17 Oct

5 Reasons to Work with a Mortgage Broker 

Mortgages

Posted by: Gert Martens

I deal with many clients, as a Grande Prairie mortgage broker, who has moved from going directly to a lender for a mortgage to using a broker. There are so many benefits to choosing a mortgage broker, whether it to buy your first home, take out a second mortgage, or renew your existing one to get a better rate. It’s important to find the right financing for your circumstances, and that’s something our Grande Prairie mortgage brokers excel at.

5 Benefits of Using a Mortgage Broker 

It’s not the same as it was in the old days, where you would find the home you want and then go to your local bank to take out a mortgage. People would accept the terms offered with no questions asked about getting better rates. A lot has changed though and shopping around can save you thousands of dollars of savings from interest rates. From getting lower rates to having more loan options to choose from, it makes sense to go to a mortgage broker.

You Save Time and Money

When you use a mortgage broker you aren’t having to apply to all of these lenders on your own, which can hurt your credit score. A mortgage broker does all the work for you and is looking out for your best interests. A broker also has access to a variety of lenders and mortgage packages that you won’t get from a lender. This means lower rates that can save you thousands over the life of your mortgage.

Keeps Your Credit Score Safe

When you apply to many lenders on your own it can impact your credit score. This is because each time you apply, the lender pulls your history, resulting in a hard check on your credit report. Too many hard checks in a short period will lower your credit score. When you use a broker they only pull your credit report once, which helps to protect your credit score.

Lower Rates 

Mortgage brokers tend to do a lot of transactions with certain lenders. This means they get volume bonuses that work to pass savings on to you as their client. A good broker needs to be an unbiased negotiator, which means they have a better chance of getting you better rates from a lender than you would if you went yourself. Not to mention, lower rates mean you will have payments that are lower too.

Unbiased Advice

As mentioned above, a mortgage broker works with many lenders and referrals from clients are indispensable. It’s in a broker’s best interest to give unbiased advice and make sure clients are satisfied. A broker should choose a lender and mortgage package that is suited to your needs and not because they were offered a finders’ fee or bonus.

Virtually No Cost

Mortgage brokers are compensated by lenders directly. This means that, in most cases, there will be no cost to you. There are some instances when you could be charged a fee is when going with a private lender that does not pay a broker fee. In these situations, a broker will tell you about this upfront so that you are aware of any potential costs to yourself.

You can see why it makes sense to use a Grande Prairie mortgage broker. If you are looking for a mortgage, give one of ours a call today!

 

7 Aug

Market Update – July 2019 

Mortgages

Posted by: Gert Martens

Market Update 2019 

Working as a Grande Prairie mortgage broker means keeping an eye on the real estate market.  Here in the Alberta region, I’ve seen a lot of ups and downs this year.  The outlook for the moment is stable but still struggling.  The bubble-like conditions in the market during 2017 made 2018 a real challenge as the housing market tried to regain its footing.  2019 has continued with this trend so far.

Between steadily rising interest rates and stricter rules for qualifying for a mortgage, it’s no surprise that the figures at the end of 2018 looked somewhat lacklustre.  The first half of 2019 saw a cooler market overall. So, how do things look for the second half of 2019?

2019 Market Update

It’s been predicted that the last two quarters of 2019 will see an improvement in market conditions.  The Bank of Canada had expected to raise interest rates quite a bit at the start of the year.  However, with the softer housing market, they had to reconsider.

There are a few factors that should affect the coming months in a positive way, such as population growth, immigration targets, a stronger job market, and steadier household incomes.  Hopefully, we will start to see people moving away from rentals and into the home buying market.   Of course, this may vary from one area to the next.

While we have seen prices lowered for homes and sales up in areas like Vancouver, Ottawa, Toronto, and Montreal, a less positive picture has been painted for Alberta.  In Alberta, the market has continued to struggle due to the effects of oil prices dropping and the energy sector struggling.  In January, we saw resales hit an 80-year low.

For Buyers

The outlook for buyers for the rest of 2019 continues to remain the same, with prices slowly climbing and pressures on affordability sticking around.  Overall, the number of Canadian looking to become homeowners within the next 5 years has dropped from 48% in 2018 to 36% in 2019.  Many feel the mortgage stress test is to blame for this though.

The number of new mortgages in 2018 dipped to 11.9% and with many homebuyers being unable to qualify for mortgages, we will see a continuation of this.  If you are looking to make a purchase this year be sure to keep an eye on mortgage rates.

For Sellers

For the remainder of 2019, we should see home prices rise by about 1.7%.  There could be fewer buyers looking for homes and lower home values.  This is quite the change from 2017 when we saw prices spiraling and bidding wars.

It would be a good idea for sellers to strategize how to best market their properties, so find out as much as you can about home prices in your area before sticking them on the market.

Current Homeowners

For those who own homes and are nearing renewal time, the remainder of 2019 could be tricky.  Should they stick with their current lenders, they won’t have to deal with the mortgage stress test but will miss out getting a better rate with someone else.  Homeowners looking to switch lenders will need to consider if they want to go through the mortgage stress test.  The more homeowners that decide to stay with their lenders, the lower the incentive will be for banks to offer renewal rates that are lower to gain new clients.

Where interest rates are concerned, since the Bank of Canada hiked up rates a year and a half ago, we will start to feel the impact in the months ahead. According to the Office of the Superintendent of Bankruptcy in Canada, October of 2018 saw a rise of 9.2% in insolvencies.  This looks like a trend that will continue for 2019 with a lot of homeowners struggling to keep on top of their mortgage payments.

If you are looking to apply for a mortgage or renew with someone else, give our Grande Prairie mortgage brokers a call today to see what options are there for you.

17 Jul

Tips on Saving for a Down Payment

Mortgages

Posted by: Gert Martens

Tips on Saving for a Down Payment

As a Grande Prairie mortgage broker, one of the biggest hurdles that many home buyers face is saving up for that big down payment.  This alone can often put people off of buying a home.  It doesn’t help that there are many myths about mortgages, such as you can’t buy a home without a 20% down payment. This isn’t actually the case though.  Many homes can be bought with as little as a 5% down payment.  If you are looking for ways to start saving for that down payment, here are some tips.

Visit a Grande Prairie Mortgage Broker First

This is an important first step because it will help to determine how much you can afford and what options are available in regard to a down payment.  The amount that you will need to save will vary greatly depending on each lender, as well as your credit score.  Our brokers are able to pull your true credit score for you to advise you on how much of a down payment you will likely need.  You can do this months in advance to give you more time to save and clean up any credit issues.

Open a Dedicated Savings Account

As an Alberts mortgage broker, my advice to new home buyers is to open a savings account specifically for your down payment.  Make sure there are no checks or debit cards linked to it. You can then transfer a certain percentage of your monthly income into this account regularly.

Get an Automatic Savings Plan

An automatic savings plan will help you save by rounding up your dollar amount on any purchases you make.  It then puts this into your designated savings account for you.  This is a good way to save without having to think about it.

Create a Budget

Creating a budget is a must if you want to start saving for that down payment.  A budget will help you determine exactly how much money you will have leftover after paying the necessary bills each week or month.  It’s that leftover money that will go into your savings.  Having a budget also helps you to make smarter decisions regarding how to spend what is left over.

As a side note, creating shopping lists of what you need and then sticking to it is another way to help you save.  This way you aren’t making impulse purchases when you are at the supermarket, buying “sale” items that you don’t really need.

Cash Instead of Credit

Using cash instead of credit for your day to day spending is a great way to make yourself aware of just how much you spend.  It will mean that you are less likely to splurge on things that are not necessary.  That money that you don’t waste on unnecessary purchases can be put into your special savings account to help build it up more.

Set Realistic Goals

One mistake I often see as a Grande Prairie mortgage broker is that people tend to focus on that big number that they need to reach when saving for a down payment.  My advice is to stop focusing on the big figure and break this down into smaller, more realistic amounts.  It’s easier to see how much progress you are making when you focus on saving $100 at a time.  That $20 or so will seem like much more in comparison to focusing on $1,000.

Save Extra Income

If you get unexpected cash or bonuses, put that into your down payment savings fund.  Whether it’s money you were given for your birthday or an unexpected small lottery win, every little bit helps you on your road to saving up for that down payment.

Saving for that down payment doesn’t have to feel like a huge hurdle to get over.  Give your trusted Grande Prairie Mortgage Broker a call today and I’ll help get you started on saving for that down payment.

7 Jun

Top Home Renovations That Pay Off

Mortgages

Posted by: Gert Martens

Top Home Renovations That Pay Off

If you are looking for ways to improve the sales value of your home, there are a few top renovations that pay off, along with some that won’t.  You can get advice on renovations that raise your property value from your Alberts mortgage broker before you take the plunge.  Knowing which renovations are overpriced and which are beneficial can save you a lot in the long run.

We’ve asked Alberta mortgage brokers what some of the top renovations are that will actually add value to your home.

Exterior Renovations

Curb appeal and first impression matter a lot with people looking to buy a home.  If your home looks uninviting from the outside, potential buyers may bypass it altogether.  Whether you are selling your home or not, these renovations will add value to your home.

Replacing Siding

This is a renovation that is well worth the cost and can raise the value of your home by nearly 75% of the cost of the project.  It makes your home exterior look new and fresh and, depending on whether you use foam backing, can further insulate the home.

Window Replacement

Any Alberta mortgage broker can tell you that replacing old windows with new vinyl ones looks great and has the added benefit of helping to keep your energy costs down.  Buyers are more willing to buy a home that has had new energy efficient windows put in over one that has old windows.  Most replacement window installation jobs will gain you up to 74% value on the cost of the job.

Roof Replacements

Not many people want to buy a home that has to have the roof replaced and prefer homes that have recently had a roofing renovation done.  It’s an essential upgrade to the home that adds value to the property and ensures the home is protected from the elements.

Interior Renovations

Minor Kitchen Renovation

You don’t have to gut your entire kitchen to add value to the home.  Minor kitchen remodels, such as upgrading the flooring, appliances, cabinets will add around 80% recoup value to your home.

Bathroom Remodeling

Just like a kitchen, you don’t have to tear out the entire bathroom to add to the value of your home. By updating your bathroom fixtures, tiles, and flooring, you can recoup about 70% of what you put into the remodeling when it comes time to sell.

Bathroom Additions

Having more than one bathroom in the home is often a key selling feature for many.  Even if it isn’t a full bathroom, you will see many homes fitting a downstairs toilet as an addition to the home.  You can add even more value if your bathroom is universally designed for safety, such as showers with support bars, wheelchair accessibility, and walk-in showers.  You can recoup from 60 to 70% value on the jobs overall cost.

Adding a Master Suite

Another big selling point in homes is those who have a master suite with its own bathroom.  Many people will pay more for homes that have this addition and you can add around 55% to the home’s value.

These are just a few of top renovations that pay off for your home.  For more ideas and advice on adding value to your home, visit your Alberta mortgage broker.

9 May

Mortgage Rates Explained

Mortgage Tips

Posted by: Gert Martens

Mortgage Rates Explained

The world of mortgage rates can seem like a minefield to many people. How do you get the best rate from your Alberta mortgage broker? First, we need to understand what a mortgage rate is.

Definition of Mortgage Rate

Basically, the mortgage rate refers to the interest that you pay for the money you have borrowed. It’s a fee charged for the use of that money borrowed. The interest rate, or mortgage rate, can be a fixed rate mortgage, adjustable rate mortgage, or variable rate mortgage. Whatever this rate is will have a substantial impact on the amount being paid back every month.

How Are Mortgage Rates Set?

It’s mainly the housing market that sets the mortgage rate, alongside the Bank of Canada and other large banks’ influence. One of the most influential is the residential mortgage bond market. So, the higher the yield of mortgage bonds, the higher the mortgage rate.

Regarding the types of mortgages, it is usually the fixed rate options that have the higher interest rates. This is down to a fixed rate locking in a particular rate of interest that cannot be increased throughout the mortgage’s term, regardless of a rise in mortgage rates. Also, longer-term mortgages tend to have a higher rate of interest than shorter-term mortgages.

Fixed, Adjustable, and Variable Rates

A fixed rate mortgage, as explained earlier, locks in a specific interest rate for the entirety of the mortgage term. The benefit with this option is that there will be no surprise changes should the interest rates suddenly shoot up. However, should they drop lower than your fixed rate, you may end up paying more than you would with the lower market rate.

An adjustable rate mortgage means that both the interest rate and mortgage payment amount will vary based on the conditions of the housing market. You generally start with a lower rate of interest that will change after a period, for example 5 years. This is a good option if you plan on moving before that 5 year period is up.

A variable rate mortgage means your mortgage payments and interest rate fluctuates depending on the housing market. This one is considered a bit risky because you can end up paying more if the interest rates shoot up. Your Alberta mortgage broker may start you off with a low rate for taking the risk. This is an option that isn’t always viable for those who are on a strict budget though. Your Alberta mortgage broker can guide you on the best option for your situation.

Conventional and High-Ratio

Conventional mortgages are those where the buyer has paid at least 20% of the homes purchase price and the lender pays 80%. A high-ratio mortgage comes into play when you make less than the 20% down payment of the value of the home. This means that the lender covers up to 95%. A high-ratio mortgage requires insurance against any payment defaults, but the interest rates tend to be lower.

Open and Closed Mortgages

Closed mortgages mean you pay the same amount every month for the entire mortgage term. This is a good choice if you need a fixed payment schedule and you don’t plan on moving or refinancing your mortgage before the mortgage term ends.

With an open mortgage, you can make a lump sum payment at any given time, and it can be paid off before the term without being charged a penalty. Open mortgages are a good option for those who plan to sell their homes in the near future, or who want to have the flexibility of making large lump sum payments. These mortgages tend to have a higher interest rate than a closed mortgage.

There are many options where mortgage loans are concerned. Speaking with an Alberta mortgage broker means you will get a deal that suits your needs and situation.

15 Apr

Is a Pre-Approval Letter Necessary to Make an Offer?

Mortgages

Posted by: Gert Martens

Now that we are officially in the spring season, that means we are approaching the peak time to buy a home. Most home buyers wait until spring to purchase a house because that is when the real estate market is most active.

As a first-time homebuyer, you should start preparing all the pertinent documentation and getting your finances in order. Make sure you schedule an appointment with your mortgage broker in Alberta so they can walk you through the application process.

So, to help you get started, Gert Martens with Dominion Lending Centres has explained what exactly a mortgage pre-approval letter is and if one is required to make an offer on a home.

 

What Is A Mortgage Pre-Approval Letter?

A mortgage pre-approval letter is when your broker reviews all your financial documentation and will run a credit check on your finances to see what your debt-to-income ratio is. This will help them determine how much you would be able to borrow for your Alberta mortgage.

Now you do not need a mortgage pre-approval letter in order to put an offer on a house, however, there are many benefits that come with getting pre-approved.

 

Benefits Of A Pre-Approval Letter

As mentioned above, your mortgage broker will review your financial documents and let you know how much you’ll be able to borrow. This means you will know what price range to shop in once you start viewing different houses. Knowing this can save you time so you don’t view a home outside your budget.

Another benefit of receiving a pre-approval letter is that it gives you more credibility with sellers. This letter shows sellers that you are financially fit enough to become a homeowner, which means they will be more likely to choose your offer over someone who has not been pre-approved.

 

Contact Us

If you would like to learn more information on the benefits of receiving a pre-approval letter or if you are looking to apply for an Alberta mortgage, please contact Gert Martens with Dominion Lending Centres at 780-933-0109.

8 Mar

Market Update – Grande Prairie and Surrounding Area

Mortgages

Posted by: Gert Martens

Most potential homeowners feel the best time to purchase a home is during the spring and summer months. This is due to the fact that experts on the Home Garden and Television network (HGTV) state that is when the peak season to buy a home is. However, this creates an influx in buyers since everyone is waiting until then to make their purchase and to apply for an Alberta mortgage. This means that mortgage rates have risen and there is an increase in competition for homes.

So, to avoid looking for homes in the spring and summer months, consider purchasing your home now, this winter. By working with a mortgage broker in Alberta, you will receive low rates on your home loan and can take your time viewing whichever homes you are interested in.

To help you get started in the home buying process, your local broker, Gert Martens with Dominion Lending Centres, has listed the most recent market update for Grande Prairie and Surrounding Areas.

 

Grande Prairie and Surrounding Areas

Market Update

In regards to Zolo.ca, Alberta has approximately 4.1 million inhabitants and this region spreads over 642 kilometers. Grande Prairie is among one of the more popular cities in this area and there are currently 759 different property types available for purchase.

In 2018, the Grande Prairie region had a strong year for residential sales. This is mainly due to the increase in production from the oil and gas companies. Experts are predicting another strong year for the area, which means housing prices are expected to increase. Therefore, if you are considering applying for an Alberta mortgage and would like to purchase a home in Grande Prairie, it would be in your best interest to do so now before the rates get even higher.

As for the surrounding areas, such as in Peace River, there are currently 145 different properties for sale and 100 of those properties are single, detached homes. Please reach out to your local Alberta mortgage broker for more details.

 

Contact Us

If you would like to receive more information on the market update for the Grande Prairie and surrounding areas, please contact Gert Martens with Dominion Lending Centres at 780-933-0109.

16 Nov

Benefits of a Second Mortgage

Mortgages

Posted by: Gert Martens

If you are currently a homeowner and have been making regular payments on your mortgage every month, you could have accumulated a substantial amount of equity in your home. Your home’s equity is the difference between what you owe on your mortgage and your home’s overall value, meaning that the more payments you make towards your mortgage, the more equity you could have in your home.

Having an increase in home equity opens up a lot of doors for homeowners that they might not have ever thought about. This includes obtaining a second mortgage. So, to help provide some clarity, Gert Martens, your local mortgage broker, has explained what a Grande Prairie second mortgage is and the benefits in obtaining one.

 

What Is A Second Mortgage?

A second mortgage is an additional home loan that is taken out on your house, where your home is put up as collateral in case you default on your payments and are unable to pay back your broker. This mortgage does not replace your original mortgage, it is in addition to. This means that you will have to make two separate payments towards your mortgage every month.

In order to qualify for a Grande Prairie second mortgage, the requirements are the same as when you applied for your first mortgage, which includes having a steady income and a good credit score. Also, it is important that you are not in large amounts of debt. You will not be approved for a second mortgage if you owe too much on your first mortgage, so be sure and pay off your home loan as much as you can before you apply.

 

Benefits Of A Second Mortgage

When you obtain a second mortgage, you gain access to a large sum of money by tapping into your existing home equity. Once you have this money, there are no restrictions on what you can use it for. So, if you wish to purchase more real estate with this amount, you can. Or, you can use this money to help pay for your child’s college tuition or you can even pay off any loans you may have accumulated over the years. Taking out a second mortgage can also be used to fund a luxurious vacation or purchase a dream car.

 

Get Started Today

Whatever the case may be, a Grande Prairie second mortgage can offer you immense financial benefits. So don’t wait, contact your local mortgage broker, Gert Martens, today at 780-933-0109 to get started!

8 Oct

Mortgage Calculators

Mortgages

Posted by: Gert Martens

Congratulations on making the decision to purchase a home. There are a lot of benefits to homeownership such as more privacy, it’s a great financial investment, there are some initial tax benefits, more creative freedom, and home equity. Making sure you have the appropriate amount of finances so you can afford a house and start reaping these benefits of home ownership is the first step of the loan approval process.

Reviewing your finances and using a mortgage calculator is a convenient way to stay on top of your expenses and help you become more organised. So, to help you get started, your local Grande Prairie mortgage broker, Gert Martens with Dominion Lending Centres, has listed the usefulness and importance of mortgage calculators.

Mortgage Calculators

A mortgage calculator is a useful tool where you can find out what type of mortgage payments you will have depending on the type of home you are looking for. With this device, you can manually type in the sale price of the home you want, the down payment percentage you are thinking about paying, the length of the mortgage you are interested in, and the annual percentage interest rate.

Once you input all this information, multiple different factors are calculated. The calculator will provide information on how much you would owe if you were to make a 10% down payment on a $150,000. It is important to note, however, that if you pay below 20% on your down payment in Canada, you will be required to obtain mortgage default insurance.

Your mortgage calculator will also tell you what the amount that would need to be financed is, your monthly payment with principal and interest as well as what your monthly payment would be if you had to pay mortgage default insurance on top of your Grande Prairie home loan payments.

Regardless if you are a first-time home buyer or are refinancing your home, a mortgage calculator is free to use and can help you see what your affordability is before you begin the application process. Please click HERE to try out our mortgage calculator today!

Contact Us

For more information on mortgage calculators or to get started on your application for a Grande Prairie home loan, please contact Gert Martens at 780-933-0109.

13 Sep

Tips For Renewing Your Mortgage

Mortgages

Posted by: Gert Martens

Renewing your mortgage has a lot of added benefits, such as shortening or extending your loan’s amortization period, receiving the current low-interest rates, or to consolidate your debt. Whatever the case may be, there are a few tips you should know before you begin the mortgage renewal application process.

So, to help get you started, your local Grande Prairie mortgage broker, Gert Martens with Dominion Lending Centres, has listed 5 useful tips for renewing your mortgage.

Tip #1: Shop Around

Most homeowners don’t realise that you do not have to stay with your current mortgage broker if you wish to renew your mortgage. Instead, shop around and compare different lenders prices with one another so you who is offering the best rates. It is also worth noting that you will not be charged a fee if you switch brokers, so there is no harm in shopping around and comparing prices.

Tip #2: Review Your Finances

Before you begin the renewal process for a Grande Prairie mortgage, review your finances and come up with a financial goal so you are prepared when you go in to speak with a broker. Having a plan and sharing it with your broker can help them understand what exactly you are hoping to achieve with your mortgage.

Tip #3: Good Credit

Your credit score still largely affects the type of rates you will receive on your mortgage renewal, just as it affected your primary mortgage. Therefore, make sure you have good credit before you apply or you risk the chance of your application getting denied.

Tip #4: Pay Down Debt

Grande Prairie mortgage brokers will be more inclined to reject your application if you have large amounts of debt. So, before you begin the application process, pay off any high-interest debt you may have. This can also help increase your credit score.

Tip #5: Don’t Accept A Bank’s Posted Rate

A bank’s posted rate may seem like the cheapest option but it is not. Instead, negotiate with a bank first to see how low they are willing to drop their rates. You may even want to consider using a mortgage broker so they can find you the best rates on the market.

Contact Us

For more information on tips for renewing your mortgage or to begin your Grande Prairie mortgage application, please contact Gert Martens with Dominion Lending Centres at 780-933-0109.