Federal Budget 2019- What’s changed?

General 27 Mar

Our take on the March Federal Budget Announcement for Grande Prairie Homebuyers

  March 27, 2019. Our office has received a ton of questions about the March Federal Budget Announcement for Grande Prairie. This included incentitives planned for first-time hombuyers.

  The only immediate change, is that first time buyers can use up to $35,000 in RRSP money for down payment, up from the previous $25,000 allowed.  You will still need to re-invest this into an RRSP within a 15 year time frame.  If you take out $35,00 that means you should put at least $2,333 back into your RRSP each year. Should you forget to return money to your RRSP, the goverment will have you pay tax for each forgotten portion.

First Time Home Buyer Incentitive 

  The second announcement by our federal government introduced the First-Time Home Buyer Incentive.  The Canada Mortgage and Housing Corporation will provide first-time buyers up to 10% of the purchase price of a new construction home. They will also give 5% of the purchase price for a resale.  There’s no clear plan for how you the borrower will be required to pay for the loan. This leaves many questions unanswered, and makes it impossible to predict the benefits of this incentive.  It remains very unclear if the government will take an equity position in your home or if you would have an interest-free loan.

You need to understand how this loan will be repaid

  For borrowers, understanding how this loan is required to be repaid is important.  If the government is taking an equity stake in your home, the amount that you the homeowner would have to repay will grow as the value of your home increases.  In this case, I question if this is a good thing for borrowers at all? Potentially you are giving up a lot of your equity at sale time. 

DLC’s Economist, Dr. Sherry Cooper, had this to say about the budget announcement,

“It’s all about increasing demand for housing without doing much to increase supply, and you don’t need to be an economist to know that if you increase demand without increasing supply, you’ll end up with higher house prices, which is the oppose of the intention.”

Encouraging new construction would have been better

  Rather than encouraging more buyers to compete for inadequate housing inventory, Cooper believes construction inducements would have been more beneficial.

“The government could have done things to increase supply, like changing the rules around zoning and the Greenbelt to open up more land,” she said. “They could even subsidize housing construction or eliminate some of the red tape and other delays in construction. There are other things that could have been done to incentivize the construction of new housing.”

March 2019 Mortgages Rates started Falling!

This week our 1 year mortgage rate, 2 year mortgage rate and 5 year mortgage rate all dropped here in Grande Prairie. Watch out for those falling rates!This week we are excited to share that rates are falling! Our 1 year, 2 year and 5 year rates have all dropped!

  The March Federal Budget Announcement for Grande Prairie has also placed limits on the First-Time Home Buyer Incentive:

  • Maximum household income of $120,000
  • At this time only purchase price’s below $400,000 will qualify.

These will further limit how useful this program is for you!

 As we are made aware of updates to this announcement, we’ll let you know!

 

 

Grande Prairie mortgage broker answers questions on the federal budget and it's impacts on buying a home in 2019

Megan Lemay, managing Broker at HT Mortgage Group has had many clients contaact her with questions since the federal govement announced the 2019 Federal Budget!

What’s the difference between a broker and a bank in Grande Prairie?

General 6 Mar

What’s the Difference between a Broker and a Bank in Grande Prairie?

Choice! Your mortgage broker will help sort through a variety of lenders, to find the lender that suits you best. Different lenders will accept different types of income, have different underwritting policies or different ways of lending. And of course, since we work for you, not the banks – we negotiate a better mortgage rate for you.

 

Different Lenders Accept different types of income

Getting the best mortgage in Grande Prairie, go to a mortgage broker to be given options

What’s the difference between a broker and a bank Grande Prairie? Well a broker gives you a host of different lenders and rates to choose from, the bank just offers rates itself. (And often not as good of a rate as they could offer – how do you get that bonus otherwise?)

Have you ever gong to a bank for a mortgage and heard, ” I’m sorry your dream home is out of reach given your income?”. Although you might be out of luck at that bank, it doesn’t mean you should stop trying! There are a variety of incomes that some banks will not use to qualify you for loans. Child tax benefit, rental income, vehicle allowances are just a few types of incomes that not every lender will accept.

Let’s look at rental incomes.

My Home in Grande Prairie has a $200,000 mortgage, so $1250 a month, and I have a lease for $1800 a month.

  1. Lender 1 – $1700-1250 = $450 x 50% = net rental income $225 a month
  2. Lender 2    – $1250 x 1.4 = $1750      $1700- $1750 = net rental income $-50 a month
  3. Lender 3 – Only considers rental income as a valid income with two years history of rental income on T1 general tax documents. You have a good accountant who has made it possible to record a capital loss both years. Averaging out the rental income reported to the govement over two years…. Net rental income $-100 a month.

Given a choice rental property owners would choose Lender 1.  “But how do I find out which lender has the best rental income formula?” Well that’s where calling your broker comes in. We spend all week, week after week understanding and learning which lender is best for various situations. Your banker… may be able to expain how they calculate rental income, but they will not have any indepth or accuate knowledge on how the competitors calculate rental income. So call a broker, they specalize in this sort of comparision.

Child Tax Benefit Income

Truthfully there are very lenders who will accept child tax benefit income, but if you need just a little more income to qualify for that dream home we know of a couple that lend in Grande Prairie. The same applies to how much overtime you can use to qualify, or if you can use a vehical allowance. Not every lender accepts ever income type, so trust your broker to find a lender that maximizes and makes use of multiple income sources.

 

Different Mortgage Types Between lenders

Fixed Rate or Variable? Reverse mortgage or a Home Equity Line of Credit? Manulife One account or a flex down mortgage? Interest Rate adjustible Penalty or three months interest? Open mortgage or closed? Portable? Able to end mortgage term without fee’s if I’m dead?

The Canadian mortgage space has many unique products. One great example is the CHIP Home Equity Reverse mortgage, which can help lower income seniors solve cashflow issue’s. (A senior with lowered income may not qualify under normal refinance programs.) We also have access to flex-down mortgages which can allow a portion of your mortgage to be interest only. Ideal for rental property owners trying to lower borrowing cost’s in the short term.

 

We work for you, not the banks!

 

Working hard to increase our website SEO in Grande Prairie

Jillian Napen, Office Manager at HT Mortgage Group, Part of Dominion Lending Centres in Grande Prairie

Total Cost of Buying a Home in Grande Prairie

Jillian Napen 20 Feb

Cost of Buying a Home in Grande Prairie? Any hidden fees?

This week I will talk about the cost of buying a home in Grande Prairie.

Although I bought my home back in 2015, I’m lucky enough to work with new mortgages and purchase’s everyday here in Grande Prairie, so this will be as detailed as I can give you.  Here’s a breakdown of what I spent.

I’ve signed the purchase agreement for my new home here in Grande Prairie. My mortgage broker has verified that I have enough downpayment but….

What is the cost of getting a mortgage in alberta 2019?

“What other cost’s should I expect when buying my home?

Legal Fee’s

First I’ve called a lawyer for a quotes.

“Could I get a quote for legal fee’s on this $250,000 house I’m purchasing here in Grande Prairie?”

 I would expect legal fee’s for a home purchase to run around 0.5% of the purchase price.  So $250,000 home x 0.05% = $1250.  A $500,000 home will have a cost around $2500. This will vary between lawyers so call for quotes!

My lawyer will help me purchase title insurance, $160 for a $250,000 home in Grande Prairie, and roughly $300 for a $500,000 home.

Home Insurance

Next I’ve called a home & auto insurance company for a home insurance quote. If I’m lucky my new insurance company won’t make me do too much legwork. I’m prepared to answer questions like:

” How old is the roof of your new home? How old is the hot water heater? Is the basement carpeted or tiled?”

My current home insurance policy costs me $120 every month. You are required to have home insurance to get a mortgage. So expect to pay between $120 to $220 a month on homes priced between $250,000 to $500,000.

 Another insurance to get is for your personal protection- life & disability insurance. For me on a $250,000 home Life Insurance was $17 a month, and disability was $37 a month. These rates will change based on your health and age. I was 25 and darn healthy.

    • Mortgage Default Insurance:  if you put less than 20% down on your house, you are getting default insurance. You don’t have to worry about saving up, as every mortgage company in Canada just adds it to your mortgage.  The cost varies based on your downpayment vs purchase price. Check out this CMHC calculator to estimate it based on your next home purchase. ( 5% down on a $250,000 home – $11,400 for default insurance.)
    • If you avoid mortgage default insurance you may pay $200-$400 for an appraisal. (You also may need an appraisal if there’s something strange about your new home. Wood Foundation? Used to be a church?)
    • Watch this video to learn more about default insurance

Cleaning Supplies

This was an expense I never expected for my first home. You move into your lovely new house and then slowly realize…. I need a broom, kitchen scrubs, rakes, shovels! you need dish towels, disk racks, spoons, tea kettle, spices…. It adds up.

If you can try to negotiate for “Backyard Shed including contents” to avoid having to buy yard supplies. I’ve never seen a purchase agreement negotiate for the cleaning supplies closet to be left fully stocked, but I would have saved so much.

As well,Budget another $500 to stock your house up with all the cleaning supplies, brooms, mops, linens, pot and more that a house requires. You could of course spend way more than this…. Try to hold off purchasing the diamond crusted broom till month two.

Furnishing your New Home

This… you can spend so much on furniture so quickly!  The most subjective cost out of all the categories. My best advice is take it slow. Enjoy the freedom of having no furniture. Being minimalist is very chic for 2019. Budget $500 for the first two months and see how far you can stretch it.

 

Don’t go out and buy all new furniture with a monthly payment plan. Wait a year.

Utilities

Start calling at least two weeks in advance before your move-in date to get your services set-up.

Internet: $90/month

Heat & Electric on a combined bill: $228/month

Water & Garbage Removal: $80/month

Future Repairs

Start planning for the future. Now that you own your home, 10 years down the road you’ll need a new roof/fridge/hot water boiler/ new deck. Try to put aside $1000 a year to cover future repairs. One day you will need to replace the roof/ repaint the deck/ buy a new furnace / update the windows. Plan and set the money aside in advance, future you will be happy.

The Total Cost of Buying a Home in Grande Prairie

Cost of Getting a Mortgage on a $250,000 home in Grande Prairie with 5% down (Rough Numbers)

Lawyer $1250

Default Insurance: $11,400 – added to your mortgage

Title Insurance: $160 -Part of your legal cost’s

Appraisal $200-$400 – not always required for a purchase.

Household Goods $500

To Furnish your home –  $500 & be strategic for the first two months.

Monthly Add-on’s to the budget

  • Internet $90
  • Cable TV $90 (Netflix $13)
  • Heat & Electric on a combined bill $228
  • Water & Garbage $80
  • Home Insurance $120
  • Home Maintenance $84 (Save $1000 a year to start)

 

Getting a home is a big investment, and a major change to how you’ll budget and spend your money. For myself having a place of my own to decorate and host at was always worthwhile.

If this is starting to seem like too big of expense – We live here in Grande Prairie! Our rental market is thriving, and people are always looking for a room to rent. Rent a spare room out and net $600 a month. I’m renting two rooms for $700 a month right now in my house.

 

PS: please send me an email or message me on Facebook if you’d disagree with these numbers for a $250,000 home in Grande Prairie. Or if you think I’ve missed any of the cost’s associated with owning a home!

Working hard to increase our website SEO in Grande Prairie

Jillian Napen, Office Manager at HT Mortgage Group, Part of Dominion Lending Centres in Grande Prairie Article updated Feb 20th, 2019

 

 

Alberta Mortgage Rate Update Feb 13th, 2019 (& More Downpayment)

Jillian Napen 13 Feb

Mortgage Rates for Grande Prairie & Northern Alberta

It’s Mortgage Rate Wednesday again! Here I update our best available rates, talk about our beautiful city of Grande Prairie and answer some common homeowner questions such as buying a second home.

” Do I need 20% down to buy a house if it’s my second house?”

Buying a second home? Can I need to put 20% downpayment on that second home?

Alberta Mortgage Rates for Feb 13, 2019.

Do I need 20% down to buy a house if it’s my second house?

How do you classify a second home? Here’s a couple of scenario’s.

Why are you buying a second house?  Which of these situations describes you best?

  • Buying a Second home after selling my first home?

Buying a home here in Grande Prairie after selling your first home? Then this is considered your new primary residence. We can do 5% down.

  • Buying a Second home for my children to live in while going to school in another city

All lenders will let you do 5% down on a family home. So if you want to purchase college condo or home for your kids, give us a call.

  • Buying a second home, and keeping my first home as a rental property

If you plan to live in this home, then 5% down.

  • This second home will be a rental property, I’m still living in my first home

As a rental property, you’ll have to put at least 20% down anywhere you purchase it in Canada.

 

Repeat those Alberta Mortgage Rates?

Here are this week’s best rates for February 13th, 2019:

  • 6 month at 3.30%
  • 1 year at 3.49%
  • 2 year at 3.54%
  • 3 year at 3.24%
  • 4 year at 3.64%
  • 5 year rate Special at 3.39%
  • 5 year variable rate mortgage at 2.95%    P- 1.0%
  • 7 year 3.64%
  • 10 year 3.89%

Give us a call today to get a mortgage started for your second home!

(780) 513-6611

Working hard to increase our website SEO in Grande Prairie

Jillian Napen, Office Manager at HT Mortgage Group, Part of Dominion Lending Centres in Grande Prairie

Grande Prairie, Alberta Mortgage Rates Feb 6, 2019 and downpayment

Downpayment 6 Feb

 

Grande Prairie, Alberta Mortgage Rates Feb 6, 2019

 

Grande Prairie, Alberta Mortgage Rates for Feb 6, 2019

Here are this weeks mortgage rates for Grande Prairie, Alberta.

 

Everyone always has downpayment questions. How much do I need to put down on my first house? If I put more down do I get a lower rate?  Do I need to put a different amount down if it’s not my first house? What is the downpayment if it’s a rental home? So this week we post our Grande Prairie, Alberta Mortgage Rates and talk a bit about downpayment.

How much do I need to put down on my first house?

As long as it’s for your primary residence:

As of February 2019 in Alberta, current mortgage rules are that you only have to put 5% down on your first house, or your second or even 20th home. If you are buying a home that’s meant to be your residence you can do just 5% down. Given Grande Prairie’s Residential Average Home Price (September 2018) of  $320,744 that 5% would be $16,038.

You could get a lower rate in Grande Prairie with a higher downpayment

That doesn’t mean it’s always a good idea to just put 5% down. If you put 35% down here in Grande Prairie instead of 5%, many companies will give you their best rate. Putting 5% down gets you a home in Grande Prairie, but not always the best mortgage rate.

Put more than 5% down to avoid mortgage default insurance

If you can afford to put 20% down on a home in Grande Prairie, you can avoid having to pay for mortgage default insurance. Mortgage default insurance is mandated in law by the Canadian government. As of February 2019, it is required to have default insurance on your mortgage if you put less than 20% down. Given Grande Prairie’s Average Home Price of $320,744 when putting 5% down or $16,038 you will pay $12,188 when mortgage default insurance is added to your mortgage. Go here to calculate that mortgage default insurance for any scenario. You don’t have to pay it up front, but that mortgage default insurance does add up!

Your Credit Score can affect downpayment

Mortgage lenders will consider your credit score when you go to get a mortgage as well. If you have excellent credit then 5% down is no issue, but maybe your score has dropped below 670 when you pull your credit report. What if your credit score is only 620? A lower credit score may mean that you have to put more than the standard 5% down here in Grande Prairie to make mortgage lenders comfortable issuing a mortgage.

This house won’t be my primary residence

How much downpayment do I need to purchase a rental home in Grande Prairie, Alberta? You will need to have a downpayment of a least 20% ready to purchase a rental home. Let’s take our average home price of $320,744 for Grande Prairie in September 2018 again that is $64,149 as downpayment. Given your credit score, the number of rentals you already own, or the condition of the home you are purchasing you may be required to put down much more than 20%. One good point, putting at least 20% down you avoid mortgage default insurance.

 

There are many situations that can change what amount of Downpayment is required here in Grande Prairie Alberta. For clarification, or just to have a professional run the numbers call our office here in Downtown Grande Prairie at 780-513-6611.

Or go here to fill out a form with questions.

Jillian Napen, Office Manager at HT Mortgage Group, Part of Dominion Lending Centres in Grande Prairie

 

 

 

 

Winter is here! Get a worry free mortgage!

General 16 Jan

This time of year, there are a few less mortgage’s being done- not many people want to move into a new home in the snow. But if you want to get a worry free mortgage done in Grande Prairie, this is a great time to be shopping.

Scope out those potential neighbourhoods – how many snow shovels?

  • Will my new neighbours shovel their driveways?
  • Are there any super nice people on the street willing to snow-blow my sidewalk?
  • Can I walk around safely?
  • Are they using salt, sand or kitty litter to de-ice the walk?
  • How far is this house located from a bus route or major traffic route that will get plowed first when we have a lot of snow?

My top tip? Scope out that neighbourhood right after it snows – compare early morning snow levels to slightly after work snow levels. In some neighbourhoods like Hillcrest here in Grande Prairie, you can drive around and count how many people have shovels ready near their front door.

And if you closely examine sidewalks, try looking right between two homes – this can tell you if two people shoveled at different times – or if that super nice multiple driveway shoveler exists in this neighbourhood! That’s what I call a worry free mortgage!

What? You need more than just good neighbours with shovel’s to have a worry free mortgage?

You want the best interest rate, or to confirm that you’ve got a mortgage that let’s you pay it off faster? Well a local mortgage broker will help with that.  Give us a call to get those details in place! But really guys – in 2018 Grande Prairie had 49 inches of snow in December and another 49 inches of snow in March – trust me – a worry free mortgage is all about the snow shovels.

Article by Jillian – Doesn’t own a snowblower – Napen

Office Manager , HT Mortgage Group

Or good neighbours who own a snowplow

Snow shovels are the key to a worry free mortgage in Grande Prairie

We got on June’s Top Performer List!

Gert Martens 26 Jul

Out of more than 190 Dominion Franchise’s in Canada, this month our office HT Mortgage Group here in Grande Prairie ranked #18! We are at the top!

Congrats Megan & Kait & Gert for making the top 50 Performers in June!  And congrats to the whole office we are sitting at #18 in Canada for June!  That’s AMAZING!  I know everyone has been working super hard, and it shows😉

What is the top performer’s list? That’s when Dominion Lending Canada looks at all of its mortgage brokers all across Canada, and to let us know which agents and mortgage brokerages perform the best! Being able to be on this list when we live up North here in Grande Prairie is a huge honour!

DOMINION LENDING CENTRES HAS LAUNCHED 190+ FRANCHISES WITH MORE THAN 350 OFFICE LOCATIONS SPANNING THE COUNTRY

DOMINION LENDING CENTRES CONTINUES TO ATTRACT CANADA’S BEST. GROWING MORE THAN 2,600 EXPERIENCEDMEMBERS IN JUST 11 YEARS!

Out of more than 190 franchise’s in Canada we are #18! Out of more than 2600 agents, we have two in the top 50!

Go Team Go!

Northern Alberta Tiny Home Finance

General 25 Jul

Tiny Homes  and getting them financed in Northern Alberta

Now I’m a big fan of the tiny home movement. I think that simple lifestyle, so minimalist is… very tempting. The only real problem is that there is a disturbing lack of tiny home developments up here in Northern Alberta!

Our House Magazine (which we give away free at our office in Downtown Grande Prairie) recently ran an article on a new tiny home development and charity in Calgary. “Tiny Homes for Heroes”

I’ve posted the article on another blog for today, but wouldn’t it be amazing if we could get a tiny homes community going here in Grande Prairie too!

The Challenge of Financing a tiny home

Financing a tiny home has some challenges. Here in Canada, most Tier A lenders (The big banks) want a single family home to be a minimum of a 1000 square feet, before lending. Lenders assume a smaller home is a cheaper, older home, with few upgrades.

So how are people getting tiny homes built if financing is so difficult?

Option 1 – Start a charity

Well, this is what our friends in Calgary did. Tiny homes, the 200-300 square feet version’s are fairly cheap to build. Fundraising enough money to build several little homes in a community format work’s well, and a normally sized plot for one home can support several tiny homes. This option is hard for most of us dreaming minimalist though. I want to live in a tiny house…. not just help build them!

Option 2 – Buy Raw Land and Start your own tiny home community

Most city’s have these pesky things called bylaws. They tell us the minimum size our house should be, what the proper ceiling height is, and how large windows need to be for fire code. For our safety, or so that all of the homes look nice and uniform… these bylaws make it difficult to find a place to build your tiny house!

Some developers and tiny home enthusiast’s have gotten around this by declaring their plot of land mobile home parks. If a tiny home is built on a trailer, different bylaws apply that are more favourable to a small home. Why build just one tiny home, when you can build a community?

Option 3 -The Easiest Financing Method

Grande Prairie’s rental market has less than 1% Vacancies right now. (July 2018)  A carriage house is a garage with living quarters, and that is something we can finance or refinance into your existing mortgage. So maybe you just design a garage that can be easily converted into a tiny home!

The downside is your sharing your lot, but you get to live in a tiny home, and have rental income! Later on, if you find the tiny home lifestyle isn’t as grand as you thought, you can always move back into the main house. Or move your kids into the tiny home.

Option 4 – Lobby our city hall representatives to make zoning exceptions for tiny homes

One day maybe! Now Calgary and Vancouver each have several bylaws designed to allow tiny homes in various communities throughout these two cities!

In the meantime, give our office a call to discuss options that may work for you!

Jillian Napen

Tiny Home Enthusiast, and Office Manager at Dominion Lending Centres
Ht Mortgage Group, 101 10001 100 ave Grande Prairie
July 25, 2018

 

Pam offers free homebuyer education

First Time Homebuyer 28 May

Pam Lobban offers free homebuyer education

I love working with first time homebuyers because I enjoy taking the time to educate clients on the process. I’ve been licensed to do mortgages since May 1999, so I’ve built up a lot of knowledge to help homebuyers.  Sometimes working in this industry it’s easy to forget that most people don’t know the basics when it comes to mortgage financing; that’s where I come in. I do a free class on Grande Prairie Mortgage Basic’s.

Book a time to learn

If you think you might want to buy your first home in the future call me so we can set up a mutual time to get you pre-approved!  You’ll have a completely free lesson in steps you can take now to be prepared to buy the home of your dreams in the future.

There is really not a reason to wait, it’s a no pressure, free and educational process.  I would love to meet you!

Megan Lemay – Grande Prairie Mortgage Broker

Megan Lemay 23 May

This week Megan Lemay is our Grande Prairie Mortgage Broker of the week. For over 11 years Megan has been a core part of our team at Dominion Lending of Grande Prairie.

“I have the greatest job in the world…I’m a mortgage broker. My job is to figure out a borrower’s wants and needs so I understand their unique life situation. Then I shop the 40ish lenders we have, to access you the mortgage that fit’s you best. I’m 100% commission so the best part is that I don’t charge a fee for my work. I love helping people purchase a home, even when they don’t think they’ll be able to. So many people feel overwhelmed by a credit mistake or life situation that impacted their financial stability. There’s nothing more rewarding than helping borrowers understand credit, fix what’s negatively impacting that credit, and helping them buy a home of their own.”

Megan and her husband Chris live out in DeBolt, with their 1-year-old son, Cullen. Megan and Chris are self-employed so their days are busy! In Megan’s spare time, she loves the outdoors and spending time with her tight-knit family.

Give her a call today and to shop local and national lenders for the best rate and mortgage for your home.

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