Declined Mortgage

Banks are known to be tough for mortgage approvals, so what happens when your you get your mortgage declined? People often think when their bank says no it’s a no. How can you blame them, the bank has known you since you were ten and you opened your dino account. They have known your dad and your grandpa. So if they decline your mortgage application is must mean you cannot be approved. However, the days of relationship banking are gone, and mortgages are no exception. Not all declines are the same in the mortgage world. So when your bank declines your mortgage application what they are really saying is the file doesn’t fit their criteria.

In Canada, the government and insurers dictate the guidelines that a bank has to approve a mortgage within but they don’t dictate the ways they need to approve those stipulations. For example, one lender may take a recent pay stub and a letter from your boss as income confirmation, while another may look at your bank statements for the last three months.

A mortgage declined is not a final answer, it is a final answer at that specific bank at that specific time. So just because one place said no thats not a final answer and thats why a Broker is your best option.

What are your options when declined:

1. Cosigner
2. Another A lender
3. An alternative lender (B lender)
4. A private lender

Feel free to message me today about your options when you have been declined.

A “B” side mortgage or a B lender mortgage is any mortgage that is funded through nontraditional banks or lending sources and are commonly used by people who have been turned down by A lenders. An A lender mortgage is any mortgage funded through traditional lending sources. B lenders provide a lot of flexibility in the types of income that is used and the affordability. They might be the right choice for you if you are looking for reasonably priced rates.

A mortgage broker, like myself, can help to determine which lender will guarantee the best options for you. Using a mortgage broker is best because most lenders will not deal with you directly. In fact, some may require you to work with a broker to take out a mortgage with them at all. By looking at your income and credit scores a mortgage broker can appoint you to either lender. Trust your broker to do what is right for you. If you have poor credit, a B lender that offers mortgages at higher interest rates is within your best interest. This is because B lender mortgages are very accommodating. They can provide you with interest-only mortgages that reduce monthly payments and allow you to obtain a mortgage when you otherwise would not qualify for one.

Once you have talked to your broker and decided that a B lender is the best choice, getting a mortgage might take a little longer than normal. The process can be lengthy depending on your situation. Therefore, you should start the approval process as soon as possible. If you are unsure about how or where to start, talk to your broker and they will guide you through the process step by step, keeping your best interests in mind. How fast you get a mortgage through a B lender depends on your mortgage broker, your situation, and the size of the mortgage you are taking out.

If you are ready to start the mortgage process with a broker that will guide you every step of the way, that will ensure the best lenders, deals, and options that fit your situation, then I can help. To start the approval process visit https://scott-trainor.com/mortgages/how-to-apply/ or contact me at

scott@scott-trainor.com

Metis-Nation of Saskatchewan First Time Home Buyers Program

The Metis Nation of Saskatchewan has created a First Time Home Buyer Program for Metis citizens in Saskatchewan. It is a one-time secondary grant to provide help with the down payment and closing costs connected with buying their first home. In staying with our theme of down payment options we present the ins and outs of the MN-S FTHB Grant.

MN-S are offering $15,000 towards down payment of a home and $2500 towards the closing costs. This is to assist Metis people get into home ownership, something we strongly believe everyone should have the opportunity to do. In Canada, you need 5% of the purchase price as down payment as a minimum, as we noted here, not all of those funds have to come from savings. If Metis citizens are purchasing a home for $400,000 for example, $20,000.00 would be needed towards the down payment. Using the MN-S FTHB grant of $15,000.00 that citizen would only need to come up with $5,000.00 of their own resources.

Few stipulations:

1. Must be 18 years of age or older
2. ID and Copy of MN-S Registered Metis Citizenship Card/Confirmation from MN-S Registry of Metis citizenship approval
3. Must approve for the mortgage (where we come into play)
4. Must not have owned a home within the last four years
5. No income taxes owing
6. Must be your primary residence for the next 5 years
7. Household income must be less than $150k annually

If you live in the property for five years the grant is forgiven! It is a great program and an amazing opportunity for Metis Nation of Saskatchewan citizens to get into home ownership.

Any questions on the Metis Nation of Saskatchewan First Time Home Buyer Grant or on home ownership please contact us today!

A down payment is one of the most essential aspects of every mortgage application and new home purchase. In Canada, home purchases require a minimum cash payment from your own funds that is put towards the purchase. This is your down payment and is considered your stake in the deal.

Many home buyers understand that a certain amount of money down will be required on a home. However, most don’t realize the ins-and-outs of down payments, such as where the funds are allowed to come from and ensuring a proper paper trail.

Here are a few things to keep in mind while preparing your down payment and working towards your perfect home! Check out our blog on zero down mortgages here!

SOURCES OF DOWN PAYMENT

Most home buyers are aware that they will require a certain amount of money for a down payment. What many do not realize, is that lenders are required to verify the source of the funds. This allows them to ensure that they are coming from an acceptable source. Sources that further contribute to indebtedness are less-likely to be considered (such as line of credit or credit card). Instead, the best and most traditional options for your down payment are:

SAVINGS ACCOUNT

The first and most traditional method is your savings account, where you have been pinching your hard-earned pennies to save up for this day!

If you are utilizing your personal savings for a down payment, note that lenders will require three months of full bank statements. This includes name, account number, transactions and balance history. For any large deposits made in that time (sale of a car, work bonus, etc.), explanations and supporting documents will be required.

GIFT FROM FAMILY MEMBER

If you are fortunate enough to receive help from the Bank of Mom and Dad for your down payment, there are certain requirements:

• A signed gift letter from the immediate family member contributing the fund
• Proof of the transfer into your bank account. This can be a bank statement documenting the money being moved from the donor’s account and into yours. The statements must include names, account numbers and the full transaction history during the time period in question.
• Important note: If money is being received from immediate family overseas, most lenders will require copies of the wire transfer. In addition, they may ask for account history.

RRSP WITHDRAWAL

Another option for down payment is the use of Registered Retirement Savings Plan (RRSP), but only if you are a first-time buyer. This is part of the Home Buyers’ Plan (HBP), which allows first-time buyers to borrow up to $35,000 from their RRSP’s (tax-free!) -as long as the money is repaid within 15 years. Please note: The minimum repayment is 15 equal instalments paid once per year.

HOW MUCH DOWN?

When it comes to putting money down on your new home, you need to consider the minimum down payment required as well as additional fees.

The minimum amount required in Canada is 5% for the first $500,000, with 10% down on any amount beyond that threshold. For example, on a $600,000 house you would need to put $35,000 down at minimum ($25,000 on the first $500,000 and $10,000 for the additional $100,000 purchase price).

Keep in mind, if your down payment is less than 20% of the price of your home, you will be required to purchase mortgage loan insurance in case of default. These premiums range from 0.6% to 4.50% of the total amount of your mortgage. Using the example above, this would mean $3,600 to $27,000 in mortgage insurance premiums.

If you are able to put 20% down on your new home (which is the recommended amount), you would be looking at an investment of $120,000 down with no mortgage insurance premiums required.

ADDITIONAL COSTS AND FEES

One component of the purchase process that homeowners often forget about, are the closing costs. These are typically 1.5% up to 4% of the purchase price. In order to get financing, you are required to show that you have enough to cover these costs, which include legal fees.

When you have collected the funds for your down payment and closing costs, you must ensure those funds remain in your bank account once you’ve provided confirmation. They should only leave your account when they are provided to your lawyer to complete the purchase. This is because lenders will often request updated statements closer to the closing of the sale, to ensure nothing has changed. If money has been moved around, or if there are new large deposits or withdrawals, they will all need to be confirmed and could affect approval.

The last thing that anyone wants when purchasing a property is added stress or for something to go wrong late in the process. Consider contacting a DLC Mortgage Professional today to help guide you through the process! Make sure you are upfront about your down payment amount, and where it is coming from. This will help a mortgage broker determine whether or not it is suitable, and allow them to find the best lender and mortgage product for you!

*Featured in DLC OUR HOUSE Blog

Those who have gone through a bankruptcy or consumer proposal in Saskatoon sometimes only find out later that mortgages become tougher to gain. Luckily for those clients there are a few options when applying for a mortgage. Situations are different and should be looked at individually. In this article we will describe a few options that people in this situation can use to gain a mortgage.

According to the Office of the Superintendent of Bankruptcy, about 100,000 Canadians either apply for bankruptcy or a consumer proposal every year. There are a variety of reasons why this may happen, business closure, divorce, etc. While this is sometimes the only option for clients, it does make getting a mortgage a little bit tougher down the road.

In the mortgage world, consumer proposals and bankruptcy’s are much the same. There are two ways we can approach these situations, A side or B side.

Applying for an A side mortgage after bankruptcy

To get an A side mortgage you typically need the following:

• 2 years discharged
• 2 years re-established credit (two trades, minimum $2,000.00 limit)
• No mortgage included in the previous bankruptcy

Applying for a B side mortgage after bankruptcy

For B side mortgages, when a client has been discharged there are options to refinance, or purchase a new home. Most lenders need the consumer proposal/bankruptcy to be discharged at least one day. In some cases, lenders will allow clients to pay off consumer proposals via refinance even! Most clients dig themselves into some debt trying to be discharged, consolidating this debt into a new B side mortgage is the final step to financial recovery for them.

A B side mortgage is typically utilized in post bankruptcy files. Post funding, clients are taught to start how to rebuild credit, that way they can go to the A side in two to three years on average.

Every bankruptcy file is different, email me today to come up with a game plan for your certain situation.

Million dollar homes are becoming more and more common in the Saskatoon market, this article is to help you understand the difference of buying a six and a seven figure home. Areas such as Greenbryre, The Willows, Sask Cres., Spadina Cres. are home to high end homes that will check all of the boxes you are looking for. Even COVID-19 hasn’t slowed the high end home market in Saskatoon with many areas seeing strong growth.

Can you afford a million-dollar home?

Here’s the short answer: To buy a million-dollar home in Saskatoon, you’ll need an annual household income of at least $170k, as well as a cash down payment of at least $200,000. That’s the minimum you’ll need in order to qualify for a large enough mortgage.

Getting a million-dollar mortgage

Most Canadians buying a $1,000,000.00 home don’t have a million in cash just lying around. Most of them would need to save a down payment and take on a mortgage to help purchase a million dollar home.

So, can you afford to get a mortgage for a $1 million home? There are two key factors that affect your mortgage affordability – your down payment, and your gross debt service ratios.

Your down payment

Not having a big enough down payment is what eliminates most buyers from buying a million home. Saving for a down payment is hard enough, but Canadian policy is that homes with a purchase price of over $1 million require a down payment of 20% or more.

Since an insured mortgage is out of the question for a $1,000,000 home, you’ll need a minimum 20% down payment ($200,000), resulting in a typical mortgage on a million-dollar home of $800,000.

If you’re one of the few Saskatonian’s with a large enough down payment – congratulations! Now let’s look at whether you can afford the mortgage payments on a million-dollar home.

Debt service ratios

Your debt services ratios determine whether you can afford the payments on a million-dollar mortgage.

Gross debt service ratio:
Your GDS ratio controls whether you can afford the monthly carrying costs associated with your house. Your lender will add your annual mortgage payments to the costs of owning your home, then divide this by your annual household income. To qualify for the loan, the resulting ratio must be less than 39%.

Total debt service ratio:
Now let’s look at the next debt service ratio: your TDS. This ratio takes the factors above into account, but also adds in any debt requirements you may have. This ratio must stay below 44%.

To satisfy both debt service ratios, you’ll need an annual income of at least $170,000 to afford a home worth over $1 million.

The Bottom Line

Buying a $1 million home isn’t an easy feat. You’ll need a large down payment, and your debt levels should be under control. You’ll need a high income and the ability to handle renewing your mortgage at higher interest rates. The good news is that if you meet those requirements, you can afford a $1 million home’s monthly payment – or maybe even a $1.5 million house dollar monthly payment. If you’d like to see what you can approve for click here!

How is your credit score calculated? It is a complex answer and, as such, common myths persist. Today, we are going to help you get a better understanding of your credit score and how to make the grade by busting the most common credit score myths!

MYTH #1: TOO MANY CREDIT CARDS WILL HURT MY CREDIT SCORE

The reality is that cancelling healthy, active cards or accounts hurts more than having too many. When you cancel a card, all your payment history is lost as well as the type of credit granted. While you may think having a couple credit cards is extreme, the average Canadian has TEN credit sources. What many Canadians don’t realize is that lenders want to see a history of credit; they want to see payments made on time. In addition, lenders also want to see balances maintained at no more than 70% of your credit limit in use. So, if you have a $10,000 credit card, you don’t want to owe more than $7,000 on it at a time.

MYTH #2: AVOID USING CREDIT CARDS IF YOU WANT TO BUILD CREDIT

It is easy to think that different forms of credit matter more than others, but that is simply not the case. In fact, all lenders want to see is a history of credit and payments made on time. This is what will build your credit score and, eventually, give you the ability to qualify for financing. A history of on-time payments and manageable balances shows the lender that you are a promising investment and not likely to default.

MYTH #3: PAYING MONTHLY UTILITIES BUILDS CREDIT

Unfortunately, paying utilities does not build credit. In fact, these providers only check your credit score to determine creditworthiness; they don’t report your payment history to the bureau. Unless you are late to pay, that is. The other organizations that only report on default are municipalities and vehicle insurance providers, so make sure you keep these payments up-to-date. Be sure to pay any traffic tickets and bylaw infractions too!

MYTH #4: I CAN’T DO ANYTHING ONCE A PAYMENT IS LATE

Don’t be discouraged. Lenders understand that you are only human and, in many cases, they are often willing to work with you if there is a late payment. If they are notified within a timely manner, a late payment can be easily reversed. Just be careful not to make a habit of it.

MYTH #5: CHECKING MY CREDIT SCORE WILL DECREASE IT

No exactly. There are two types of credit inquiries: soft and hard. A soft inquiry occurs when you pull your own credit report. Credit card companies also pull this type of inquiry when marketing pre-approval offers. Soft inquiries do not affect your credit score.

A hard inquiry, on the other hand, is triggered by the applicant when submitting a loan or credit card applications. As a result, hard inquiries will affect your credit score slightly as they are included in the calculation done. Recording the number of inquiries a consumer has on the credit report allows potential lenders to see how often a consumer has applied for new credit; this can be a precursor to someone facing credit difficulty. Too many inquiries could mean that a consumer is deeply in debt and is looking for loans or new credit cards to bail themselves out. Another reason for recording inquiries is for preventing identity theft. Hard inquiries that aren’t made by you could possibly be from a fraudster trying to open accounts in your name; therefore only individuals with a specific business purpose can check your score. Creditors, lenders, employers and landlords are some examples of approved business people. The inquiry only appears on the credit report that was checked.

In addition, hard inquiries remain on all credit reports for two years, after which they are removed. Soft inquiries only appear on the report that you request from the credit bureaus and will not be visible to potential creditors.

Credit score plays a vital role when it comes to potential financing for car loans, mortgages, or even personal loans. It is important to recognize good credit habits now and maintain them for a higher credit score today, and better chance of financial approval in the future.

AIRPORT DRIVE JOINS DOMINION LENDING CENTRES

It is with much excitement that I can announce the grand opening of our new brokerage named DLC Fresh Mortgage Co.! Although our name has changed, we’re still located at the same great address with the same telephone number!

I’m stoked to let you know that Saskatchewan’s #1 mortgage office by volume (CMP Magazine 2017-2019) is only getting better. We still have the same terrific team of Mortgage Professionals offering excellent service to ensure you receive the best rates and products catered to your unique needs.

Since we’re now part of the number one Mortgage Broker company in Canada, we have expanded access to additional lenders. More lenders mean more options and added savings for our valued clients. This should improve out ability to get as many deals approved as possible. Number one in Saskatchewan joins number one in Canada, only makes sense.

Dominion Lending Centres is focused on providing great systems so we can easily communicate market conditions, interest rates and vital homeowner information to you moving forward. While making it easier and safer to do mortgages during these unprecedented times.

We still have one simple goal in mind – to provide every one of our past and future clients with unbelievable service, options and the very best mortgage options to meet your unique needs.

If you are looking for a new mortgage click the apply now! We will set up the first contact and start working to get you approved.

Check out our new IG here.

Scott Trainor