Trusted Tips and Resources

Trusted Tips & Resources

Trusted Regina Mortgage Expert Answers Questions About Rising Lending Rates

Trusted Regina's Skott Enns and Ryan Boughen of TMG The Mortgage Group can be found in the Mortgage category.  


We sat down and asked Skott Enns of TMG The Mortgage Group some questions we thought you'd like the answers to!


"As many of you have now heard, the Bank of Canada       increased it's lending rate to 0.75%. That is an increase of 0.25%, from their previous rate of 0.50%."


QUESTION #1: Who will be affected by this?


 "When the BoC increases their rate, this will typically translate into an  increase in the Prime lending rate, which is how banks calculate their  variable mortgage rate. Hence, if you have a variable rate mortgage (or  there is a line of credit component attached to your mortgage), you can  expect your mortgage rate (and likely your payment) to increase by 0.25%  in the very near future."



QUESTION #2: What does this actually mean?


"Of course no one likes to hear that their interest rate is increasing, but before panicking, it is important to look at what this actually means in dollars and cents. With this 0.25% increase, your mortgage payment will increase by $13/month for every $100,000 you owe."


"So if you have a $300,000 mortgage, this will increase your mortgage payment by $39-ish per month. Clearly you would rather keep that money in your own pocket, but this is not a scenario where the sky is falling."


Image result for arrow going up with house


QUESTION #3: What to do?


a) "We can lock in your mortgage rate by converting it to a fixed term. When you originally received your mortgage financing you (in most cases) were committing to that particular lender for a 5 year period. If you are now 2 years into that variable rate, and wanted to lock in to a fixed term, you would be locking into a term of at least 3 years. Make sense? Keep in mind, however that in many cases, the fixed rate that you would be locking into is still going to be higher than your new increased variable rate."


b) "We can do nothing, and stay the course with a variable rate. Although one can never guarantee what will happen with mortgage rates, history shows that those borrowers with variable rates who stay the course as opposed to locking in mid term still save more money."


SKOTT'S TWO CENTS:


"As a blanket statement, I am encouraging the clients who are calling me to stick with their variable rates. As mentioned, in most cases your new variable rate will still be lower than the fixed rate you would be locking into. If you consider this, in addition to the ultra low penalty that comes with breaking a variable rate mortgage (should it ever happen), I still believe a variable term is the right way to go."


"That being said, every situation is unique. If you have any questions at all about your mortgage please do not hesitate to contact me at 306.201.6500."


I am happy to answer any questions/concerns you may have.


If you are looking for honest, unbiased advice from a mortgage broker in Regina they would love to talk with you!

Skott Phone 306-201-6500  Ryan Phone 306-570-3379 

No Time to set up an appointment! No Problem! You can also click here to apply now  with Ryan or apply now with Skott and get the ball rolling.

TMG The Mortgage Group Skott Enns & Ryan Boughen are Trusted Regina Mortgage Brokers


 

Trusted Regina Mortgage Broker Kent Bittner shares a tip on planning for additional costs with your mortgage

The purchase of a home is the largest purchase most people make during their lifetime. Kent Bittner at DLC-Bittner Mortgages, wants to make each and every purchaser aware of the many mortgage options available to them prior to their purchase and closing date. 

Whether you are a first-time buyer or an experienced buyer with excellent credit, DLC - Bittner Mortgages has access to the very best products and mortgage rates available across Canada.
 

Kent Bittner of DLC-Bittner Mortgages is a Trusted Regina Mortgage Broker 

Will you need to pay any additional costs?  The purchase price of your home is only one of the costs you'll encounter. 


You'll pay some costs at the beginning of the home-buying process and others, known as closing costs or disbursements, when your home purchase is finalized


Here are other possible costs you need to consider:


Property/Land Costs

(Provincial property/land transfer and registration taxes)
It is based on a percentage of the purchase price (0.3% to 2%) and varies from province to province.
Most provinces levy a tax on a home purchase that must be paid at the time of registration.

Legal/Notary Fees

Check with your lawyer or notary for current rates.
Professional representation protects your interests in the purchase of a property. Fees and disbursements may vary based on a transaction's complexity.

Mortgage Insurance

Premium fee depends on the amount you are borrowing and the percentage of your down payment. It typically ranges from 1% to 3.25% of the principal amount of the mortgage.
Any home purchase where the down payment is between 5% and 19% is considered a high-ratio mortgage and must be insured to protect the lender in case of default by the borrower.

Property Insurance

Varies based on value of the property, location and contents of the home.
Mortgage lenders require you to have property insurance in place when you take possession of your new home. Make sure you enlist an insurance agent early.

Home Inspection

$200 to $500
A home's clean bill of health from a qualified home inspector can provide a great deal of comfort when buying a resale home.

Moving Costs

Variable, per hour
Costs depend on what you can do yourself and the distance involved. Prices may be higher at the end of the month or in the summer.

Don't forget to consider general expenses such as: upgrades, and home decorating costs as well.

Trying to get a mortgage? Do you understand your credit? Our Trusted Regina Mortgage Broker has some helpful information

Skott Enns – Skott’s goal isn’t to simply help you get a mortgage with the best mortgage rates, it is to help you figure out a plan to pay off your mortgage as quickly as possible!  Has been voted Regina’s best mortgage broker for 2013, 2014, and 2015 & 2016 by Prairie Dog Magazine and named to the Summit 20 group, which means that he is in the Top 20% of all TMG Mortgage Brokers in Canada for the last two years.

If you are looking for honest, unbiased advice from a mortgage broker in Regina they would love to talk with you!

TMG The Mortgage Group Skott Enns is a Trusted Regina Mortgage Broker

Understanding Credit

Credit Explained by Trusted Regina Mortgage Broker Skott Enns

 















How you manage your credit plays a big part in how a lender looks at your mortgage application. By understanding the makeup of a credit score and working towards establishing a solid credit profile, you can increase your chances of getting approved for a mortgage. This article is part three in a short series that aims to help you understand mortgage qualification. 

There are four key areas that come under scrutiny when a lender looks at a mortgage application; income, credit, downpayment, and the property. You can find the previous articles in the series here:

Part 1. Understanding the Mind of a Lender
Part 2. Understanding Income

The following is an in depth look at how your credit is viewed by a lender when assessing your mortgage application. 

Credit Agencies

In Canada there are two credit reporting agencies, Equifax and Transunion. Typically Transunion is used by consumers as a monitoring service to protect against identity theft, while Equifax is relied on about 90% of the time by lenders looking to determine if you are credit worthy. Every time you borrow money, a history of that loan is sent by the lending institution to both Equifax and Transunion, this makes up what is called your credit report. The information on your credit report is then boiled down into a single three digit number called your credit score (sometimes called a beacon score).

It’s not uncommon for your credit score to be different between Equifax and Transunion as not all lenders report all information to both agencies at the same time. Although your Equifax credit report will be used for mortgage qualification, lenders may also want to have a look at a your Transunion report as well, especially if your Equifax report has some issues with collections or late payments.  

Understanding Credit – Credit Score

Credit Score

Your credit score is a three digit number between 300 and 900. The higher the score the better. Depending on where you look online, you will find several variations of the ranges that indicate credit worthiness. Although somewhat general, the following is pretty accurate when talking about mortgage financing:

  • If you find yourself between 300-600, you have bad credit and won’t have access to the best products and rates available. 
  • If your credit score is between 600-680, there is a good chance you have had some issues in the past, you can qualify for mortgage insurance, but it’s gonna be touch and go.
  • If your credit score is between 680-720, you have good credit, not incredible, but a check in the right box for sure. 
  • If your credit score is over 720, you have excellent credit and lenders will view you as a “good risk”. 

Now, a credit score is both a snapshot in time and a moving target. Your credit score will change as new information is reported to the credit agencies as these new variables impact your score. When applying for a mortgage, we will “pull a credit report” which gives us a picture of where your credit score is at currently. This snapshot is what the lender uses to assess your credit when determining if they want to lend you money or not.

It’s good to note that although your credit score is a single indicator of credit, it certainly does not make up the entire picture. Lenders will also look at the particulars of your credit report and they will most certainly ask for more information if something seems out of place.

Understanding Credit – Calculating a Credit Score

Both Equifax and Transunion consider the following factors when building your credit score: payment history, amount of money owed, length of credit history, new credit, types of credit. Although there is an exact science to their algorithms, that information is not public knowledge. They have however given us the following categories with a corresponding percentages of how much weight is being put on each. 

Credit Score Calculation

Payment History – 35%

When building your credit score, the most weight is given to how you have dealt with paying your previous debts. And this makes the most sense. If a lender is going to give you money to purchase a property, they might want to see how you repaid your car loan, or your student loans, or your $1,000 Mastercard. If you can’t pay your Rogers cell phone bill on time, what assurance are you giving them that you will pay your mortgage on time? 

Your payment history looks at all your consumer debts or trade lines. A trade line represents a single debt owed to an institution. Trade lines come in many forms, credit card, line of credit, car loan, student loan, and so on. Any time you borrow money, the history of that trade line shows up on your credit report with the payment history from the last 6-7 years being visible. Obviously your most recent payment history will have the most impact on your credit score, positive or negative. 

Payment history is all about how you have managed your trade lines. Have you made all your payments perfectly, or have you been 30 days late, 60 days late, 90 days late, or has the trade line been sent to collection or closed for non-payment? These factors contribute to your score, but are also visible on your credit report for lenders to review when assessing your mortgage application. 

Amount Owed – 30%

How much you owe on a trade line compared to the limit of that trade line impacts your credit score greatly. For example, if you have a limit of $5,000 on your Visa, and you simply use that card to buy gas and groceries every month, and pay it off without ever carrying a balance, that is excellent management and this action will increase your credit score. However if you have a $10,000 Mastercard that you have maxed out and you are making minimum payments, your amount owed compared to the limit is really high, this sends up red flags and will negatively impact your credit score. Not to mention as a lender looks at your credit report, it is a strong indication that you might not be able to handle any more debt. 

Typically you want to use less than 75% of the credit available to you. Going over 75% will negatively impact your score. By staying under 25% of your available credit limit, you demonstrate strong credit management. And that is exactly what lenders want to see, strong credit management. 

Length of Credit History – 15%

Credit-8001

How long you have had credit plays a role in determining your credit score. It also plays a role in how a lender looks at your credit. Unlike smaller loans, when applying for a mortgage, lenders want to see that you have had credit for a minimum of 2 years. Regardless of your credit score, if you haven’t had at least 2 trade lines reporting for 2 years, you are going to have a hard time getting a mortgage. 

The length of your credit history shows how responsible you have been long term with your credit. Time is needed to get the real picture of how responsible you are. Each trade line that is reporting on your credit report will show the date it was opened and a monthly history of your management. Although your history of management is only kept 6-7 years, the age of your trade line will always be visible.

It’s a great idea to always keep your oldest trade lines open and active. Even if you don’t need the credit available, keep the card open, and use it once every 3 months so that it stays live on your credit report. Your credit score will thank you! 

New Credit Inquiries – 10%

Frequently applying for new credit can be a sign that you are experiencing some financial difficulty, especially if the amount owed compared to the limit is over 75%. Applying for new credit can temporarily impact your credit score negatively, however if a new trade line is established, once it gets some positive payment history, your credit score will increase. 

As far as the mortgage process is concerned, instead of going to several lending institutions on your own, and having each one of them pull your credit, as a mortgage broker, I pull your credit report once and then use that same report with multiple lenders. This is a win for you. 

Pulling your credit report multiple times can impact your score negatively, but credit inquiries do only make up 10% of your score, so it’s not really anything to be worried about. Multiple credit inquiries won’t make good credit bad, but it can make bad credit worse. 

Types of Credit – 10%

This is the most insignificant factor in determining your credit, however the type of credit you have does impact your score. Trade lines like fixed installment loans show a scheduled repayment and are considered favourable. While deferred payment loans or payday cash loans from Money Mart can be a sign of money struggles.

Understanding Credit – Established Credit Profile

Established

So when you take your credit score and you combine it with your credit report, as the lender sees it, this is called your credit profile. It’s not just about having a score above 720 (although that is really good), lenders will want to see that you have at least 2 active trade lines, reporting for a minimum of 2 years, with a minimum limit of $2,500. This is the bare minimum to make sure that your credit score has been established over enough time. 

So as you can see, the lender has a lot to think about when it comes to looking at your credit profile and deciding if they want to lend money to you for a mortgage. Next in the series, we will take a look at how your downpayment plays a part in the lender’s decision as well.

If you aren’t sure what your credit score looks like, or if you have established enough credit to be considered for a mortgage, please contact me anytime. I would love to talk through the specifics of your credit report with you and put a plan in place to get you to where you want to go. 

If you would like to know more about the mortgage and housing market, please don’t hesitate to contact me anytime! I am a Trusted Regina Mortgage Broker!

Our Trusted Regina Mortgage Professional Kent Bittner shares some insight about the new mortgage landscape.

The purchase of a home is the largest purchase most people make during their lifetime. Kent Bittner at DLC-Bittner Mortgages, wants to make each and every purchaser aware of the many mortgage options available to them prior to their purchase and closing date. 

Whether you are a first-time buyer or an experienced buyer with excellent credit, DLC - Bittner Mortgages has access to the very best products and mortgage rates available across Canada.
 

Kent Bittner of DLC-Bittner Mortgages is a Trusted Regina Mortgage Broker 


Higher Mortgage Costs as of March 17th


The mortgage landscape in Canada has changed significantly since October 2016. 

What does this mean to you?

First, new standards for borrower qualification were introduced in early October, only weeks prior to government regulated implementation.  The government did not converse or consult with any representatives of our industry.  Nor did they provide reasonable notice - only the hard, “sledgehammer like” realization that things were going to drastically change for potential and existing homeowners.  While interest rates range from 2.05% to 2.89% today, the “new” guidelines see all borrowers, with less than 20% down payment, qualifying at 4.64%.  This reduces purchasing power by about 20%, thus the borrower pre-qualified in September for $300,000 is only able to purchase a home well under $250,000 today.


Secondly, rules were implemented by the government which now require institutions to pay higher costs for their portfolio of insurance, and to have increased levels of capital on reserve.  This essentially means a higher cost of funds to the lender, and in turn you as the borrower.  The new mortgage landscape also has tiered pricing which varies based on loan to value, amortization, insurability and colour of shingles!


Lastly, in mid-January there were also changes announced by the mortgage insurers (CMHC, Genworth and Canada Gauranty). Insurers thought it would be fun to introduce these changes on St Patricks Day, March 17th, 2017.  Not very lucky for those securing mortgage approvals after March 16th!  These changes see premiums rising up to 1.15% for insured purchases.  As an example, if you have 10% down and are purchasing a home, your premium moves from 2.40% to 3.10%.


What does this all mean?

Overall, it is more costly and complex to obtain mortgage financing.  Our industry has been actively lobbying in Ottawa, and while I’m not confident any changes will be peeled back, hopefully the voice of our industry is heard and consulted moving forward.


If you or someone you know is actively searching for a property today we can be of assistance in discussing the lending criteria and recent changes, please contact us to discuss.

Find Bittner Mortgages on Facebook here!

Whether you are a first-time buyer or an experienced buyer with excellent credit, DLC-Bittner Mortgages has access to the best Regina mortgage rates 

Kent Bittner of DLC-Bittner Mortgages is a Trusted Regina Mortgage Broker

 

 

Trusted Regina is proud to introduce our newest partners Skott Enns and Ryan Boughen of TMG in the Mortgage category

Trusted Regina loves partnering up with amazing business' and we are proud to introduce our newest partners.  Skott Enns and Ryan Boughen of TMG The Mortgage Group in the Mortgage category.  

Personally, when I bought my first home, I had no knowledge of the Mortgage industry, and did not know a heck of a lot about mortgage brokers and what they do to help. I felt “safe” dealing with the bank…so that’s what I did.  I had no idea that just by working with a mortgage broker, they have better rates and in the case of Ryan and Skott your best interests at heart!  It's not just us saying that, we asked their clients:

Ryan somehow pulls out deals that banks can’t do.  He is very good at making things work and keeping the client stress free. He is just a good guy very approachable calm and knowledgeable. Very client focused” Christen Johnson – Regina 

 “We talked to 3 separate brokers and went with Skott because he provided better communication and bent over backwards for us.  He was very flexible and when we told people the rate the rate he got us they couldn’t believe it.” Matt Barton – Regina


They both have very active young family's. Ryan along with his wife Natasha, have three young boys and Skott and his wife Shawna have young twin boys.   This really explains why they love helping family's get a mortgage for their first home. Skott and Ryan truly are passionate about helping families keep their money and a successful financial future. They look forward to helping your family, whatever size.  

If you are looking for honest, unbiased advice from a mortgage broker in Regina they would love to talk with you!

Skott Phone 306-201-6500  Ryan Phone 306-570-3379 

No Time to set up an appointment! No Problem! You can also click here to apply now  with Ryan or apply now with Skott and get the ball rolling.

TMG The Mortgage Group Skott Enns & Ryan Boughen are Trusted Regina Mortgage Brokers



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