5 First Time Home Buyer Tips – Michal and Michael Podcast

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Here we’ll talk about why you need to get a mortgage pre-approval, best mortgage interest rates, how to avoid mortgage penalties, info on down payment and co-signers and much more!

Michal Sluka – Premier Canadian Properties, real estate agent for over 5 years, sold over 300 homes

Michael Huber – Huber Mortgage, 7 years experience

First Time Home Buyer Information Podcast SUMMARY – watch the YouTube podcast for full details

Why get a Mortgage pre-approval?

– 50% of Canadians use mortgage brokers, surveys show Canadians need this professional advice to guide their decision and help them get the best mortgage contract; rates and terms.

– Professional, full time experts

– Pre-approval avoids stress, ensures guaranteed rates, verifies income, credit and down payment documentation

– Improves your negotiation ability, strengthens offers

– Better chance of succeeding in multiple offer situation

– See all available houses, no viewing restrictions

– Lowers financing time frame once offer is accepted

– Improves ability to secure best rate

Bank vs. Mortgage Broker

– Difference is diversity, rates are about the same but the terms and conditions are much different between mortgage companies, credit unions and banks.

– Mortgage penalties are worst with big banks; 65% of Canadians with 5-year mortgage pay a penalty costing them thousands

– Brokers can place you with a lender that protects you against high penalties

– Penalties with banks can be up to $30,000 – see Canadian mortgage pre-payment penalty lawsuits; monopoly organizations charge higher penalties

Mortgage Pre-Payment Penalties

– Variable rate always pays 3-month interest penalty

– Fixed rate can be a 3-month interest penalty or IRD penalty (different lenders calculate their IRD penalties in different ways; mortgage brokers can place you with a lender who has a standard IRD penalty, lowering your penalty and protecting you from predatory penalty practices)

Mortgage Options

– Brokers can present your application to a wide variety of lenders, focusing your application on the lender that best suits your specific needs.

– Mortgage companies calculate pre-payment penalties using standard IRD which is advantageous to the borrower. Provides mortgage companies with competitive advantage over the banks.

Mortgage Payoff – How to pay off mortgage at least 7 years faster

– 20% mortgage payment increase – direct against principal, pay off loan 5 years sooner

– Accelerated payment option – 26 payments per year vs. 24, pay off loan 3 years sooner

– 20% annual Lump sum option

Rental suite considerations

– Standard practice, can include income if suite has own kitchen, bathroom

– Rental income can be used in mortgage qualification income calculations, increase the amount you can borrow

– Must understand landlord and tenant rights to protect yourself

– Decreases monthly housing costs

– Rental income can be used to help cover the mortgage payment, build a housing maintenance fund, increase mortgage payment by 20%, invest the difference.

Down payment and Co-signer

– Minimum 5% down (own source funds or gift from close family)

– Co-signer on hook for mortgage as much as principal applicant

– TFSA, savings, RRSP up to $35,000 per applicant, sales of equipment

– Gift Letter and deposit from family

*****ONCE APPROVED*****

Do NOT finance any new purchases UNTIL you take possession of your new home!!  CALL HUBER MORTGAGE FOR DETAILS 250-212-7954, michael@hubermortgage.com

Learn more frosted tips and dark web strategies in my Ebook, click HERE

Sincerely,

Michael

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