. If you have a Visa card with a $300 limit, that won’t cut it. A minimum of 2 credit lines with limits of $2,000 is needed; one revolving credit line such as a credit card and an installment loan such as a car loan or a furniture store loan.
A long forgotten student loan or utility bill from your university days can also cause problems if its showing as a collection.
You’re lacking a paper trail
You have to be able to show where your money comes from. A cash gift of the down payment for your new property without a paper trail isn’t going to fly with the bank. If it is a gift, we need to see the account that the money came from, a gift letter from a family member, and the account the money was deposited into.

Your job
Being self-employed or a consultant comes with its own set of obstacles. But the solution here, too, is about documentation. And be prepared to offer up more documentation than someone with a more permanent income stream. Two years of Notices of Assessment from the CRA will show your average income over a two-year period. This could be a problem if your business had a slow start and then really picked up in year two. The two-year average would be a lot lower than your present income.
Another stumbling block may be how you are paid. Many people in the trucking industry get paid by the mile or the load. Once again a two year NOA average should help.
In Alberta, many people are paid northern allowances, overtime and a series of pay incentives not seen in other industries. This can be a problem if you do not have a two-year history.
When you apply for a mortgage you need to stay at your position at least until after your home purchase is complete. Making a job change with a 90 day probation means you will need to be past your probation before the mortgage closes. If you make a career change , you may need to be in your new industry for a least a year before a lender will consider giving you a loan.
The property’s appraisal value is too low
This often happens in a fast moving market. The appraisers base their value on previously sold homes on the market in the last 90 days. If prices have gone up quickly your home value may not be in line with the appraisers value. If the home you want to purchase is going for $500,000 and the appraised value is $480,000, you have to come up with $20,000 PLUS the 5% down payment in order to make the deal work.
Finally, with all the potential problems that can arise, it’s best to contact a Dominion Lending Centres mortgage broker before you start the home search to make sure that you have your ducks in a row.

By David Cooke

21 Jul



Posted by: Mike Hattim

We are all familiar with the banks and local credit unions, but what are monoline lenders and why are they in the market?

Mono, meaning alone, single or one, these lenders simply provide a single yet refined service: to fulfill mortgage financing as requested. Banks and credit unions, on the other hand, offer an array of other products and services as well as mortgages.

The monoline lenders do not cross-sell you on chequing/savings account, RRSPs, RESPs, GICs or anything else. They don’t even have these products and services available.

Monolines are very reputable, and many have been around for decades. In fact, Canada’s second-largest mortgage lender through the broker channel is a monoline lender. Many of the monoline lenders source their funds from the big banks in Canada, as these banks are looking to diversify their portfolios and they ultimately seek to make money for their shareholders through alternative channels.

Monolines are sometimes referred to as security-backed investment lenders. All monolines secure their mortgages with back-end mortgage insurance provided by one of the three insurers in Canada.

Monoline lenders can only be accessed by mortgage brokers at the time of origination, refinance or renewal. Upon servicing the mortgage, you cannot by find them next to the gas station or at the local strip mall near your favorite coffee shop. Again, the mortgage can only be secured through a licensed mortgage broker, but once the loan completes you simply picking up your smartphone to call or send them an email with any servicing questions. There are no locations to walk into. This saves on overhead which in turn saves you money.

The major difference between a bank and monoline is the exit penalty structure for fixed mortgages. With a monoline lender the exit penalty is far lower. That is because the banks and monoline lenders calculate the Interest Rate Differential (IRD) penalty differently. The banks utilize a calculation called the posted-rate IRD and the monolines use an IRD calculation called unpublished rate.

In Canada, 60% (or 6 out of every 10) households break their existing 5-year fixed term at the 38 months. This leaves an average 22 months’ penalty against the outstanding balance. With the average mortgage in BC being $300,000, the penalty would amount to approximately $14,000 from a bank. The very same mortgage with a monoline lender would be $2,600. So, in this case the monoline exit penalty is $11,400 less.

Once clients hear about this difference, many are happy to get a mortgage from a company they have never heard of. But some clients want to stick with their existing bank or credit union to exercise their established relationship or to start fostering a new one. Some borrowers just elect to go with a different lender for diversification purposes. (This brings up a whole other topic of collateral charge mortgages, one that I will venture into with another blog post.)

There is a time and a place for banks, credit unions and monoline lenders. I am a prime example. I have recently switched from a large national monoline to a bank, simply for access to a different mortgage product for long-term planning purposes.

An independent mortgage broker can educate you about the many options offered by banks and credit unions vs monolines.

By Michael Hallett

19 Jul



Posted by: Mike Hattim

I met with a client recently who wanted to get a pre-approval before he sold his home. His neighbour is a very grouchy man who causes my client and his family a lot of stress. He just wanted to sell his home and move into a new one away from this situation. I had to tell him no and explain that although he has good credit and a very stable job he does not qualify under the new rules. He was saddened to hear that and is now faced with a decision of should he stay and put up with the situation or should he rent out his home and then he himself rent somewhere else.
(Thank you, sir, for allowing your story to be shared)

What happened to cause this? Late last year the federal government made another round of changes to the mortgage rules. This was after we have already seen many previous rule changes over the last seven years. They dramatically increased the qualification rate with the intention that people be able to handle a higher mortgage payment when rates start to rise. They were also attempting to cool the hot real estate markets in Vancouver and BC. Additionally, they changed which properties can be insured which has meant that people with more than 20% equity in their homes have fewer choices of mortgage lenders and/or higher rates. Since that time, they have also increased the mortgage default insurance premium and tightened up lending guidelines. Before the dust has settled on those changes we have been told that further changes are under consideration.

Here is what we need from you. If you or someone you know have been adversely affected by the mortgage rule changes we need you to speak up. Let’s take our freedom of speech for a spin and let our MP’s know of how specific Canadians are being negatively impacted. TELLYOURMP.CA is the site set up that you can easily visit and share your story. Maybe you were turned down or unable to buy a home large enough or in a safe community for your family. Maybe a job loss or divorce means you are looking to purchase on a single income. Whatever the case, please speak up. Visit this website, write a letter, call your MP.
They are doing their best to keep the Canadian economy as strong as it can be but we are seeing a lot of unintentional negative consequences and good Canadians in ALL of Canada are being adversely affected.
TELLYOURMP.CA It will not take you long and it goes directly to your MP. The mortgage industry and all the banks and mortgage lenders are on record but they need to hear from the actual Canadians this is touching most.

Tell your story and don’t spare the details. Speak now in regards to the fallout from the last round of changes and ask for a cooling period before any further changes are implemented. Ask they consult with the wider financial community for input. We need all of you. Whether you are a first-time home buyer, unable to refinance to the best rates, cannot buy that next home you wanted, saw someone you care about be turned down OR if you are a part of an industry adversely affected. Let’s get noisy Canada!

By Pam Pikkert

17 Jul



Posted by: Mike Hattim

For many people, a home will be the largest purchase of their life. It stands to reason then, that when you are shopping around for your mortgage you will want to take certain steps to ensure you are getting the sharpest rate and best product. We have a few pointers to make you a savvy shopper when you are out looking at different mortgages—get ready to take a few notes.

1. Do not always rely on the bank for the sharpest rates
Mortgage Brokers can often beat the bank rates by using different lenders. They can also often get you a SHARPER rate at your own bank simply because of the high volume that they do with them. Brokers have access to a number of different lenders giving you more options for not only the best rate, but also the best product for YOU.

2. Know your credit score
Your credit score is a large factor in your mortgage application. You need to know where you stand with your credit BEFORE you begin the process of shopping. All lenders will look at your credit history and score first then they build a file around that. A mortgage broker can obtain your credit score in mere minutes-all you have to do is ask.

3. Make it a one-stop shop
Avoid shopping from institution to institution. You may think that more options lead to better rates, but in fact lenders will frown upon you having your credit score pulled multiple times. This is where the benefits of using a broker come into play. They will pull your score ONE time only and use that to shop around with lenders for you. Really, it’s like having your own personal shopper!

4. Understand that the market will change.
Starting the shopping process knowing that the market you qualify in TODAY will adjust is key. Rates might be low right now, but new rules and implications can change things when you are up for renewal. Understand that you MUST be able to carry your mortgage payment on at a higher rate if new laws are put in place.

Keeping these 4 Savvy Shopper tips in mind when you are shopping for a mortgage can help set you up for success not only today, but for the future as well. Mortgages are not only about finding the best rate-but finding the best product too. A Dominion Lending Centres mortgage specialist can work with you and your unique situation to find you the best product for you—and as an added benefit do the shopping for you!

By Geoff Lee

14 Jul



Posted by: Mike Hattim

In light of recent events in the news, it only seems natural to start talking environment. While there are those who still don’t believe in global warming, hard scientific data shows the seas are rising. Not only that, this trend will continue full steam ahead into the foreseeable future. So, whether you currently own waterfront property or are simply dreaming about it, there are real concerns to be aware of. Here I’ve compiled (almost) everything you need to know about global warming and waterfront property.
When we hear the term “flooding the market” we don’t normally associate it with tsunamis or soil erosion. But for coastal dwellers all over the world, this is reality. Just a few months ago The New York Times published an article on the perils of climate change for real estate. They didn’t mince their words either. In it, a number of economists reported their predictions. Primarily that “the economic impact of a collapse in the waterfront property market could surpass that of the bursting dot-com and real estate bubbles of 2000 and 2008.”
According to Coastal Zone Canada (CZC), over 7 million Canadians, or roughly 20% of us, live in coastal areas. This includes the Atlantic, Pacific, Arctic and Great Lakes. With more than 240,000 km of coastline, 70% of which is found in the north, Canada has more waterfront than any other country in the world. And, as the CZC points out on their website, human activity “many kilometres away can ultimately have profound effects on the coast.” Not only are coastal ecosystems exceptionally vulnerable to climate change and natural disasters, so are the livelihoods of those who make a living from their resources.
The Canadian Disaster Database reports that storm events causing “significant damage” are more common along the east coast than any other. Though there are no shortage of examples here in BC. In 2009, the Fraser Valley and Metro Vancouver suffered severe rainstorms for a period of 3 days in January. This caused flooding, mudslides and landslides that went on until the month’s end. Altogether, the estimated cost of damages was approximately $16.5 million.
But what does that mean for current or would-be waterfront homeowners?
Primarily designed to tackle sea-level rise and coastal flooding, recent BC projects have made steps in the right direction. These include upgrading Metro Vancouver’s dike system, and the placement of protective boulders off the coast of West Vancouver. As outlined in the Government of Canada’s Marine Coasts in a Changing Climate, coastal erosion and flooding has historically been combated by building seawalls and dikes. But if we are to truly adapt to a changing climate, we’re going to have to change our mentality as well.

Adapting means using a combination of measures. For example, ‘soft-armouring’ is a term that refers to a number of less aggressive measures. This includes:
• Maintaining and restoring beaches, marshes and coastal vegetation: can help soften the blow from tides and storms.
• Restoration of salt marshes: work to halt soil erosion.
• Use of clean dredged sand to replenish protective beaches: preventing further erosion.
• Managed retreat: though usually a “last resort,” this option involves planned abandonment and gradual relocation of assets based on future risk assessment for natural hazards.
Soft-armouring is thought not only to be more efficient and less financially costly, but more sustainable over the long-term.
Gibsons, B.C. is an interesting example of a town following this protocol. It’s new development plans factor in both sea-level rise and the possibility of future flooding. If you are looking into waterfront property, it is essential to look into whether the area has a climate change program. A local government that understands what climate change is can make informed decisions with respect to real estate.
Also look into local regulations, bylaws, and zoning and building codes. See if there are policies to deal with infrastructure and vulnerability. This should include a plan for managing changes like ocean acidification, storm surges, adaptation and preparedness for coastal change. In your home structure it’s important to look into what your storm-water drainage system is capable of handling. Perhaps, look about 30 or 40 years into the future of the area. While you might not stay in the same home for all that time, it’s likely you will remain in the same community.
Adequate planning, preparedness and throwing your naiveté out the window is a good start. Because even when the biggest storm arrives, you will not be the one caught with your eyes closed.

By Atrina Kouroshnia

13 Jul



Posted by: Mike Hattim

I recently read an article by Jamie Hopkins in Forbes magazine, entitled “Americans Don’t Even Know What Their Most Important Retirement Asset Is.”
The article highlighted three common misconceptions about reverse mortgages and unsurprisingly, they are prevalent in Canada as well as in the U.S.
Top 3 misconceptions about Reverse Mortgages:
1. The bank owns your home.
2. Your estate can owe more than your home
3. The best time to take a Reverse Mortgage is at the end of your retirement

Let’s examine each misconception in more detail.

1. The bank owns your home.
Over 50% of Canadian homeowners over the age of 65, believe the bank owns your home once you’ve taken a reverse mortgage. Not true! We simply register our position on the title of the home, exactly the same as any other mortgage instrument, with the main difference in the flexibility of not having to make P&I payments on the reverse mortgage.
2. Your estate can owe more than your home.
A reverse mortgage, unlike most traditional mortgages in Canada, is a non-recourse debt. Non-recourse means if a borrower defaults on the loan, the issuer can seize the home asset, but cannot seek any further compensation from the borrower – even if the collateral asset does not fully cover the full value of the loan. Therefore, when the last homeowner dies (and the reverse mortgage is due), the estate will never be responsible for paying back more than the fair market value of the home. The estate is fully protected – this is not the case for almost any other mortgage loan in Canada, which is full recourse debt. So read the fine print the next time you offer to co-sign for a loan for mom!
3. The best time to take a Reverse Mortgage is at the end of your retirement.
This is a common mistake that reflects an “old-school” financial planning mentality. For the majority of Canadians (without a nice government pension), the old school financial planning mentality is about cash-flow, and is as follows:
a) Begin drawing down non-taxable assets to supplement your retirement income.
b) Once your non-taxable assets are depleted, begin drawing down more of your registered assets (RSP/RIF) to supplement retirement income.
c) Once your registered assets are depleted, sell your home, downsize and re-invest to generate enough cash-flow to last you until you die.
The problem with the “old-school” financial planning model is two-fold:
1. 91% of Canadian seniors have no plans to sell their home (CBC News “Canadian Boomers Want To Stay In Their Homes As They Age).
2. You are missing out on a huge tax-saving opportunity by not taking out a reverse mortgage in the beginning of your retirement.
“Research has consistently shown that strategic uses of reverse mortgages can be used to improve a retiree’s financial situation, and that reverse mortgages generally provide more strategic benefits when used early in retirement as opposed to being used as a last resort.” – Jamie Hopkins, Forbes
In Canada, a reverse mortgage can be set-up to provide homeowners with a monthly draw out of the approved amount. For example: client is approved for $240,000 and decides to take $1,000/month. This is deposited into the clients’ bank account over the next 20-years. Interest accumulates only on the amount drawn (ie: not on the full dollar amount at the onset).
This strategy allows clients to draw down less income from their registered assets to support their retirement lifestyle. In turn, this can create some excellent tax savings, since home equity is non-taxable. Imagine lowering your nominal tax bracket by 5 – 10% each and every year over a 20 year period? The tax savings can be huge. You are also able to preserve your investable assets, which historically, can generate a higher rate of return when invested over a greater period of time.
In summary, Canada and the U.S. both have aging populations and both have misconceptions about reverse mortgages. Learning about these misconceptions will allow you to offer your clients the best advice on how to balance retirement lifestyle and cash-flow, with the desire for retirees to age gracefully within their own homes. If you have any questions, please contact your local Dominion Lending Centres mortgage specialist.

By Roland Mackintosh

12 Jul



Posted by: Mike Hattim

Mortgage brokers have a reputation as superheroes. Although we cannot leap tall buildings in a single bound we can do extraordinary things.
Is the down payment money coming from outside of Canada? I had a client who had a joint account with her father in Japan. She showed me bank statements with the money in the account and leaving Japan. I had another bank statement showing the funds coming into her Canadian account. Finally I showed the foreign exchange rate for that day from Yen to CAD. The bank accepted this as a suitable paper trail.
An unusual down payment source? I had a client who sold his vintage Cadillac for his his down payment. A copy of the registration, the bill of sale and a bank statement showing the funds going into his account was deemed fine by the bank.
Is your down payment coming from multiple sources? I recently had two brothers purchasing a home together. They both had their money in RRSP’s and TFSAs. It took some explaining but we were able to show all the down payment and closing costs coming from four different sources.
Several years ago I had a client defaulting on two mortgages. Foreclosure was just days away.
I was able to consolidate the two mortgages, pay them out and get a reasonable payment schedule for one year. After the year , I moved him to a regular lender and arranged for a line of credit so that he could pay for some home renovations with a low interest rate secured against his home.
I had a couple who wanted to buy a home. The husband had had a business failure and it had affected his credit. I could only use the wife’s credit and her income for this purchase. She was a foster mother with six children. Her income was good but not high enough. I was able to get the lender to gross up her income by 25%, as her income was tax free. This was enough for them to buy a large home for the couple and their foster children.
Small towns can also pose unique problems. I had a client who wanted to refinance his home. I checked his credit report and found a credit card that he did not have. He told me that there were five people with his name in this small town. He also revealed that he had an account at Home Hardware that was not reporting on the credit bureau. The manager was a friend and thought that the loan would hurt his credit so they made an informal arrangement to pay it off.
Did I mention that he had three jobs? He worked as a tire installer, and invoiced the company from his firm. I was able to get a lender to accept this client his varied income and got the mortgage . Come to think of it , perhaps mortgage brokers are superheroes. If you have a difficult situation the best person to speak to is a Dominion Lending Centres mortgage professional, if it can be done legally, a broker can do it.

By David Cooke