Mortgage and loan news

Getting a gift letter in 2022 – what to know

father holding two kids in front of his new home, after receiving a gift letter to help fund his down payment

Receiving a financial gift is a fantastic way to help secure a down payment. But, there are some important steps to follow. In this blog, I’ll go through everything you need to know about receiving a gift letter in Canada in 2022. Let’s get started!

What is a gift?

A gift is an amount of money that is gifted to you to go towards purchasing a home. Getting a gift is one way to help Canadians buy a home, increase their mortgage approval amount or increase buying power.

Where the gift comes from.

When you receive a gift, it has to come from a direct family member. Banks will not accept a gift if the giftor is not related to the purchaser. A direct family member includes a mother, father, grandmother, grandfather or a sister or brother.

Mortgage and loan news

Hartz iv and a move: what to consider

Moving: What benefits recipients of ALG II, i.e. unemployment benefit II, receive in Germany is governed by SGB II, the Second Social Code. However, the receipt of benefits is accompanied by obligations and rights, which should be known to the persons concerned.

Of these, for example, is also affected a move. With this Hartz IV recipients must thus consider certain things. The following article explains what these are, for example, in the case of a Hartz4 move in Hanover.

The assumption of the moving costs

In principle, all costs, which are to be expected by the removal, are to be applied in the apron for a cost assumption with the job center. The relevant cost estimates must also be attached to this application. Before implementing plans to move, it is essential to wait until the written confirmation of the assumption of costs has been made.

Mortgage and loan news

Downsizing your house will save you more than money 6 tips to consider

Senior couple standing outside retirement home

Have you outgrown the need for such a large home? Are you asking, “should I move into a smaller house?” Downsizing a home can save money, help empty nesters or seniors manage their home easier, or just help you live a simpler life without the burden of home maintenance. Downsizing your house can offer more freedom and less responsibility but there are some things to consider depending on your needs and your personal situation.

Six tips on downsizing to a smaller home

1. Buying a smaller house means you save money

Mortgage interest rates are still extremely low. So, it may be a great time to make a move. Purchasing a less expensive home may mean saving hundreds of dollars each month on your mortgage payment. Moving to a smaller and less expensive home can also save you a significant amount of money on property taxes and costs associated with maintaining your home. Utility bills may also turn out to cost less since you are not heating and/or cooling as much space. Home maintenance is more affordable in general, due to simple things like smaller lawns and overall square footage.

2. Townhomes and condos offer a variety of benefits

Choosing a smaller home, townhome or condo might very well save you money on your monthly payments or utility bills; however, some people, especially aging senior citizens, are much more interested in the sheer convenience of downsizing. The money you save on your house payment or other bills can easily be allocated to living association fees, providing you with the convenience of lawn, snow removal, trash and repair services, or even community pools and gyms.

Mortgage and loan news

Top tips to save for a house

A home is likely the largest purchase you’ll make in your lifetime, so it’s wise to be prepared from the start. Understanding how to budget and save for a home is part of the first steps you’ll take toward buying one of your own. Whether it’s a big farmhouse on a large plot of land, a smaller townhome tucked away in a quiet neighbourhood or a two-bedroom condo in the heart of a city, purchasing a home of any size is a long-term investment. With the average cost of a home in Canada now reaching $686,650, and in some markets clocking in at over $1M, it’s become increasingly difficult for Canadians to afford to buy homes. For this reason, learning how to properly save for your home purchase in advance can have a positive impact on your outcome. Not to mention that better managing your money can positively impact all areas of your budget and life.

How Much Should I Save Before Buying A House?

In Canada, home buyers are required to pay at least 5% of the home purchase price as a down payment. If you put down less than 20%, you’re required to purchase mortgage default insurance. Since the insurance lowers the risk for the lender, this can still get you access to lower rates. However, if you plan to make at least a 20% down payment on your new home, not only will you be able to skip the cost of mortgage default insurance, you’ll likely have a lower monthly payment and pay less in interest over the life of the loan. There are pros and cons for each option, but if saving up 20% of the home’s purchase price just isn’t possible, know that it’s not required.

House Saving Tips

There are plenty of ways you can work toward saving up for your dream home. The more time you give yourself to get your finances sorted, the better position you’ll be in when it comes time to find and buy a home. Check out these simple saving tips to help you reach your goals faster:

Mortgage and loan news

Estate agents – get promoted to area manager with these 10 tips

Why do some property managers get promoted to regional manager – while others stay stuck? What’s the secret?

Show you’re better than the other managers at getting purchases – and show that your abilities are scalable – and you’ll make it all the way to CEO.

The key factor in securing a promotion is to increase revenue and scale. Let’s start out by discussing what you SHOULDN’T do.

Mortgage and loan news

The mortgage process–a step by step guide

Perhaps the scariest part of becoming a homeowner is simply getting started. It’s easy for any one’s head to start spinning once they look at everything involved with acquiring a home loan. While it may seem daunting, having the right people in your corner makes all the difference. Read on to learn the six steps that are involved in the mortgage process and determine if it’s something you’re ready to tackle.

Step One: Pre-Approval

During this stage of the mortgage process, a lender determines whether you’re qualified to borrow money. This is done by taking a close look at your credit, employment history, and income to verify the maximum amount you’ll be able to borrow. An experienced loan originator will use this information to help determine which loan program is right for you, taking into account down payment amount and available interest rates. Once pre-approved, you’ll get a letter stating that you can indeed afford a home loan up to a certain value. This is the green light to start house hunting. Your pre-approval gives you an idea of how much you can afford and lets sellers know that you’re a serious buyer. The key to a successful pre-approval is working with a trusted loan originator who can help you qualify for the appropriate mortgage.

Step Two: Submit Initial Documents

After the pre-approval process, you’ll have to determine the type of mortgage loan that is appropriate for you and submit specific documents to verify your income and prove that you’re able to afford the loan. This typically includes your previous two years of tax returns and W-2’s along with 30 days of pay stubs. You’ll also have to disclose any additional income such as alimony, bonuses, freelance work, etc. This information is used to show that you have the funds for a down payment, closing costs, and any other fees that may occur.

Mortgage and loan news

Top 11 tips for lenders navigating commercial loan modifications in response to the covid 19 outbreak

In the immediate term, most Lenders are considering modifications that offer (usually on request only and subject to normal underwriting and credit review) a 60–90 day deferral of payments for principal reductions or both principal and interest. These modifications are typically being enacted only to give the parties (and everyone else) an opportunity to better assess how the COVID-19 outbreak evolves and what impact the government’s response to the outbreak may or may not have on the Borrower’s business going forward. To avoid establishing a course of dealing, Lenders should be clear in communicating that this accommodation is (as of right now) a one-time event and that future accommodations may not be granted. Lenders should consider (a) developing a standard/formal communication to Borrowers which explains the context in which and why the accommodation is being granted and (b) implementing policies to prevent loan officers from over-promising to Borrowers via informal communications such as phone calls, social media, emails, and texts. It is certainly okay (and natural) to empathize with a Borrower’s challenges, but individuals dealing directly with customers should avoid over-committing to another round of accommodations if the outbreak lasts longer than anticipated.

Dealing with Deferred Payments and Interest Accrual

Lenders should consider how interest will be treated during any period of deferral. Will interest continue to accrue during the deferral period? If so, when will that interest be due for payment and how? How will deferred payments be repaid? At maturity? Will the maturity date itself be extended as part of the accommodation? If interest will be accruing during the deferment period, representations that the number of payments being deferred will be added to the maturity date should be avoided, unless the amortization in the loan supports the ability to make such promises. Regardless of how the Lender decides to manage deferred payments and interest accrual, the Lender should take the time to clearly explain the same to the Borrower to avoid any confusion down the line. Additionally, once payment accommodations have been made and clearly documented, Lenders should ensure that their internal accounting/payment systems are set up to properly track the terms of any modification.

Covenant and Reporting Requirements

In the intermediate term, another important consideration Lenders are grappling with is how to manage covenant and reporting requirements going forward. For instance, if a Borrower agrees to payment deferrals for its customers, what impact will those deferrals have on the Borrower’s borrowing base? What about inventory or accounts that become aged and are not replenished due to a longer than expected shutdown? Most Borrowers will have a difficult time complying with their financial covenants going forward as well due to the economic impacts of the crisis. Lenders will need to re-think how to measure a Borrower’s financial health during this crisis. In anticipation of these issues, modifications done in the immediate term should contain standard reservation of rights language. Additionally, Lenders should consider developing a form reservation of rights letter that can be used (as needed) to document covenant and reporting defaults during the crisis when enforcement action may not be desired and/or may be legally prohibited.

Mortgage and loan news

Covid 19 mortgage lending changes and what they mean for borrowers

Man working on a laptop in an office

It’s been a roller coaster ride for the mortgage industry since the start of the COVID19 pandemic — and that’s putting it lightly. Borrowers saw incredibly low rates increase by nearly a full point in a matter of weeks. Granted, interest rates leveled out shortly thereafter and remain favorable for borrowers.

So then why are mortgage experts concerned about the industry if rates are still low? It all ties back to the coronavirus, also known as COVID-19. Things are changing with mortgages, whether it be credit score requirements, loan program requirements, or loan program availability.

We’ve put together this FAQ page to help people understand the changes and know their loan may be impacted.

Mortgage and loan news

Tips for indigenous home buyers

tips for indigenous home buyers

If you’re Native American, Alaska Native, or a Native Hawaiian and looking to buy, rehabilitate, or build a home, there are special options to help you get a mortgage and save money. Here are some tips for your particular home-buying journey.

Get to know Section 184

The U.S. Department of Housing and Urban Development created the Section 184 Indian Housing Loan Guarantee Program to help Native Americans purchase homes. Just like the VA loan program, Section 184 guarantees a lender that its investment will be repaid in full in the event of foreclosure.

The other benefits of Section 184 loans are that HUD plays watchdog for you. HUD ensures that you’re finding the best loan options and there are flexible application requirements to make it easier to get approved.

Mortgage and loan news

When does it make sense to refinance from fixed to arm terms?

Couple looking at mortgage denial letter

The security and consistency of a fixed-rate mortgage can be comforting for homeowners, but sometimes, an adjustable-rate mortgage (ARM) is a better financial option. To refinance from a fixed to an ARM loan is somewhat risky, as you can never be sure how the market and your own financial situation will change. However, in specific circumstances, refinancing to an ARM could save you a lot of money by lowering your interest rate.

To decide whether you should refinance from an ARM to a fixed mortgage, you have to consider your own financial goals and your plan for the future. Of course, everyone’s situation is different, so only you know what your best option is. Here are five situations in which a refinance from a fixed to ARM loan makes sense.

1. You’re going to move in a few years.

ARMs offer an introductory period with an exceptionally low interest rate. In most cases, this low rate lasts for five years, but some lenders offer longer or shorter introductory periods. After your introductory rate ends, your interest may increase considerably. If you’re planning on moving before the end of the initial period, you don’t have to worry about the rate increase.