29 Feb



Posted by: Mike Hattim

At some point in their lives, most Canadians have probably asked themselves whether it is better to buy or rent a home. Purchasing a home is one of the biggest decisions most people ever make so the impacts of the decision can be HUGE.

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.

If you do decide that home ownership is right for you, it’s important to choose a home you can afford. If you can’t afford to buy your dream home, purchasing a more modest home can be a great place to start building equity that one day may allow you to buy the home of your dreams.

Since we’re currently in a buyer’s real estate market and interest rates have been dropping, now may be an ideal time to enter into home ownership for the first time.

Some disadvantages of buying a home

Since it’s easy to get caught up in the excitement of buying a home, it’s important to remember that home ownership has some additional responsibilities as well.

For one thing, a home can be expensive. Chances are, your monthly payments will be more than what you are currently paying in rent when you factor in such things as your mortgage, property taxes, repairs and general maintenance.

Owning a home ties up some of your cash flow and is likely to reduce your flexibility to move to a new location or change jobs.

While your home might increase in value as time goes by, don’t expect to get a big return quickly. There are no guarantees that your home will increase in value, particularly during the first few years. In the beginning, you could actually lose money if you sell because your home may not have appreciated enough to cover the real estate fees, moving, renovation and other selling costs.

Real estate is, however, usually considered a good investment over the long term.

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, Dominion Lending Centres mortgage professionals can answer all of your mortgage-related questions.

23 Feb



Posted by: Mike Hattim

When you are searching for a mortgage, you shouldn’t only base your decision on rate. It is important to search for the “best mortgage”. A mortgage that not only provides the best interest rate, but also the one with the best terms and conditions. By understanding mortgage terms and what they mean in dollars and sense, you can save the most money and choose the term that is best suited to your specific needs.

With a closed term mortgage, you can’t pay off your mortgage before the end of the term without having to pay a penalty.

The pre-payments without penalty clause is one of the conditions that can save you a considerable amount of money in the long run. This clause allows you to make payments on the principal of your loan, or increase the amount of your periodic payments (monthly, bi-monthly, etc.) without a penalty. Each lender has different programs for pre-payments, they usually vary from 10% to 20%, i.e., you can pay any amount within the approved percentage of the original value of your mortgage or increase your periodic payments once a year without paying a penalty.

Many people don’t take advantage of this clause because it is generally difficult to save the extra money to make additional payments.

Here is an easy way to take advantage of this benefit – “The Java Factor”. This is something that is very easy to follow and can save you thousands of dollars by paying down your mortgage.

Usually everyone buys a cup of jo (coffee) or two during their work day. When you see the cost of a cup of coffee at Starbucks or any other establishment, you realize that maintaining this habit can be very costly.

Suppose that you spend at least $5 per day, 5 days a week in “coffee, donuts, chocolates, snacks, etc.”, this would amount to approximately $108 per month; if you apply them to your monthly mortgage payments, the savings can be considerable.

For example:

In a $100,000 mortgage at a rate of 3.39% and 25 years amortization, you would reduce the total payment of your mortgage by 5 years and 4 months with savings of $13,185 in interest. For this calculation, we considered that the interest rate did not change during the life of the mortgage.

This calculation would vary case by case but depending whether you have a pre-payment clause with your mortgage or not, it is important to emphasize that by making a small sacrifice you can have significant long-term savings.

So remember “The Java Factor” next time you are thinking of stopping by for a coffee on your way to work and take a cup of coffee brewed at home.

22 Feb



Posted by: Mike Hattim

If you work with me, a licensed mortgage agent, to obtain a pre-approval, you can be confident you have access to mortgage financing and you will know how much you can spend before you head out shopping for a property.

It’s important to note, however, that there is a significant difference between being pre-approved and pre-qualified. In order to obtain a pre-approval, the lender fully underwrites the deal, whereas with a pre-qualification, only the most basic details are considered. Remember that many banks will only issue a pre-qualification.

In order to get pre-approved for a mortgage, I require a short list of information that will help me determine your buying power. I will explain to you the benefits of shorter or longer mortgage terms, the latest programs available, which mortgage products I believe will most likely meet your needs the best, and I will review all of the other costs involved with purchasing a home.

Getting pre-approved for a mortgage is something every potential homebuyer should do before going shopping for a new home. A pre-approval will give you the confidence of knowing that financing is available, and it can put you in a very positive negotiation position against other homebuyers who aren’t pre-approved.

16 Feb



Posted by: Mike Hattim

We’ve all heard the terms Mortgage Broker and Mortgage Specialist flung around, but what on earth is the difference? Though they sound similar, there are major differences that all home buyers and owners should be aware of. Let’s start off with some simple definitions.

Mortgage Specialist is a person employed by a lending institution to sell that lender’s mortgage products. A Mortgage Broker belongs to an independent firm that has access to multiple lenders’ mortgage rates and offers. So which one should you choose?

Mortgage Specialists can help if you already have services set-up at a lending institution, such as a bank, in order to consolidate all your finances. This can minimize paperwork as the bank is already familiar with your credit history. If you don’t have all your existing services set-up at one institution, you may choose a lending institution and Mortgage Specialist for the security of using a well-known bank. These are indeed valid reasons to enlist a Mortgage Specialist for your mortgage needs, but they also have some major disadvantages.

Mortgage Specialists only have access to their lender’s products. In a typical situation, homeowners end up with a higher interest rate than other institutions. This occurs because the homeowner must negotiate for themselves and Mortgage Specialists are usually paid according to the rate they sell you. This is where Mortgage Brokers come in handy. Mortgage Brokers have access to most lending institution’s products in the market place and can shop around to negotiate the best rate for you. They are also paid a flat rate for their services by the lender, so they don’t benefit from selling you a higher rate. Sounds great, but what else can a broker do?

Mortgage Brokers work for you rather than a single institution, which means they work in your best interest. A Mortgage Broker will handle all the paper work for you and only require a single credit check for all applications. Some people worry about using Mortgage Brokers because they usually belong to unknown, smaller companies, but this should really be viewed as an advantage. Mortgage Brokers are required to have formal training and must complete ongoing accreditation tests and courses to maintain their licences. Mortgage Specialists do not require any formal training and are simply educated by the institution they work for. These specialists are also limited to certain hours set forth by their employers, whereas Mortgage Brokers are typically available 24/7.

Both avenues of mortgage lending have valid functions. If you are willing to do research and feel comfortable negotiating for yourself then a Mortgage Specialist can be a sound investment option. If, however, you are stressed about the process and don’t feel comfortable taking on the responsibility of researching everything for yourself then a Mortgage Broker is a better option for you. It’s always best to take the time and discover which option fits your needs before jumping into one of the biggest purchases of your life.

So get out there and start researching!

15 Feb



Posted by: Mike Hattim

Here are answers to some frequently asked questions on the government changes to down payment requirements that take effect today, February 15, 2016.

If you recall from my last video, the down payment requirement has increased from five per cent, to ten per cent for the portion of the purchase price above $500,000, but less than $1,000,000.

The application of the government down payment requirement during any transition can often be confusing. To clarify the application of this requirement, and the grandfathering of this new requirement, here’s a few snippets of what we learned from CMHC’s underwriting department.


  • The new minimum down payment requirement naturally only applies to purchase transactions, not refinancing your mortgage.

Unchanged Premiums

  • We are advised mortgage insurance premiums will remain unchanged.

Important dates to remember

  • If you received an insured mortgage approval between December 11, 2015 and February 14, 2016 (inclusively) with a planned closing date after July 1, 2016, the new down payment requirement will still apply.
  • If you received an insured mortgage approval before December 11, 2015, and you entered into a purchase and sale agreement also before December 11, 2015, the “old” down payment requirement may still apply regardless of the closing date.
  • If your planned closing date is postponed after July 1, 2016, “CMHC acknowledges industry realities and will accommodate delays that may occur that are beyond a lender or buyer’s control and will be looked at on a case-by-case basis.”

Switching Lenders

  • If you wish to give your mortgage business to a different financial institution for a more competitive rate or product and you received an insured mortgage approval under the “old” down payment requirement before December 11, 2015 and the property and the buyers(s) remain unchanged, the new mortgage insurance application request made by this new lender would be reviewed in accordance with the “old” requirement, regardless of the date the alternative lender requests mortgage insurance approval from CMHC.
  • Similarly, if the mortgage insurance approval from the existing lender was submitted between December 11, 2015 and February 14, 2016 inclusively with a planned closing date on or before July 1, 2016, this new mortgage insurance approval request will be reviewed in accordance with the “old” requirement.”

Again, these are just a few snippets of some frequently asked questions. You may likely have a few of your own so let me know yours. Be certain to speak to your own mortgage broker concerning your purchase if you’re under way as well.

Have a great rest of the week and remember, we are always here at Dominion Lending Centres to help you with your mortgage questions!

11 Feb



Posted by: Mike Hattim

Here are the steps you need to follow to ensure you get a mortgage that’s right for you!

Step One: Pre-Qualify & Strategize!

Step one is to get pre-qualified, which should not be confused with the term pre-approved. The big difference is that no approval is ever given by a lender until they have an opportunity to examine the property that you wish to purchase. Obviously that can’t happen before you actually go home shopping. Pre-qualifying will first focus on your credit, your debt load, your income, and what type of mortgage you are looking for. The best part is that an independent mortgage broker can do this in person at your house or our office, over the phone, or online through a secure mortgage application.

Once your mortgage broker has all the basic information, it’s time to find out what you’re financial and homeownership goals are. As mortgage brokers that ‘custom build’ mortgages to your specifications, this information is imperative in allowing them to seek out a lender and a mortgage product that will help you meet your goals. You’ll want to be sure you are getting a great rate, but just as important as rate are the other features of your mortgage such as pay down strategies, pre-payment privileges, and exit strategies. There’s a lot more to a mortgage than rate! Once you have selected the lender, product and strategies that meet your needs, you will know exactly what price range and quality of home you can look for!

Step Two: Find the Right Property

Once you have been pre-qualified, you can go house hunting! If you need a Realtor to help you with this, your mortgage broker can recommend a few for you to choose from.

Step Three: Approval

As soon as you have decided on the property you wish to buy, your mortgage broker will send your application and property information to the lender of your choice for approval. Once the lender has an opportunity to look at your application and the property you wish to buy, the lender will issue a “commitment” letter outlining the terms of the mortgage and any further documents they wish to see to verify your application information. Your mortgage broker will discuss the commitment from the lender with you and then forward any requested information to the lender for their review.

Step Four: The Lawyer’s Turn

At this point, the lender will have reviewed your supporting documents and notified your lawyer. Your lawyer will process all the necessary title changes and set up a time for you to meet with him to sign the mortgage documents and go over the fine print.

Step 5: Get the Keys!

By the day of your closing the mortgage lender will have sent the funds to your lawyer’s trust account. Your lawyer will communicate with the seller’s lawyer regarding an exchange of cash for keys and you are then the proud owner of your own home.

Understanding the mortgage process can help you see and understand how your entire team of professionals at Dominion Lending Centres work together to help you start your life in your new dream home!

10 Feb



Posted by: Mike Hattim

More and more Canadians are going into their retirement years without a lot of money saved in the bank. It is suggested that in order to live a financially comfortable retirement, couples should have saved 50-60% of their peak pre-retirement income, which equates to roughly $42,000 to $72,000 a year or $275,000 to $1,025,000. Singles should have saved 60-70% of their peak pre-retirement income, roughly $30,000 to $50,000 per year or $350,000 to $850,000. (Assuming mortgage is paid off and children are financially independent. All amounts based on 2014 dollars).

In a 2013 survey of 1,500 Canadians over the age of 50, only 2 out of ten households said they would have more than $250,000 saved for retirement. 50% of the households surveyed felt that they would consume their retirement savings within the first 10 years of retirement.

Because of these financial woes, many Canadian homeowners in their later years have considered taking out a home-equity loan or the option of a reverse mortgage to access the equity in their home.

Home-Equity Loan

Like a primary mortgage, a home equity loan lets you convert your home equity into cash. In fact, many refer to a home equity loan as a second mortgage, where you would receive the loan as a single lump-sum payment, and then you would make regular payments to pay off the principal and interest.

Another form of home-equity loan is the home equity line of credit (HELOC). A HELOC gives you the option to borrow up to a pre-approved credit limit, on an as needed basis. Therefore, with a home-equity loan, you would pay interest on the entire loan amount, whereas with a HELOC, you pay interest only on the money you withdraw. Since a HELOC is an adjustable loan, the payment changes as the interest rates fluctuate.

It is important to keep in mind that your home acts as collateral in a home-equity loan. So if you default on the loan, you risk losing your home to foreclosure.

Reverse Mortgage

With a reverse mortgage, instead of making payments to a lender, the lender will pay you, based on a percentage of the appraised value of the home, as well as factors such as your age and the age and the condition of the house.

You will continue to hold title to your home, but as soon as you become delinquent on the property taxes and/or insurance, the condition of the home is in disrepair, you move/sell the home or you pass away, the loan is then due for repayment.

Home Equity Loans, HELOCs and Reverse Mortgages are all options, which allow you to convert the home equity into cash, however, they differ in terms of credit, income, repayment, disbursement, age and equity requirements. Before you make any decisions, find out how to tailor your needs and requirements with the best product for your situation.

For more information on a reverse mortgage loan, contact a mortgage professional at Dominion Lending Centres.

9 Feb



Posted by: Mike Hattim

New credit reporting and what it says about you and your spending habits may make all the difference between you buying a home now or later.

When home buyers contact me to apply for a mortgage, I always review their credit report with them along with the rest of their application, before they start looking at homes with a Realtor. If there are any issues with the credit history we can determine the reason, the next course of action and how it will impact financing a purchase.

There is a lot of valuable information in a credit report which provides an overview for lenders about your ability to borrow money. Consistent late payments, collections and bankruptcy have the biggest impact on lowering your score. Running a high balance or over your limit on your credit cards will also drive your credit score down. Scores range from 300-900 and a difference in score by as little as 50 points says a lot to a lender about you as the borrower. For example, a score of 550-599 represents 21% of delinquencies while a score of 600-649 only 11%. Delinquency rates are defined as those who have late payments beyond 90 days. If your score falls from one bracket to the lower bracket with late payments or collections, the difference can affect the interest rate you can receive or, worse yet, if you can qualify for the mortgage amount you need.

The most recent software update for the credit bureau reporting system has added some features which could have a significant impact on reporting. The new reports, which were released in early 2015, show three credit scores and one overall score.

The first score ranks based on open credit and balance to limit ratio. So if you have lots of open credit and your balances are low or reasonable the score is higher. High balances or over limit on all credit cards will drop your score.

The second score ranks based on late payments and collections over $250. If your late payments are beyond 90 days, your score will drop dramatically.

The third score ranks based on the number of third party collections in the last 3 years and the oldest revolving credit. So if you have outstanding parking tickets or an unpaid gym membership that you forgot about — they will come back to haunt you.

These individual scores were created to show specific behaviour by a borrower and if the credit score is trending up or down. This can give the lender an indication of a chronic issues with a potential borrower or if they are consistent with their credit usage.

With mortgage payments, lines of credit, auto loans, credit cards and even cell phone bills now reporting on the credit report,  consumers have to be diligent with spending and paying bills on time.

I recommend to all my clients to keep your credit report clean — after all, it is your identity.

Establish at least two trade lines of a minimum of $2,000. One credit card and one personal line of credit for example.

Maintain lower balances (< 65%) on all lines of credit or credit cards.

Make payments a few days before they are due to ensure you are always on time

If you get a parking ticket, fight it and lose – pay the bill and don’t let it go to collection.

Look at your credit report annually and certainly 3-6 months before making any major purchase such as a car or home. To view your own credit report visit www.equifax.ca.

8 Feb



Posted by: Mike Hattim

When shopping for a mortgage, many home buyers enlist the services of a Mortgage Professional. There are several benefits to using a Mortgage Broker and I have compiled a list of the top 8:

1. Saves you time – Mortgage Brokers have access to multiple lenders (over 50!). They work with lenders you have heard of and lenders you probably haven’t heard of. Because their relationship with lenders is ongoing, Mortgage Brokers know what is available in mortgage financing and will be able to advise you on what your lending options are without all the leg work that you would have to do in order to find a small percentage of information that a Mortgage Broker already has in hand.

2. Saves you money – Mortgage Brokers, if they are successful, have access to discounted rates. Because of the high volume that they do, lenders make available discounted rates that are not available directly through the branch of the lender that you go to.

3. Saves you from becoming stressed out! – It can be very daunting to find a mortgage. A Mortgage Broker takes on that stress for you. Your Mortgage Broker will make sure all the paperwork is in place. They will keep in good communication with you so that you know what is going on with your mortgage and will keep you up to date with any complications so that there are no surprises.

4. Gives you access to lenders that are otherwise not available to you – Some lenders work exclusively with Mortgage Brokers. In these circumstances, the layman does not have access to these lenders and, therefore, does not have the option to use discounted rates and mortgage products that these lenders offer.

5. Services are free – Mortgage Professionals are paid by the lender and not by you. This is not a disadvantage to you. A good Mortgage Broker will ALWAYS have the best interest of the client in mind because if you, as a client, are happy, you will go tell your friends about the service you’ve received from the Mortgage Professional you work with. Mortgage Professionals rely on referrals, which means that if you are a happy customer, and you got the best deal available, you will tell your friends and family about them which will result in referrals and potential future business.

6. Take on every challenge – As Mortgage Professionals, we see every scenario out there and work to make sure that every client knows what is available to them for financing options for a mortgage. Damaged credit and low household income might be a deterrent for the bank, but a Mortgage Professional knows how to approach the lender and has the relationship to make sure every client has a plan and strategy in place to make sure there is a mortgage in their future.

7. The Mortgage Brokerage industry is monitored by governing bodies – Nowadays, as Mortgage Brokers, it is extremely important to have principles and values that are based on the best interest of the client. In fact, in order to become licensed, the Mortgage Professionals need to be well versed in the ethical and upstanding values that are outlined through the Financial Institutes Commission, a provincial governing body that is a watchman for this industry. FICOM’s mandate is to make sure every Mortgage Broker walks in integrity and in the best interest of their client.

8. The Mortgage Broker has a better understanding of what mortgage products are available than your bank – Interestingly, a Mortgage Broker has to be licensed and cannot discuss mortgages with you unless they are licensed. This is unlike the bank who can “internally train” their staff to sell the specific products available from their bank. The staff at your bank do not have to be licensed Mortgage Professionals.

While this is not an exhaustive list on the benefits of using a Mortgage Professional, it is compelling to see the benefits of using a Mortgage Professional rather than putting a mortgage together on your own.

At Dominion Lending Centres, we have an excellent rapport with the lenders we introduce our clients to. Our customer service is reflective of our relationship with our lenders. We are always professional and we always make sure our clients know every viable option they have for mortgage financing.

4 Feb



Posted by: Mike Hattim

Short Version:

Do not rely on BC assessment for a value.

Do not rely on a buyer in a private transaction for a value.

Do not rely on your neighbours, friends, or family members for a value.

Do consider a marketing appraisal, but do not rely on it 100%.

Do consider the evaluation by an experienced, active, local Realtor or two, ideally in combination with a marketing appraisal.

Gather professional opinions from people with their feet on the ground and their heads in the game.

Thank you.

Long Version:

Provincial Property Assessment notices have arrived in the mail, giving some homeowners a big smile and a bit more spring in their step (increased property taxes aside), while others wilt and lament at a modest gain or decrease in assessed value.

Hold on, though. Neither party’s emotions are tied to a true market value, and in fact, provincial property assessments can be significantly too high or too low. Values are determined in July of the previous year, and properties are rarely visited in person by provincial appraisers.

For this reason, provincial property assessments should never be relied upon as any sort of relevant indicator of true market value for the purposes of purchase, sale, or financing.

Think of the assessed value instead as something akin to a weather forecast, spanning far larger and more diverse areas than the unique ecosystem that is your neighbourhood, street, and specific property.

With that in mind though, the BC Assessment Authority does offer some useful tools for getting a high-level view of the market. Go to http://evaluebc.bcassessment.ca/ and start typing an address. You’ll get a drop-down window where you can click on the address you want. Here’s what you can find out:


These come up on the first screen and include: current and last year’s assessed value; size and rooms; legal description; sales history, and further details if the property is a manufactured home or multifamily building. There’s also an interactive map as well as links to information on neighbouring properties and sample comparative sold properties.


Here you can compare the assessed value of houses in the immediate neighbourhood. Clicking on any property brings up further details.


Find comparable properties and see what they sold for and how their sold price compares to their assessed value. This is a great research tool for owners, sellers and buyers.

These tools can be a starting point, but if you’re looking to set a selling price on your own property, always enlist a professional, and ideally in a transactional situation, order an appraisal, which is a much more accurate reflection of current market values. It is timely and reflects value for zoning, renovations and/or other features unique to the property. An appraiser is an educated, licensed, and heavily regulated third party offering an unbiased valuation of the property in question.


Usually, market value is determined by what a buyer is willing to pay for a home, and what the seller is willing to accept.

A quick survey of recent sales and their relation to assessed values will tell you that there seems, in fact, to be no clear relationship between sale price and assessed value. It’s all over the map.

Ideally, turn to an experienced Realtor to help you determine the selling price of your home. A busy, local Realtor will have a far better handle on what is happening in your area for prices, and in many instances will save you from yourself.

In theory, a comprehensive current market review completed by a Realtor should not differ radically from the value determined by a professional appraiser.

Professional appraisers spend all day every day appraising properties, and, unlike a Realtor, they are paid for the work they do, and their reports are often seen (by buyers) as less biased. Imagine your reaction, as a buyer, to the following statements…

  1. The seller says their house is worth $500,000.
  2. The sellers’ Realtor says it’s worth $500,000.
  3. This house is listed at $500,000 based on a professional (marketing) appraisal.

Most buyers would consider #3 the most reliable. However, they will be ordering their own independent appraisal anyways.

In practice, Realtors are relied upon for listing price estimates. Most buyers don’t care much about what anybody else thinks the house is worth; they care what they think it is worth. It matters little what the professional appraisal says. This is why we say that market value is ultimately determined by what a buyer is willing to pay for the home, aligned with what is acceptable to the seller.

It is important to note that there are two kinds of professional appraisals. There is the marketing appraisal, such as one ordered by a seller. And there is the financing appraisal, which is done so the bank is satisfied the house is worth what the buyer and seller have agreed it’s worth. The financing appraisal is a less in depth review and is essentially answering the question; is this property worth the agreed upon purchase/sale price.

marketing appraisal goes deeper (and costs more) but a lender is not concerned with the actual market value over and above the purchase/sale price. A lender just wants the simple question answered. It is a rare day that the appraisal for financing has a value that differs significantly, if it all, from the sale price. Therefore I don’t think one should be surprised if, when buying a home, they find that the appraisal comes in bang on at the purchase price. They usually do.


Do not rely on BC assessment for a value.

Do not rely on a buyer in a private transaction for a value.

Do not rely on your neighbours, friends, or family members for a value.

Do consider a marketing appraisal, but do not rely on it 100%

Do consider the evaluation by an experienced, active, local Realtor or two, ideally in combination with a marketing appraisal.

Gather professional opinions from people with their feet on the ground and their heads in the game – like the mortgage professionals at Dominion Lending Centres.