27 Nov

5 Reasons to use a mortgage broker


Posted by: Mike Hattim

1. Mortgage solutions are their area of expertise

You need to find a mortgage, or refinance an existing one, but you have questions.

  • Where do I start?
  • Which lender best fits my needs?
  • Which lender can offer me the best value?
  • Are there really differences between mortgages?
  • Which features are best for me?

Brokers have experience working with banks and other lenders. They understand the benefits of the various rate options, and they’re familiar with the many types of mortgages and which one might be right for you.

Your broker has the answers.

2. Your broker is your champion

Your broker negotiates with the lender on your behalf, manages obstacles, processes paperwork and hammers out the details.

They’ll help simplify what can be an overwhelming experience and take your long-term plan
into consideration.

Your broker is on your side!

3. Personalized service

Your broker will work with you through every step
of the purchase or refinance process. They’ll walk you through the application process and help you to understand your options and answer your questions.

After all, your broker’s success is dependent on your satisfaction.

4. Your broker finds solutions that fit your needs

Your broker will help you navigate the confusing
road map of rate types, mortgage options and terms
to decide which solution is best for your circumstances and long term plan. Your broker takes the time to understand your financial needs and situation, and avoid unnecessary risk.

And that can save you money.

5. Your broker can save you time – lots of time

House hunting is time and energy consuming. But that’s just the beginning. Finding a mortgage or refinance solution that’s right for you can take hours, even days or weeks. Your mortgage broker does most of the leg work for you. They’ll research mortgage, financing and lender options, process the application and document requirements, and negotiate with lenders.

That means less disruption to your daily schedule and more time to focus on your home


27 Nov



Posted by: Mike Hattim

Buying a home is one of the biggest financial decisions you will make, especially if you are buying your first home. So it is important to know your current financial situation and ensure you buy a home you can afford while still enjoying your life. For that reason I always recommend all home buyers talk to your mortgage broker first to get pre-qualified for a mortgage and secure a rate hold before you shop for a home. This way you will know what range of home prices are best for you and deal with any potential pitfalls for qualifying beforehand.

To get pre-qualified for a mortgage you will need to review the following with your Dominion Lending Centres mortgage professional:

Personal information, including identification such as your driver’s license, marital status, birth date and social insurance number (for credit purposes).

Details on your source of income (job or self employment) and proof of your hourly/salary, job position and length of employment. If you own other rental properties, the proof of income from these properties will be required (lease agreements and/or tax returns).

Information about your financial assets (savings, investments, other properties, vehicles), current liabilities (loans, credit cards, other mortgages).

Your source of down payment (minimum 5% for owner occupied home and 20% for rental properties). Details on sources of down payment will be covered in next week’s blog post.

Proof you have enough money to cover the costs of closing the sale typically 1.5% of the purchase price.

If you are separated or divorced, have any history of financial difficulty. If you own a business or are on title to other properties – or anything that could impact your current financial situation, it is essential to share that information with your mortgage broker to ensure you can get pre-qualified for a mortgage. Through open communication I can get a better picture of your situation and advise you of the best options available. If we uncover issues that have not been disclosed, it could impact your ability to get pre-qualified for a mortgage, causing you undue stress and could cost you money in the end.

Once the application is complete and we have established the best options and plan moving forward, we can secure rate holds for you and collect all documentation required to ensure a pain-free approval process when you have an accepted offer.

Get in touch with us at Dominion Lending Centres so we can help!

26 Nov



Posted by: Mike Hattim

Very often, the first question is “what can I afford”. To answer this for a person getting ready to buy, we need to know about what is happening now, income, bills, savings, credit score etc. There are many positive things that you can do in the year or two prior to buying.

It is always best to consult with a Mortgage Broker well in advance to get started on the right path to becoming a home owner. If you already have some savings set aside, then you already have a great head start!

Here are some simple notes and tips to get you well on your way.

Special Income Note:

If using commission, lenders want to see a 2 year average income for commission/bonus income to use it at all. So file your Taxes each year and keep your NOA, Notice of Assessment that is mailed to you.

Down Payment:

You need to have a minimum 5% of the purchase price Down Payment and 1.5% of purchase price in your own funds. This CAN be gifted from an immediate family member.


$300,000 home = $15,000 minimum Down Payment, plus $4,500 for Closing costs

$200,000 home = $10,000 minimum Down Payment, plus $3,000 for Closing Costs

Co-signer or Co Borrower:

IF you can have a parent with good income and credit go on as a guarantor for your mortgage, then we can add their income to the file to strengthen your position.

IF you have a partner/co borrower, then their income, credit score etc. can be added to the mortgage as well to strengthen the file.

Budgeting – Try Mint.com – Free:

Start tracking your expenses, start with what you think you spend and see/track the reality (1-2months!) Set up bill date reminders and get notifications on your cell phone when you go over budget!

Find and stop the bleeding; unnecessary spending that can add to your savings.

NOTE: 3% of all unsecured debt has to be used as payment – even though reality payment is lower. $10K on a credit card = $300.00 payment and nearly $75,000 less mortgage buying power!!!

Crazy…..pay them down as much as possible!

Saving in RRSPs :

Save on Income Tax for filing next spring, lock it away!

Able to use up to $25,000 each TAX FREE as a First Time Home Buyer on a qualifying home value. Once you know what you can save per month, we can make it automatic (like a bill payment) OR you can save organically and then deposit every month or two into your RRSP account.

CALL ME – I have access to full line of Bank Products; RRSPs, TFSAs, Lines of Credit, Visa etc.

Check your Credit Score:

Equifax Customer Inquiries 1-800-465-7166

Pull your own credit bureau. Identify any errors or issues and fix now. You can call me when you get it, we can review and I can provide some tips on how to improve if need be!

Pay all bills on time, more than minimum payments!

Use NO MORE than 50% of available limit on cards – Going over 65% of limit reduces your score – EVEN if you are NOT over limit! Easy TIP: Pay on time and pay down debt a bit over next few months….then call to increase your limits! This will lower your % of credit utilization immediately for free and be a plus to your credit score.

Become a Rock Star that any lender will want to work with!

I really hope that this helps you in starting forward progress – starting is the hardest, but then it quickly becomes normal. Remember – we here at Dominion Lending Centres are here to help!

25 Nov



Posted by: Mike Hattim

Paying off your home should be a priority, no arguments there. Are you concentrating on that goal so much that other retirement savings plans are on the back-burner until you’re comfortably mortgage free? Does this give you a level of diversity that protects you from economic or market fluctuations?

There are two schools of thought on this issue. One is that if you are mortgage free not only will you have a low cost home when you retire, you will have a large asset that will hold its value and give you a reliable nest egg when you’re ready to down-size. That’s definitely a solid plan.

The other view point is that by putting all your eggs in one “nest” this means you are limiting your ability to maximize on other, possibly more lucrative, investment vehicles that could put you further ahead come retirement.

If you are making extra payments towards your mortgage but not investing in an RRSP, is that the best way to go? If you put lump sum payments on your mortgage or double up or increase payments regularly, you could be shortening the life of your mortgage at the cost of other benefits.

For example, if you were to invest in an RRSP, the tax break you get by way of a refund would make a nice little lump sum mortgage payment each year, while building up a tax deferred savings account.

Another option, if you have significant equity in your home, is to get your home working for you.

Home Equity Lines of Credit (HELOCs) are separate from your actual mortgage. They give you on-going access to your equity. The Government of Canada restricted HELOCs to 65% of your home’s value. But for the right client, the HELOC can be a powerful investment tool.

Being separate from your mortgage, you can use a HELOC strictly for investment purposes and therefore, any interest you pay on funds drawn from that credit line can be written off.

Some savvy homeowners will use a HELOC to buy an investment property with a level of mortgage and property costs that can be supported by the rental income generated from that property. Thus they have a self-sustained investment building yet another nest egg.

Other owners draw on the credit line to make short-term, high-return investments that they then cash in to pay off the credit line and put any earnings from the investment itself back onto their original mortgage. The Smith Manoeuvre is a shining example of this technique.

There are lots of different ways to look at the retirement issue and each plan needs to be built around your lifestyle and goals. A comprehensive analysis by your Dominion Lending Centres mortgage professional, a financial planner as well as a consultation with your accountant is highly recommended.

24 Nov



Posted by: Mike Hattim

As politically popular as it is to spew “soak-the-rich” rhetoric during an election campaign, the reality is that it is a very inefficient way to raise revenues or to address income inequality. Indeed, it will actually shrink the economic pie. It provides a disincentive to entrepreneurial spirit and work effort and it will make it more difficult for Canada to attract and keep its most productive talent, particularly in light of the much lower tax regime in the United States.

Our tax system is already highly progressive and it will be more so when the federal government reduces tax rates for the middle class. The reduction in middle-class tax rates is desirable because it will increase disposable income and spending for a group that has experienced little income growth in recent years.

The proposed tax hike for high-income earners is not desirable. The higher the tax rates, the higher the incentive to avoid them. There is already a good deal of planning going on by affluent taxpayers to adjust their finances in such a way as to avoid or at least minimize the effect of the proposed tax increases on people earning $200,000 and above. In consequence, the actual revenue gain associated with such a move will likely be far lower than the government has predicted. Tax planning can involve such things as rearranging sources of income, changing jurisdictions, legally using foreign trusts or changing the timing of the sale of capital assets. These actions will line the pockets of the accountants, tax lawyers and financial planners, but will do little to increase tax revenues or reduce income inequality.

Several provinces have already imposed heavier tax rates on higher-income earners, so that if the federal proposal to raise top marginal tax rates by four percentage points is implemented, marginal tax rates for these individuals will be above 50% in many jurisdictions (Table 1, from C.D.Howe Institute E-Brief, November 19, 2015).

Targeting High-Income Earners Will Backfire

Not only are these proposed top marginal income tax rates high enough to dampen potential growth rates, but dividend tax rates and capital gains tax rates will rise as well. For example, top marginal dividend tax rates in Ontario will rise from 33.8% to nearly 40% and top marginal capital gains tax rates will rise from 24.8% to 26.8%. In contrast, the top dividend tax rate in the U.S. is 28.6% and only 23% in the OECD. The average capital gains tax rate in the OECD is 18.4%. This will discourage business and personal investment in Canada and provide an enormous disincentive for innovation and job growth.

The market for top talent is global and raising Canadian taxation will make it more difficult for Canada to compete.We run the risk of a brain drain and it will be more difficult to attract foreign talent, particularly given the depreciation in the Canadian dollar. Thus, excessive taxation is self defeating and does not generate the tax revenue that some expect.

According to a recent study by the C.D. Howe Institute,” the proposed 4 percentage points tax increase on incomes above $200,000 could result in those affected taxpayers reporting approximately 4.5 percent less taxable income, costing the personal income tax base $7.3 billion in 2016. This erosion of the tax base could reduce projected tax receipts from the hike by about 70 percent; delivering to the government only about $1.0 billion of a potential $3.3 billion. The erosion of the tax base also means that provincial governments could also suffer from lower-than-otherwise personal income tax revenues – a non-negligible shortfall of $1.4 billion in 2016″.

The best way to reduce income inequality is to provide the necessary training and relocation assistance to disadvantaged workers and to remove barriers to opportunity.

The Canadian economy is under performing, damaged by the dramatic decline in oil and other commodity prices. The Bank of Canada has reduced interest rates twice this year, but now it is time for real fiscal stimulus–government spending increases and tax cuts. Our government debt-to-income levels are among the lowest in the OECD. We can afford to invest in our future by creating the environment necessary to boost innovation and technological prowess that assures Canadian prosperity in the future.

23 Nov



Posted by: Mike Hattim

THIS JUST IN, MORTGAGE INTEREST RATES ARE…..and there it is again…headline news about another low rate from one of the main lenders. But what does it all mean and why does it continue to grab the headlines on the evening news?

It probably comes as little surprise that mortgage financing in Canada is big business and very competitive business. When you sit back and think about it for a moment you’ll probably start to realize that all of those headings, almost every one of them, are talking about the low rates. “Great no frills Special”, “Employee Pricing”, “First Lender to drop their rate”. For the most part Media puts the focus on the interest rate and as a result mortgage consumers are geared…or better yet, are driven to make the interest rate the first and only thing they ask their mortgage specialist about.

Now don’t get me wrong, the interest rate is a big part of the conversation you should be having with your mortgage specialist. It is, after all, the cost you’re paying to borrow the funds. However, the conversation should never stop at just the interest rate. There are a number of other key details that you should understand, as a mortgage consumer, before you sign on the dotted line.

The conversation should focus on what your plans are over the next few years (paying special attention to the time frame that is reflective of your mortgage term length). Have you thought about any of the following?

1. What are the chances you will experience a job change over the term of the mortgage? (lay off, role change, transfer, etc.)

2. Do you have any major life changes in the near future (getting married, new child, etc.)

3. How about major expenditures? (Wedding, expanding family, replacing a vehicle, etc.)

These are just a few important details that your mortgage specialist is likely to want to know about. How you answer those questions will likely impact the recommendations they have for you with regards to lender or term.

So what gives? How will knowing those details impact their term/lender recommendations?

Well to sum things up, they want to know how to save you money upfront but also over the term of the mortgage. Lump sum payments and portability options are just two ways that they make this possible. In addition, knowing if there are any special restrictions or how the pre-payment penalty is calculated, can save you thousands should you have to break your mortgage term early.

The bottom line?

When it comes to mortgage products, there is way more to the decision than simply the rate. It is important to understand restrictions, flexibilities and how the pre-payment penalty is calculated. Never simply assume that the lender with the lowest rate is the best. Sometimes it will be, sometimes it won’t…When shopping for apples, don’t buy lemons…you probably won’t be happy with the outcome. We here at Dominion Lending Centres are ready to help!

20 Nov



Posted by: Mike Hattim

With a competitive market in full force, banks and credit unions are offering rates for their mortgages with free legal fees. Before you sign on what seems to be a great offer, take a look at the numbers and see what a mortgage with free legal fees is really costing you.

This is one of the first times in history you can find fixed mortgage rates at the same or similar rates to a variable rate mortgage. So all the lenders are competing with this product and using marketing campaigns, including special offers, to attract borrowers. With 5 year fixed rates around 2.79% the credit unions and major banks offering higher rates from 2.99%-3.04% are looking for ways to sway customers to them. The latest promotion is a mortgage with free legal fees. On paper it sounds attractive, saving you money up front when you don’t have to pay for an appraisal or legal costs. But when you look closer, consider this.

1. The offers include legal fees. This represents less than $500 of your legal bill as other costs such as title registration, disbursements and taxes will not be covered by this offer.

2. The offer includes appraisal fees. Most non-bank lenders do not require an appraisal or will utilize a general valuation system in lieu of a full appraisal. For those lenders who do require an appraisal the cost is less than $300.

I recently had a client come to me who had an offer for free legals with the rate of 3.04%. When we calculated the difference between a rate of 3.04% and no legal fees versus a rate of 2.89% with the client paying their own legal fees (no appraisal required), the savings to the client over 5 years going with the lower rate was $5,000! So the mortgage with free legal fees was not a good deal.

Offers for a mortgage with no legal fees stating “save up to $1,500 on legal and appraisal fees” are no savings at all. Yet these campaigns attract many home buyers. Always check with us at Dominion Lending Centres to compare the best mortgage for you which includes the terms, conditions, rate and penalty costs before you sign anything – it could save you thousands of dollars in interest and help you pay off your mortgage years sooner.

20 Nov



Posted by: Mike Hattim

Online access to information is fantastic! The ability to understand a glossary of terms and products out there is amazing when compared to even a decade ago. I love “Googling” and finding how to fix my car, or how to engage in my do-it-yourself home projects. I feel more informed and gain confidence embarking on new tasks.

Increasingly common is clients searching rates online or receiving rate updates via email and concluding that these are the rates they can get. The reality is that every person’s situation is unique and the property, or their scenario, may not allow for such a rate or product to be truly on the table.

The most common is that a better rate will be offered to a client with 5% down payment than one with a 20% down payment, which seems absurd on the surface, yet you have to understand that the mortgage with only 5% down payment is insured by CMHC, Genworth or Canada Guarantee. This mortgage insurance protects the lender against default, lowering lender risk and exposure, which is why a 5% down client can obtain a rate 0.05 – 0.10% better than the conventional client with more equity or skin in the game!

Other examples of factors impacting rate include lender perceived risk such as rental properties, self-employed clients, pre-approvals and credit issues. These examples can see a 0.10% to 0.50%+ surplus in posted rates.

Not to discourage folks from looking online at rate sites at all – it is important for clients to know that there are different business models out there within the Mortgage industry. There are many reputable online Brokerages that offer some low rates based on high volume alone. Volume and buying power are great and there are some clients and files that work really well in this space. One should also realize the importance of personalized professional service, future planning and that not all mortgages are created equally, nor is the service level.

There are cases where lower rate products come with restrictions or an online model fails to include your three to five year planning. Some low rate options are accompanied by high interest penalties such as 3% mortgage penalty – EVEN on a variable! I rescued a client from a mortgage they obtained online, hamstrung just like this with a contract rate over 3%; the penalty was over $20,000. I was able to get the penalty reduced, restructure all of their finances, refinance that mortgage and they were able to obtain their second home. Something that would not have been possible given the “deal” they thought they received originally.

Some offers have a cash back component with much higher contract rates than the discounted rate and are applying the cash back as a mortgage prepayment to arrive at a lower “effective” interest rate. Other lenders are offering a lower rate on the surface but the payment is based on a higher rate with higher payments. Most Cash Back mortgage rates are higher than that of a Line of Credit. With a Cash Back mortgage, you have to pay the penalty if you break the mortgage and in addition, you may have to repay the cash back advanced portion! This is still often true when used to prepay the mortgage down from the outset. I have seen set ups like this potentially cost way more in the end and prevent friends or clients from making a life change.

For Example:

Exposure to Penalties/Repayments – using a $300,000 mortgage

Low Rate Product at 2.10% with a Penalty of 3%; $9,000

Regular Variable product at 2.20% with 3 months interest Penalty; $1,500 approx.

The payment difference is approximately $28.00/month or $1,730 in five years, which looks great at first, yet the exposure to the penalty risk should not be overlooked.

Here is one example of the fine print on one offer a client recently brought to my attention:


Reading above, definitely some considerations that may or may not apply to your situation! Once noted, it clearly was not an option for my client.

Anyone can work on a mortgage alone, however, I prefer to drill down to feasible future planning and ensure that you are able to accomplish what you intend to beyond one mortgage. I am a full service broker who will have your best interests in mind prior to pushing any file!

Unlike unlicensed bank mortgage specialists, my job as a Mortgage Broker with Dominion Lending Centres is not to sell you a mortgage; it is to advise you on your options and to help you understand the implications of your choice. I truly hope this helps you in seeing both the differences and potential pitfalls of the rate game.

Ultimately, it is your home and your mortgage. I advise – you instruct!

17 Nov



Posted by: Mike Hattim

Brad and Brenda have been putting some money in their RRSPs investments for the last four years. Their last statement shows that they have $12,500 in their RRSP’s savings, and they also have $5,000 in the bank in their savings account.

They decided to buy a starter home in Winnipeg, MB for the price of $250,000. According to their investments statement, they had enough money in their bank and RRSP account to put 5% down ($12,500) PLUS closing costs of 1.5% ($3750) of $250,000. If we add down payment and closing costs together, it comes to $16,250 – this is the amount they needed to buy this starter home.

They deposited $5,000 with an offer; their offer got accepted since their RRSPs investment statement shows another $12,500. They filled out the forms to withdraw all the investment money for the down payment. Once the money from their RRSP investment was transferred into their bank account, it had a $2,100 shortfall. Now Brad and Brenda has $14,150, but they need $16,250 to buy this home. Some funds do better than other funds – it totally depends on an individual portfolio.

Brad and Brenda must have knowledge of the actual amount in their RRSP investments instead of depending on investment statements.

Their meeting with a mortgage professional from Dominion Lending Centres could steer them in the right direction.

16 Nov



Posted by: Mike Hattim

There you are, sitting down with your realtor and preparing an offer to purchase for that amazing home that you just looked at this afternoon. You get to the point in the conversation with your realtor about the need for a financing condition and you’re trying to remember what you talked about with your Mortgage Broker earlier in the week….were you approved? Pre-approved? Pre-qualified?

So here’s the thing, when it comes to placing an offer on a new property, the financing condition should always be there. The only reason for leaving the financing condition out of an offer is because you know that you could dip into your savings account right now and buy the house with cash if you had too.

If you cannot purchase the house with cash, then you really should have that pesky finance condition in the offer and here is why…

We know already that you’ve met with your Mortgage Broker, they have everything on file and they have told you that you’re pre-approved. It is important to understand that the pre-approval they issued is based on the information they have collected about you. However, they have no information about the house that you’re eventually going to purchase.

When your future lender reviews an application in full, there are two sides to your application. There’s you and then there’s the house. It’s important to note that the lender is investing in the whole package and at this point, no one knew what house you were going to buy. Your Mortgage Broker isn’t likely to receive any information on the specific property until you have an accepted offer. It is at that point when they will update your application and send in all of the details for a formal approval.

So you’re now wondering why all of this matters considering that during your pre-approval meeting your Mortgage Broker told you that you’re the perfect clients (great income, great credit, great down payment and just all around great people).

But what about the property? The lenders (and CMHC if you have less than 20% down) want to know that the same is true about the house you’re buying. Here are just a few questions that they are asking themselves about the house:

  • Is it being purchased for fair market value?
  • Is it located in a marketable neighborhood?
  • Are there any major or obvious defects that could affect its value
  • Is the house a previous grow op?

If something negative about the house comes back as part of the review, it could mean that the lender (or CMHC) could decline to finance the property. The financing condition gives you a way out of the agreement should something happen at this point. If you don’t have a financing condition, you could end up being legally tied to purchasing the home, with or without financing lined up. Definitely not a position you want to be in, so take the time to protect yourself by ensuring your offer to purchase includes a financing condition – and speak with us at Dominion Lending Centres.