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Mortgage Product Update

Product Update

The mortgage market is an ever changing landscape and that is evident by the multiple rule changes announced over the past few years.  It pays to know all the options available to you before deciding which route is best suited to meet your specific needs. While some of the tips below are not meant for everyone, there may be one that fits your situation perfectly and I encourage you to have a look. I’ve included a brief explanation of each product along with some of the pertinent details you should be aware of. Of course I always encourage you to discuss the details and fine print of the specialty mortgage products with your favorite mortgage professional.

Refinance Your Home up to 85% of Your Home Value

The new rules put a cap at 80% of your home value; however, the cash-back product can afford you that extra 5% if required. Be aware this product comes at much higher rates and a larger payout penalty should you decide to break the term early. Even though the interest rate is higher than best rates available today, this product may be the solution for some to offset any high-rate unsecured debt like credit cards or perhaps you are in a high rate private mortgage that you now want to get out of.

You Can Finance A “Fixer-Upper” Purchase

With an “improvement plus” mortgage option you can finance renovations on the home you purchase.  This is a great product if you want to include the cost of your renovations into your mortgage at a low rate instead of using other high rate credit facilities after you move in.  Quotes are required initially while the funds for the cost of renovations are advanced to you after the work has been completed which you would use to pay the contractors who did the work.

Amortizations of up to 35 years

Some lenders still offer extended amortizations when you have more than a 20% downpayment or you have more than 20% equity available in the home you already own.  You can usually get best rates for a 35-year amortization, however, a rate premium may be charged in some situations.

Home Equity Line of Credit up to 80% of Your Home Value

Now that the new rules have been implemented, majority of the lenders are now  limited to lending up to only 65% of your home value in the form of a home equity line of credit (HELOC).  Fortunately, some lenders are exempt from that rule which means they can still offer HELOC’s at up to 80% of your home value at competitive rates. And further to that, a couple of banks who offer “bundle” mortgage products are able to refinance your home up to 80% of the value as long as there is a fixed mortgage product portion along with a line of credit portion. Lines of credit secured by real estate most often require minimum payments of interest only, are re-advanceable and are fully open meaning no payout penalty. This is great if you’re unsure of what you want to do with a property long term and want to minimize your payout penalty or if you’re an investor looking to maximize cash-flow. A home equity line of credit can also go in second place behind your first mortgage if you are unable to break your first mortgage at this time due to a payout penalty, making them a perfect product for debt consolidation.

Co-Applicant has No Credit

They can still go on the mortgage and on the house title and some lenders will also allow us to use their income to help qualify for a higher mortgage amount. It’s difficult to get a pre-approval for this type of mortgage product as it is usually only approved on a case-by-case basis.

Qualify while on Maternity Leave

If you are worried about how to qualify for a mortgage if you are on maternity leave, I have good news! There are some lenders who will include 100% of your return to work income in qualifying. This could mean the difference between a house and an apartment in some cases. There are a couple of more guidelines that must be met which can be discussed with your mortgage professional.

Switch Your Mortgage for FREE

Whether you’re up for renewal or want to refinance your mortgage, multiple lenders attempt to lure you over by covering the costs of switching your mortgage to them. This works out great for you because you can take advantage of low interest rates with minimal out of pocket cost.

Recently Self-Employed

Even if you’re recently self-employed, you can still qualify for a mortgage. There is a higher minimum downpayment requirement when you’re qualifying as a self-employed borrower, than if you were qualifying based on your “verifiable” income. The self-employed mortgage product solutions are unique, just like each self-employed borrower is, let’s chat about your specific situation so we can pick a lender that suits your needs.

Discharged from Bankruptcy Recently

We have a whole blog post about rebuilding your credit after a bankruptcy in order to qualify for best rates. If you’re in a hurry, you can still get a mortgage shortly after being discharged from bankruptcy. Just don’t be surprised if you’re asked for a large downpayment and your interest rate is higher than best rates available today. Talk to us about the other requirements involved when borrowing after a bankruptcy.

{Insert disclaimer} The above specialty mortgage products come with more fine print & details than just a regular ol’ mortgage and it is imperative you understand all the benefits and risks of the niche mortgage you may be considering. On top of understanding the mortgage terms, you could be asked to meet stricter qualifying requirements. Let’s have a candid chat about the ins & outs of  your mortgage options so you feel confident making your next mortgage decision.

As always, if you’re in the market for a trusted Mortgage Professional with Personality, call The MortgageGirls at 1.866.932.8412 or email info@mortgagegirl.ca. Stay in the loop by following us on Twitter @Mortgagegirlca.

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