Planning

Michael Hallett • Aug 25, 2017
Do successful entrepreneurs just open their doors for business without a business plan? Does a chef open a restaurant without a menu? Do pilots depart the hanger without a flight plan? Can you build a house without architectural plans?...I could go on forever! The answer is NO to all the above.

I’m a planner. Whether it’s for personal or business purposes, I always have a plan. I operate best when I know what is happening and how I’m doing it. Planning is the key ingredient to crossing the finish line successfully.

Case in point…

When it comes to acquiring a mortgage, whether it’s your first, second, third…or tenth you need to establish a PLAN! You need to connect with your trusted Mortgage Broker to start the application process.

Am I suggesting you need to create a full blown SWOT analysis (Strengths Weaknesses Opportunities and Threats) to seek mortgage financing?

No… but it wouldn’t hurt.

All joking aside, you should have an action plan: PLAN A and possibly a PLAN B. If you need a PLAN C then there should have been more preparation put into PLANs A and B.

There are 4 parts to every mortgage.

  1. DOWN PAYMENT – How much skin-in-the-game are you putting in? Where is it coming from, saved or gifted? Where is it now?
  2. CREDIT – How long have you had it? What are the limits and how do you utilize it? How many forms of credit do you have?
  3. INCOME – How long have you been at the current job? Salary or hourly? Have you jumped around to different industries or stayed within? Self-employed or employee?
  4. SUBJECT PROPERTY – Where is the property? What is the property? Condo, townhouse, detached, farm on acreage with coach house and out-buildings? Age? Materials used to build? Remaining economic life? Square footage? Past or present issues?   

Before you find the subject property to purchase, the best course of action is to prepare. Why try to obtain financing in three to six days when you could have reduced the stress level by planning ahead of time. Mortgage Brokers call it the Pre-Qualifying Process. As a mortgage professional, I review the first three parts of the application and lock in a rate for up to 120 days.

Some people may ask WHY plan or WHEN to start planning. The main reason one should plan is to simply make sure there are no hidden surprises. If there are any negative aspects to the file, a plan would give us time to find a solution. When the decision has been made to purchase or re-finance (and mortgage funds are required), that is the exact time to connect with your Mortgage Broker. The time is now… immediately. A plan will double your success rate for obtaining approval for mortgage financing.

I have just recently embarked on a plan to take my business to the next level. Part of process requires me to think about how I am going to be able to handle an increase in the number of mortgage applications and all the duties that come along with it. To maintain my current service level, I have hired an associate to work alongside me. I would like to take this opportunity to introduce Mackenzie Davidson to the DLC HallettMortgage team.

Mackenzie’s Bio.

I have been working in the financial industry for 8 + years, with one of Canada’s major banks, starting as a teller, working my way up to Financial Advisor, moving to Alberta and back. I became a licensed Mutual Fund Representative in 2012. For a few years I helped clients with their whole financial portfolio, giving them investment advice and setting up their retirement savings. Even though I really enjoyed helping clients with their investments, my passion was assisting clients with their mortgage financing needs. In early 2017 I became a licensed Mortgage Broker while I was on maternity leave with my daughter, Annabelle. A few things I love in life are my family and friends, my soon-to-be husband Adam and our daughter, my pets, being outside as well as trying new things.

Success in the future requires a plan; big or small, formal or informal. A plan will guide you through the necessary steps.

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MICHAEL HALLETT
Mortgage Broker

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Bridge Financing and Deposit Lending

By Michael Hallett • 24 Apr, 2024
Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea. Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in. But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in. Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying. So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home. Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available. A firm sale is the key to securing bridge financing and a deposit loan. So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

Understanding the Recent Housing Affordability Measures in Canada

By Michael Hallett • 18 Apr, 2024
In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers. Increased Home Buyer's Plan (HBP) Withdrawal Limit Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market. Extended Repayment Period for HBP Withdrawals In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment. 30-Year Mortgage Amortizations for Newly Built Homes Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively. Changes to the Canadian Mortgage Charter The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship. The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country. As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances. If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.
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