Author Archives: admin

Why You Should Get Pre-Approved for a Mortgage

Congratulations on making the decision to become a homeowner. The next step you should take in the home buying process is to get pre-approved for a mortgage. As your local North York mortgage broker, the Topcu Team at CLN Mortgages have created a list of the top 5 reasons why you should get pre-approved.

  1. Financially capable

Get pre-approved for a mortgage shows you are financially capable of taking on the responsibility of homeownership. It not only shows that you can financially afford to make monthly payments towards your North York mortgage, but it also shows you are serious about buying a home.

  1. More Credibility

You will receive more credibility for being pre-approved over someone who is not. If you are in a bidding war with another family, the seller will be more inclined to pick you over them because you have been pre-approved for a mortgage. In addition, having this credibility means you can also negotiate for a better deal.

  1. Know your affordability

Your local mortgage broker will be able to tell you exactly how much they can lend you once you are pre-approved. This will let you know your affordability and can save you time when shopping the market. Knowing how much you can afford lets you know what price range you can shop in when looking at houses. This can save you time by avoiding looking at houses that are not in your budget.

  1. Close quicker

If you cannot wait to move into your new home, then getting pre-approved can help you close quicker on a house. All your financial documents including your income and credit score will already be collected and organized, which will help speed up the loan process.

  1. More market access

Most real estate agents will refuse to work with you if you have not been pre-approved for a mortgage. This means pre-approval can help give you more access to the market by allowing you to work with an agent and view a wider selection of homes.

If you are looking for a North York mortgage, then getting pre-approved can let you know if you are financially prepared for this responsibility, can give you more credibility, will let you know what you can afford, can help speed up the process, and give you more access to a wider selection of homes. So don’t wait, call our office at 416-857-6030 to get started on your pre-approval application today.

mortgage rules North York

The New Canadian Mortgage Rules

Are you in the market for a new home? Well as your mortgage broker in North York, it is our duty to inform you on the new Canadian Mortgage Rules (also known as the Stress Test Rules) before you start the home loan process.

As of January 2018, new rules were enacted across all of Canada in regard to getting a loan. The biggest change is the new Stress Test Rules.

What is the Stress Test?

The new stress test is done to see what borrowers qualifying rates would be. This new rate is either the 5-year benchmark rate by the Bank of Canada, which is currently 4.89%, or your current contract mortgage rate plus an additional 2%. Whichever is higher of the two rates, is what lenders base your qualifying rate off of.

This is affecting Canadians affordability, even if you have a down payment of 20% or more. It is important to go through your finances with the new mortgage rates in mind because you might have a different price range to shop around in.

Why the Change?

The purpose of the new mortgage rules is to help mortgage consumers not borrow more money than they can afford. Recent trends suggest that a lot of people would borrow the most amount of money they can afford, which is creating more financial debt. The new rules reduce that limit by increasing interest rates and forcing homeowners to buy cheaper. The new rules are also a way to cool down the market.

Toronto and Vancouver have a particular high housing market, and the rates keep increasing. The government is hoping to cool down the market so the prises stop rising exponentially.

Can you Refinance?

Even if you already have a set mortgage and are wanting to refinance, these new rules still apply. You are allowed to refinance up to 80% of the home’s value and pass the same stress test rules as listed above.

Restrictions on Loan-To-Value (LTV) Ratios

Loan-to-Value (LTV) ratio represents the ratio of the total mortgage debts registered on a property versus the market value/purchase price of that property. As an example, if buyer is putting 20% down payment for the purchase, mortgage debt will be 80% of the purchase price. In other words, the LTV will be 80%.

In the past, mortgage lenders have tried to get around certain LTV limits by partnering with other lenders. This is no longer allowed, with the exception of credit unions and private mortgage lenders. And a mortgage broker has direct access to several such credit unions or other lenders to be able to offer the exact solution the buyer is looking for.

Get Started

Buying a house is a big commitment, so it is important that you are financially ready to take on this responsibility. If you are looking for a local North York mortgage broker, call us today to get started 416-857-6030.

J.R. from Burlington, ON

My ex-wife’s lawyer gave me 30 days to buy-out her half of our house or have it put up for sale. I had no job and my bank manager laughed at me. I thought I was hopeless until I contacted you and couldn’t believe that you saved my house.”

L. M. from Kingston, ON

With your help, we are back home shortly after being evicted by the sheriff. Our dog missed his back yard and the Husky next door. My son is going on March break soon and three of his friends will move in next week. I am overjoyed to be back home.

A.N. from Brantford, ON

Words cannot express my family’s gratitude to you for coming to our rescue and for all your hard work and perseverance which in the end saved our home and stopped the foreclosure process caused by one of life’s hurdles. Not only did you go above and beyond, you saved us lots of money in the process. Thank you a million times over from my husband and I as well as our four young children!!!!

Willamson

I did not think I could refi with the current value of houses and being upside down. Everyone rejected me, I inquired at about 5 big banks. BrightPath went the extra mile and looked at my whole situation – and got me into a fix rate mortgage in the 3’s, and reduced my payment. Knowing that I am locked in at a great rate and have a fixed payment helps me budget for the long term and sleep at night. Thanks BrightPath!

Craig

I did not think I could refi with the current value of houses and being upside down. Everyone rejected me, I inquired at about 5 big banks. BrightPath went the extra mile and looked at my whole situation – and got me into a fix rate mortgage in the 3’s, and reduced my payment. Knowing that I am locked in at a great rate and have a fixed payment helps me budget for the long term and sleep at night. Thanks BrightPath!