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Mortgage rules are changing. For properties between $500,000 and $1 million, folks getting an insured mortgage will now need to put more down—up to an additional 2.5% of the purchase price. In other words, 5% down will be required on the first $500,000, and 10% down will be required on the next $500,000. For a $750,000 property, that means you’d have to cough up a 33% bigger down payment (compared to today), or another $12,500. The new rule doesn’t affect properties over $1 million because they don’t qualify for high-ratio mortgage insurance anyway. Call me at 647-407-5407 to discuss how I can assist you.

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Before you decide to go house shopping, you will need to determine what you can afford. When shopping for a home, begin by determining: What you need (number of bedrooms, small yard or big, garage or street parking, etc.); what style(s) you like (house or condo, semi-detached or detached, etc.); where you would like to live (inner city, suburbs, close to schools, close to work, close to family, etc.) and, most importantly, what you can afford. This determines your wish list for a new home. But you need to understand that each component on your wish list has a cost associated with it. For example, larger homes generally cost more than smaller ones, depending on location. You need to weigh the importance of each component on your wish list against its relative cost, with cost being the critical factor. Because unlike shopping for most other items, paying more for a home than you can afford could have serious financial consequences over a long period of time. So knowing how much you can afford and staying within your budget when shopping for a new home is very important. There are several factors to consider when calculating how much you can afford. These include: Your down payment; Your household income; Your other monthly debt expenses; Your estimated housing-related costs; and your closing costs. This is when I come in and hold your hand thru out the process and ensure that you are well informed and are ready to make the right choice for you and your family. Call me and let's explore your options. 647-407-5407

DID YOU KNOW?? That Home Mortgage Interest is a tax-deductible expense. Mortgage interest is reported on Form 1040, Schedule A along with other itemized deductions such as real estate property taxes, medical expenses, and charitable contributions. Taxpayers paying mortgage interest should fill out Schedule A to see if their itemized deductions exceed their standard deduction. If so, taxpayers will save more money on their taxes by itemizing. Taxpayers who itemize their deductions will need to file the Form 1040 long form.

Mortgage Planning Tips When financing a home, the following considerations can help you save money and provide for greater economic stability in the event of financial challenges down the road such as lower income levels, increased monthly expenses and/or higher interest rates. Consider a lesser mortgage amount than the maximum you can afford Mortgage Professionals use two simple calculations to determine the maximum mortgage that you can afford. The first calculation, your Gross Debt Service Ratio, assumes that your monthly housing costs (mortgage principal and interest, taxes and heating expenses and half of the monthly condo fee if you are purchasing a condominium) should not be more than 32% of your gross monthly income. The second calculation requires that your entire monthly debt load (including housing costs and other debts such as car loans and credit card payments) not exceed more than 40% of your gross monthly income. This figure is your Total Debt Service ratio. While these ratios help to determine the maximum mortgage and payment that you can afford, obtaining home financing at these levels may not leave you with much room to comfortably deal with any unexpected changes in your monthly budget. Taking a smaller mortgage can help to ensure that your monthly housing costs remain within your means. Evaluate the impact of an increasing interest rate on your monthly payments Over the past few years, interest rates have been at historical lows. While this helps to make homeownership affordable today, an increase in interest rates could have a significant impact on your future monthly housing costs. For instance, homeowners renewing a mortgage of $250,000 with a 5% interest rate could see an increase in payments of $300 per month if rates were to increase by 2%. Evaluating the impact of increasing interest rates on your monthly payment today may help you to avoid financial difficulties in the future. Plan to be mortgage free faster and create a "cushion" in case of unforeseen financial difficulties There are a several ways to pay your mortgage down sooner, save money, and create some breathing room should you face unforeseen financial difficulties in the future. These include making accelerated weekly or biweekly payments, taking advantage of pre-payment privileges such as making lump sum payments to your mortgage principal, and increasing your regular payment amount. For example, for a $250,000 mortgage (5% interest rate and 25 year amortization) choosing an accelerated bi-weekly payment over a bi-weekly regular payment ($727 vs. $670) allows you to pay down your mortgage more quickly. You could pay off the mortgage in just over 21 years and reduce your interest costs by almost $30,000. Ask your Mortgage Professional for additional information on these topics when arranging your financing. Seek help if you have difficulty making your mortgage payments When unforeseen financial circumstances impact your ability to make regular mortgage payments, it’s important for you to take quick action. With early intervention, you can work together with your mortgage professional to find a solution to your financial difficulties. Your mortgage professional wants to establish and maintain a positive relationship with you over the long term, and is fully trained and equipped with the tools to help you deal with the temporary financial setbacks that you may be facing.

Save time and money by using my services to obtaining a mortgage that best suits your family financial situation. You need someone who can deliver full mortgage services, notably someone committed to finding the best available mortgagee at the best possible rate. No cost to you, the lender assumes the cost. Allow me to guide and educate you about your mortgage options and rates as well as help you plan effectively. Let's connect and chat. Send me a message.

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Mortgage Rates News: While many economists were forecasting a cut in interest rates, the Bank of Canada announced it will maintain its target for the overnight rate of ½%. They acknowledged that commodities and oil prices continue to take a hit and negatively impact the economy. My mortgage broker and I responsibilities are to understand what is happening in the economy and see how it could benefit you. With interest rates low and the Canadian economy going through a transitional phase, now could be a great opportunity to have a look at your mortgage or home buying options. It’s also an ideal time for homeowners with equity to get rid of any of those high interest credit card payments that have built up over the last several months. Call me at 647-407-5407 or email me dafna@mortgagemedics.ca And Together we can have a look at your mortgage and other debt and determine if there are options that you can take advantage of today that will save you thousands and even pay your mortgage and other debts years sooner.

The importance of your credit score when considering buying a home. What is a credit report? A credit report is a quick look into your credit history. If you have taken a loan or used a credit card you will have a credit history. Financial institutions, trust companies, credit companies and grantors that give you credit may send information about whether or not you make your payments on time to a credit-reporting agency/bureau. Credit bureaus collect information about you and how long it takes you to pay back money you have borrowed. This is is called your credit history. Credit lenders rely on a credit bureau to analyze an applicant’s current and past credit history in order to determine the likelihood of future repayment. This provides a fairly accurate indication of future repayment trends. The two most popular credit bureau agencies operating in Canada are Equifax and Transunion. You can request your credit report by mail for free but your score is not included. If you request your credit report online a fee is charged and your credit score is included.

Do you understand the ongoing cost of home ownership? Buying a new home takes some pre-planning in order to do it properly. Taking the time to work out your household budget before you buy your new home means you’re less likely to face unexpected surprises afterwards. And that means you’ll get more enjoyment out of your new home, rather than worrying about how to pay for it. Let me help you prepare and enjoy the largest purchase of your life with peace of mind and knowledge on how to properly manage your finances.

Tips on how to maximize your down payment: 1. Save for your down payment - Consider setting up an automatic savings plan through pre-authorized contributions from your checking account to a high-interest savings account to conveniently set aside money for your down payment. You’ll be surprised how even small contributions add up over time. 2. Use your RRSPs - Did you know that first time home buyers are allowed to withdraw up to $25,000 each ($50,000/couple) tax-free from your Registered Retirement Savings Plan (RRSP) to use as a down payment towards a qualifying home (NOTE – the withdrawn amount must be repaid in full to your RRSP within 15 years in order to avoid paying taxes on it). 3. Consider selling other investments - If you have any investment products such as bonds, mutual funds or shares outside of your RRSP, you may want to sell them to supplement your down payment. (NOTE – the sale of such investment products could have tax implications. Speak to a tax professional before proceeding.) 4. Use Monetary Gifts. - If your family is planning to help you purchase your new home, use their financial contribution as part of your down payment 5. Consider selling assets. If you have any valuable assets such as art, antiques, jewelry, etc., you may want to consider selling some or all of them to help augment your down payment.

The down payment is an important part of the home buying process, especially when it comes to first time buyers. It affects everything from how much home you can afford to the size of your mortgage payments. The larger the down payment you have the smaller your mortgage will be. Keep in mind that If your down payment is less than 20% of the appraised value of your home, you will need to get a high-ratio mortgage which requires you to purchase default insurance.

Dafna Ziv Mortgage Professional

Dafna Ziv Mortgage Professional