Marina Reznik
555 North Rivermede Road, Unit #1 L4K 4G8 Vaughan, ON, Canada

Why variable rate drops are creating a surge in activity This Spring we’re seeing lenders getting aggressive with their pricing for variable rate mortgages: a sign that lenders are fighting for market share, making it a great time to be shopping for a mortgage! First a reminder of the difference between fixed vs variable. Fixed rates are often well suited to first-time buyers or those who haven’t owned a home for long because they want to know with absolute certainty what the...Continue reading

What is the Qualifying Rate? You’re probably aware that there have been many mortgage rule changes over the last several years, and you’re almost certainly affected whether you’re an existing homeowner or first-time buyer. These rules are designed to ensure a stable long-term housing market, and to make sure Canadians can handle their debt should rates begin to rise. As a result of the rule changes, lenders must ensure that you can handle payments at a certain qualifying rat...e. That rate will vary depending if your mortgage is high ratio (less than 20% equity/downpayment), or conventional (more than 20% equity/downpayment). The qualifying rate will be higher than the rate of your actual mortgage: a situation that some may find frustrating. But rest assured that your actual payments will be based on the lower mortgage contract rate that I negotiate for you. Qualifying Rate for High Ratio Mortgages The Department of Finance introduced the qualifying rate for high ratio mortgages in 2010. The high-ratio qualifying rate is a 5-year rate published every week by the Bank of Canada. The Bank surveys the six major banks’ posted 5-year rates every Wednesday and uses a mode average of those rates to set the official benchmark rate. Your lender is required to use this rate to calculate debt service ratios when reviewing mortgage applications for all insured high-ratio mortgages. Qualifying Rate for Conventional Mortgages The Office of the Superintendent of Financial Institutions (OSFI) implemented a new stress test or qualifying rate for conventional mortgages that went into effect January 1, 2018. This requires federally regulated lenders to qualify all new conventional mortgages at whichever rate is higher: the benchmark rate (described above), or your actual contracted mortgage rate plus 2%. An interesting outcome is that this qualifying rate is often higher than the rate used when qualifying high-ratio mortgages where there is less equity or downpayment. Why the difference? One reason is simply because these rules were implemented by two different government bodies. While mortgages have become more complex, this doesn’t mean that Canadians can’t get into their dream homes, consolidate debt, take out equity, or buy a second property. It just means that if you have an upcoming new mortgage need, we should discuss your plans as early as possible. I have access to many lenders that aren’t federally regulated and strategies that you can employ to improve your credit and ensure you are in the best situation possible when you need financing. I am here to help you so please get in touch at any time. Whether you are purchasing a home, refinancing or renewing your mortgage, I can help.

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Four Insurance Definitions for Homebuyers It’s easy to get caught up in home buying frenzy and just focus on finding that perfect home. During all that excitement, be sure to take some time to get acquainted with a few key terms. Here are the four types of insurance you’ll encounter: HIGH-RATIO MORTGAGE INSURACE If your downpayment is between 5% and 20%, you are required to have high-ratio mortgage insurance. This insurance is there to protect the lender, and the premium is... almost always added to your mortgage amount. Example: Purchase price is $400,000 and you have 5% downpayment, for a total mortgage amount of $380,000. The mortgage insurance premium is 4% or $15,200, which is then added to your mortgage. The insurance premium declines at 10% and at 15% down. If you’ve saved up more than 20% of the purchase price, then you don’t need this insurance unless it’s required by the lender. TITLE INSURANCE Having title means you have legal ownership of property. Title insurance protects owners and their lenders against losses related to the property’s title or ownership, such as: unknown title defects, liens against the property’s title, encroachment issues, title fraud, survey errors, and other title-related issues that can affect your ability to sell, mortgage or lease your property in the future. Premiums are collected upon purchase and based on the value of the property. HOME & PROPERTY INSURANCE This must-have insurance protects against risks to your property and contents in the event of fire, theft and some weather damage; it also includes liability insurance in the event that someone is hurt on the insured property. Most lenders require proof of home insurance, so be sure to have your policy in place after your offer is accepted and before your closing date. MORTGAGE LIFE INSURANCE In the event of death, this insurance will pay the insured balance of the mortgage, discharge fdees and prepayment penalties to the lender, and leaves the property with little or no mortgage for the surviving family or estate. There are many reasons to strongly consider this coverage because anything can happen at any age and at any time. Premiums are calculated based on age and the original mortgage balance. Insurance can protect you and your family throughout your home ownership journey. If you are unsure about something, get in touch. I’m here to make sure your journey has a happy ending! *New 2018 Mortgage Rules* Conventional mortgages must qualify at the government benchmark rate (currently 5.14%), or your contract rate plus 2%, whichever is higher.