1. Pre-qualifiers and Pre-approvals Pre-qualifiers are an opinion as to the maximum purchase price that a client can afford. This information can be communicated within the same day so that you can start shopping for a home with your client. A pre-approval provides not only the guidance of a maximum purchase price but also a guaranteed rate for a specific periods of time – up to 120 days. Pre-approvals take 24-48 hours as a rule. With the approval of the client, I can email this information to you so you know exactly where they stand.
2. Variable Rates Current variable rates now have a premium, a month and a half ago the best rate was prime - .75%, it is now prime + .75% and most banks are offering prime + 1%. Prime is currently at 4% so a rate of 4.75% or 5% is still a better choice than long term rates (3-5 year fixed) which are in the mid to high 5% range. Bank of Canada is expected to reduce the overnight rate by 25-50 bps by the end of the year and if the lenders follow suit variable rates may be at 4.50-4.75% (prime being 3.50-3.75%). Variable rates can always be converted without penalty to a fixed rate. Another great option with built in flexibility.
3. Fixed Rates Short term rates of 1-2 years are also favourable at this time for the client that prefers a fixed rate. This is one of the strategies that I have my clients in over the last few weeks. We may take these to term or move to another mortgage option if rates shift in favour of the client.
4. 40 year amortizations 40 year amortizations still exist for properties that are 80% loan to value of their appraised value (conventional). This includes owner occupied and investment (rental) properties of up to 4 units.
5. Investment Properties Investment properties can be financed up to 95% loan to value for a 1-2 unit property. For a 3-4 unit property the maximum is 90% LTV. A perfect choice for clients who want to avoid the stock market for investing.
6. Condition on Financing Condition on Financing, as a rule 3-5 business days. The more complex the deal, the more days are required. Call me for guidance.
7. Commercial Mortgages Please call me on any commercial deal you may have, each commercial deal is looked at on a case by case basis and is heavily underwritten based on cash flow.
8. Self-Employed Clients Client that are business for self for a minimum of 2 years can qualify for a purchase of up to 95% loan to value even if they show a low income on their Notice of Assessments. Good credit and a 2 year history of being in business are the only requirements to qualify for best rates.
9. Mortgage Brokers now regulated Mortgage Brokers are now regulated by FSCO as of July 1, 2008. There are hefty fines for those who portray themselves as a Mortgage Broker and are not licensed, not to mention that this could kill a deal. Know who you Broker is and make sure they are licensed, leave nothing to chance.