Pourquoi ne pas faire comme tous ces courtiers qui joignent les rangs des Centres Hypothécaires Dominion?   Grâce à nos outils technologiques et exclusifs, combinés à la vision de l’entreprise et de ces leaders, vous serez en mesure d’élever vos affaires au niveau ultime.

Préférez-vous être dans le siège du passager ou bien côté pilote???

Pensez-y!!!

Renew (the mortgage industry meaning): to remain with the current lender by simply signing the renewal letter that comes in the (e)mail.

Switch (again, the mortgage industry meaning): to move from the existing lender to a different lender without leveraging any additional funds/equity; the outstanding balance remains the same.

Is renewing your mortgage with the current lender the best option, or should you consider switching to a new lender? The answer is provided with some simple math. As mortgage consumers, we want to save as much money as possible, plain and simple.

Seventy percent of borrowers that currently hold a mortgage simply sign the renewal letter they get. Most of the time they are leaving 20 – 40 basis points or 0.20% – 0.40% on the table. This puts millions of dollars back into the pockets of the lenders and their shareholders.

There are times when the current lender does not offer the best market rate or product for your situation. How will you know you are getting the best rate for your scenario? By contacting Dominion Lending Centres Mortgage Professional who works for you… not the lender.

So first things first: contact your DLC Mortgage Broker four months before the term matures to discuss the next term’s strategy. What do the next two, three or even five years look like? This will then lead to an interest-rate discussion. Can there be some money saved?

I have been working with a client over the past couple of weeks as her current mortgage is coming to maturity. Had she just signed at the bottom of the renewal letter she would have been overpaying by 30 basis points.

Current lender offered 2.84% for a 5-year Fixed term (Renew)

New lender offered 2.54% for a 5-year Fixed term (Switch)

Here’s what that looks like. Note the mortgage balance used was $330,000 (25-year amortization). This just happens to be the average mortgage amount in British Columbia.

The biggest saving is in the total interest saved over 5 years. At the end of the day this borrower saved $4,656.50. Guess what she decided to do? Yes, SWITCH lenders.

In this scenario, it will cost the borrower $0 to make a switch. Would you put four 1000-dollar bills, six 100-hundred-dollar bills, one 50-dollar bill, one five-dollar bill, one loonie and two quarters in the fire? No, you would not.

Bottom line, make sure you have a discussion with your independent Mortgage Broker before (potentially) burning thousands of dollars.

Since 2012, it’s become the wild west of mortgage options out there for those folks who are living the Canadian dream of being Self Employed (also known as BFS, Business for Self). 

In 2012, the Office of the Superintendent of Financial Institutions introduced Guideline B-20, which required federally regulated banks to tighten the rules for approving mortgages. Without boring you with what that mortgage jargon translates to you, the bottom line means you “generally” have to qualify now from your Line 150 of your tax return. That’s NET income, not GROSS income.

Don’t freak out yet! There is good new below…

As BFS folks, one of the perks of being self-employed is we don’t pay as much in taxes as we have business write offs we can use to lower our GROSS income. We are now being penalized with many lenders with higher rates and fees with these new rules.

I wish there was a simple book with straight up rules for the BFS mortgages, but there really isn’t.
Why?
• It depends on your credit
• It depends on where your income is coming from and how long. Is it commissioned, contract, invoiced, under the table or under your mattress?
• It depends on your down payment.
• It depends on so many factors…hence you really need a mortgage consultant who really understands BFS mortgage programs.
There are a few programs you may fit under: Stated Income, BFS Conventional, or Alternative or Private lender. All of them are slightly different, but you will fit somewhere with someone.

Not to pick favourites, but here are a few lenders and their programs (through your Dominion Lending Centres mortgage professional):
• B2B Bank has a fantastic BFS Expanded Program (actually nine in total) that allows 12 months of bank statements showing income vs those Notice of Assessments. They also don’t charge any mortgage premiums or fees!
• Street Capital has an insured Stated Income to 90% (i.e. 10% down payment) program. You have to be two years in business filed, 5% of your down payment has to come from your own savings, and no “commissioned sales” folks here.

Common Questions I get:

Q: I was working with a company as a computer systems analyst for the past three years. Now I am self employed as a computer systems analyst. Can I still qualify for a mortgage with less than two years as filed self employed?
A: Yes, as long as you are in the same job role, you should have no issues.

Q: I heard you need 20% down to qualify for Self Employed Mortgage.
A: There are a few lenders that allow for 10% down now.

Q: I am a waitress and make most of my money in tips. How can I use this to qualify for a mortgage.
A: If you’re not declaring your tips on your taxes, then some lenders will look at 6 months deposits into your account.

Q: Can I refinance to pay off my Canada Revenue debt I owe:
A: Yes, very common practice.

Kiki’s Korner of Self Employed mortgage tips:
1. Keep your business money deposited in one account. Separate your expenses and your income accounts.
2. Leases or Loans on vehicles for business should come out of your BUSINESS account.
3. If your company is paying you a “stipend” or “allowance” for you vehicle, make sure it’s taxable income. You will need two years to use this as income.
4. Make sure your invoices match your deposits.
5. When depositing “other monies” i.e.: tips, tag it on your deposit slip so it shows up online with your deposit.
6. Keep important documents such as articles of incorporation, GST/HST registration or business licence in one folder with all your tax returns. Keep records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for seven years if you file a claim for a loss from worthless securities or bad debt deduction. Be organized.
7. If you’re not filing business financials, file T2’s if you are incorporated. Filing business financials may be more expensive, but worth it for mortgage qualifying with more lenders.
8. If you pay yourself dividend income, you will need two years of this form of income.

If you’re in business for yourself, congratulations! Keep up the good work. There are many moving parts to planning and qualifying for a self-employed mortgage, so if you’re just starting to look at the idea of a mortgage – plan NOW!

I too am self-employed and work with many professionals such as lawyers, doctors, pharmacists, management consultants and self-employed folks such as truck drivers and waitresses. You’re all important and have different incomes we can use to make your dream come true.