Mortgage Refinancing: When Does It Make Sense?

In response to the COVID-19 pandemic and in an attempt to protect the economic future of Canadians, the Canadian Mortgage and Housing Corporation (CMHC) announced in early June that it would be tightening its qualification rules for mortgage insurance from July 1, 2020. Fortunately, they are two other mortgage insurers: Genworth and Canada Guarantee and neither of them are changing their qualification rules. The CMHC policy change will only restrict those who want to buy a home with less than a twenty percent down payment, have a credit score lower than 680, and if they will be able to qualify based on a lower limit on gross and total debt servicing ratios. This will mean that some potential homebuyers will have to continue renting due to their inability to qualify for a mortgage. It may also push those who were working and were on the fence about buying to rush to get into homeownership not knowing there are other mortgage insurer options available through a mortgage broker. The soon-to-be-implemented mortgage rules are created to provide a view to the greater world that our federal government is taking measures to limit personal debt. The month of June has seen a short-term burst of buying while the month of July will likely see a drop in the real estate sales market as a result of both the policy change and pent up buyers from COVID-19. For rental housing providers, the new change will imply that there will be more tenants for longer as tenants may be unable to qualify for a mortgage or the mortgage amount they want, as they will need to increase income or reduce debt to do so. This translates into a greater opportunity for wealth growth by real estate investors as real estate is the most stable investment for long-term wealth growth. For CMHC, it will lower their insurance portfolio risk and thus that of the federal government. For the other mortgage insurers such as Genworth and Canada Guaranty, it is an opportunity for them to take a greater market share by not following CMHC in these policy changes. This policy will end up helping CMHC fulfill its real estate market projections. What better way to ensure your predictions than to influence the market by putting in new policies that will help to fulfill what you predict. In this case, limiting buying power which may translate to fewer sales. Unfortunately, this means tenants will remain tenants for as long as the federal government continues to create a nation of renters one policy at a time. As a potential homebuyer, it is evident that it may be much more difficult for you to qualify for a mortgage. Therefore, now more than ever, it is imperative to enlist the services of an expert mortgage broker to help you find out whether you can qualify for a mortgage. If you’re looking for a licensed mortgage broker or specialist in Calgary, Alberta, get in touch with Keith Uthe. I represent you, the client, to multiple lenders so that you have the largest selection of lenders, best terms, and the opportunity to achieve your homeownership goal. I work with many lenders who do not have to use only CMHC as their mortgage insurer. As long as other mortgage insurers do not follow suit on the policy change, I will continue to offer options for High Ratio insured mortgage clients. For my real estate investor clients, this policy should mean many tenants will likely remain tenants for long, thus making the rental housing provider market stronger. As an independent mortgage specialist with Mortgage Alliance Enrich Mortgage Group and a Legacy Certified Real Estate Investment Advisor, I have the knowledge and qualification needed to fulfill my clients’ requirements. By offering my clients quick and effective mortgage solutions, I not only guarantee them results they desire but also enable them to capitalize on growth opportunities to secure their future. I provide a range of professional mortgage services to clients across Calgary, Red Deer, Lethbridge, Edmonton, and Medicine Hat in Alberta. To learn more about the services I offer at Keith Uthe Demystifying Mortgages, please click here . For more information about how this policy change may impact you or if you want to book a free consultation, get in touch with me by clicking here . Alternatively, if you know someone who is considering buying a new home, have them contact me now to discuss their mortgage options.

In the intricate dance of real estate transactions, parents often find themselves in a pivotal role when it comes to helping their children purchase a home. With the soaring costs of homeownership, many young adults turn to their parents for financial assistance, whether it be in the form of a down payment gift or by co-signing the mortgage. While these gestures can be invaluable in helping children achieve their homeownership dreams, they also come with a set of considerations and responsibilities that parents should carefully weigh. Here, we delve into the key considerations for parents co-signing mortgages for their children. 1. The Dynamics of Co-signing Mortgages Co-signing a mortgage entails more than just providing a financial guarantee. It involves assuming shared responsibility for the loan alongside the primary borrower(s), typically the children in this context. One of the primary implications of co-signing a mortgage is that it affects the credit profile of all parties involved. Any missed or late payments will reflect on the credit reports of both the primary borrower(s) and the co-signer(s), potentially impacting their creditworthiness and future borrowing capabilities. 2. Ownership Structure and Legal Implications Beyond financial obligations, co-signing also extends to property ownership. All borrowers, including the parents as co-signers, will be registered on the title of the property. It's crucial to have a conversation with a legal expert to determine the most suitable ownership structure—whether as joint tenants or tenants in common. Joint tenancy implies equal ownership shares, while tenants in common allow for customized percentage ownership. 3. Exit Strategies and Flexibility Parents considering co-signing mortgages should also explore exit strategies to mitigate long-term commitments. Some lenders offer provisions to remove co-signers from the mortgage after a specified period, typically one year, provided the remaining borrower(s) demonstrate sufficient financial capacity to sustain the loan independently. Alternatively, transferring the mortgage to a different lender or refinancing the mortgage with the primary borrower(s) alone can facilitate the removal of co-signers, albeit subject to qualifying criteria and market conditions. 4. Tax Implications and Financial Planning It's essential to consider potential tax implications associated with transferring ownership or refinancing the mortgage. If the property serves as the primary residence for the children, removing parents from the title or mortgage may not trigger immediate tax consequences. However, changes in property use, such as converting it into a rental property, could have tax implications. Consulting with a qualified accountant is advisable to navigate the complexities of tax laws and ensure compliance. In the realm of real estate financing, the decision to co-sign a mortgage for a child involves careful deliberation and foresight. While it can be a meaningful way to support their homeownership aspirations, it's crucial for parents to understand the implications and responsibilities associated with this commitment. At Keith Uthe Demystifying Mortgages, we specialize in simplifying the complexities of mortgage financing, empowering clients to make informed decisions. If you're considering co-signing a mortgage or exploring other financing options, we're here to help. To learn more about our services and how we can assist you in navigating the complexities of business finance, please click here . If you have any questions or require further assistance, feel free to contact us at  (403) 614-8843  or email us at  keith@enrichmortgage.ca  .

Debt consolidation—it's a term you may have heard thrown around in financial circles, but what exactly does it entail, and why should you consider it? In today's economic landscape, managing debt can feel like navigating a labyrinth of high interest rates and multiple payment deadlines. However, there's a beacon of hope in the form of debt consolidation, a financial strategy that can offer a plethora of benefits for those seeking to regain control of their finances. 1. Streamlined Payments One of the primary advantages of debt consolidation is the consolidation of multiple debts into a single, manageable payment. Rather than juggling various due dates and interest rates, debt consolidation allows you to combine your debts into one monthly payment, simplifying your financial obligations and reducing the risk of missed payments. This streamlined approach not only minimizes the stress associated with managing multiple accounts but also provides a clearer picture of your overall financial standing. 2. Reduced Interest Rates High interest rates can significantly impede your progress in paying off debt, as a considerable portion of your payments may go toward interest rather than reducing the principal balance. Debt consolidation can help alleviate this burden by potentially securing a lower interest rate on your consolidated loan. By obtaining a consolidation loan with a lower rate than your existing debts, you can save money over time and expedite your journey toward debt freedom. 3. Lower Monthly Payments For many individuals struggling with debt, the weight of monthly payments can feel overwhelming. Debt consolidation can offer relief by extending the repayment period and reducing the amount you owe each month. While spreading payments over a longer term may result in paying more interest over time, the immediate benefit of lower monthly payments can provide much-needed breathing room in your budget, allowing you to allocate funds toward other financial goals or necessities. 4. Improved Credit Score A key component of your credit score is your credit utilization ratio—the amount of available credit you're using compared to your total available credit. High levels of debt can negatively impact this ratio and lower your credit score. By consolidating your debts and paying them off with a consolidation loan, you can lower your credit utilization ratio, potentially boosting your credit score over time. Additionally, making timely payments on your consolidation loan demonstrates responsible financial behavior to creditors, further enhancing your creditworthiness. 5. Enhanced Financial Management Beyond the immediate benefits of simplified payments and reduced interest rates, debt consolidation can facilitate a fundamental shift in your approach to personal finance. By consolidating your debts, you're taking proactive steps to regain control of your financial situation and work toward a debt-free future. This newfound sense of empowerment can inspire greater financial discipline and awareness, leading to improved money management habits that extend far beyond the realm of debt repayment. In conclusion, debt consolidation offers a multitude of benefits for individuals seeking to overcome the burden of debt and achieve greater financial stability. From streamlining payments and reducing interest rates to improving credit scores and enhancing financial management skills, the advantages of debt consolidation are clear. If you're ready to take control of your finances and explore the possibilities of debt consolidation, Keith Uthe Demystifying Mortgages is here to help. At Keith Uthe Demystifying Mortgages , we specialize in simplifying the mortgage process and empowering our clients to make informed decisions about their financial future. Whether you're interested in debt consolidation or exploring other mortgage solutions, our team is dedicated to providing personalized guidance and support every step of the way. To learn more about our services, please click here . If you have questions or would like to schedule a consultation, we'd be happy to hear from you. Please feel free to call us at  (403) 614-8843  or email us at  keith@enrichmortgage.ca  .

Are you a first-time home buyer in Canada? If yes, then the thought of buying a house might seem like a daunting task. The truth is, obtaining a mortgage is not as complicated as it seems. With the right assistance, you can easily navigate the mortgage process and become a proud homeowner. As a reliable mortgage agent in Calgary, Keith Uthe Demystifying Mortgages is here to help you every step of the way. In this blog, I'll guide you through essential steps for first-time home buyers in Canada to obtain a mortgage. By the end of this article, you'll have a better understanding of what it takes to secure a mortgage and be well on your way to homeownership. Before we dive into the steps, let's understand why obtaining a mortgage is relevant to you as a first-time home buyer. Owning a home is a significant investment that comes with numerous benefits, such as stability, financial security, and a sense of pride. However, buying a home requires a considerable amount of capital, which is where a mortgage comes in handy. A mortgage is a loan you take out to finance your home purchase, and it's essential to understand how to obtain one to make your homeownership dream a reality. Assess your Financial Situation The first step in obtaining a mortgage is to assess your financial situation. It would help if you looked at your credit score, income, and expenses to determine how much house you can afford. Your credit score is a critical factor when it comes to securing a mortgage, and you should aim for a score of at least 620. Lenders also consider your gross-debt service (GDS) and total-debt-service(TDS) in your debt-to-income ratios. Your GDS needs to be below 39% and your TDS below 44%, which should be below 43%. Get Pre-Approved for a Mortgage Once you've assessed your financial situation, the next step is to get pre-approved for a mortgage. Pre-approval is a process where a lender evaluates your financial information and determines how much money they're willing to lend you. This step is crucial as it helps you understand your budget, and it also shows sellers that you're a serious buyer. Find the Right Mortgage Product Finding the right mortgage product is essential to ensure that you get the best rates and terms for your specific situation and goals. What may be right for you is likely different than it was for your friend or family member. There are different types of mortgages available, such as fixed-rate and adjustable-rate mortgages. Fixed-rate mortgages have a set interest rate that doesn't change, while adjustable-rate mortgages have a fluctuating interest rate. There are many terms that make up part of a mortgage and all need to be considered with one of the key ones being early payout penalties, which is often overlooked, yet has the largest financial impact or raodbloack when rates drop. It's crucial to consider your financial situation and goals before choosing a mortgage product. Gather the Required Documents To obtain a mortgage, you'll need to provide certain documents, such as your pay stubs, tax returns, and bank statements. It's important to gather these documents early in the process to avoid delays. Submit your Application Once you've gathered the necessary documents, it's time to submit your mortgage application. Your lender will review your application and let you know if you're approved for the mortgage. Close the Deal If your application is approved, the next step is to close the deal. This process involves signing the mortgage agreement and paying any closing costs. Obtaining a mortgage as a first-time home buyer in Canada might seem overwhelming, but with the right assistance, it can be a smooth process. At Keith Uthe Demystifying Mortgages , I offer customized solutions to meet your unique needs. My team has an intimate knowledge of the lending environment, allowing us to navigate the market and find the best options that work in your favour. Contact me today to start your journey toward homeownership . To learn more about the services I offer, please click here . To get in touch with me, please click here or give me a call at  (403) 614-8843  .