Posts in category: Residential Mortgage

Divorce can be challenging enough without the financial complication because you have to deal with the emotions. Worst case scenario will be if there are kids involved. You need to help them through the trauma while handling your heartaches.

You might face another post-divorce dilemma if you get through the emotional roller coaster: a mortgage. You might have to sell your current home if it is in both of your names or refinance it as a part of the divorce agreement. But if you are not making enough money to cover the bills, how will you pay for the divorce attorney?

If these daunt you, you should simply take a breather and read this blog carefully. We have tapped into the prowess of seasoned mortgage brokers in Ottawa to help you through this crisis.   

Talk about It

Your mortgage agent will encourage you to talk things over. You have to determine what each party wants. 

You may be tempted to tell your former partner to take off, but it is not that simple. Your ex-spouse might not have enough money for a down payment. With this said, you might have to work side by side with your former spouse in determining the path forward. It is certainly not an easy job, but it is undoubtedly possible with the help of an intermediary.

You also need to determine the value of the property. In this step, you need the help of an appraiser or a realtor. They can tell you how much the property is worth at the divorce.

Options for Handling the Mortgage

Your mortgage agent can offer you a few options. Think of them as life vests in a turbulent ocean of divorce. Here are some:

Sell Your Home

You can sell your house. As mentioned earlier, your home is probably the most valuable asset. It can fetch a reasonable price. The mental stress alone is worth it.  

However, you need to be creative in terms of selling it. You do not have to go the traditional route of a realtor. You can look for buyers online. If you have to sell it for whatever price you can get, you might have to wait for some time because it is no longer a seller’s market. 

Refinance

You might be astounded that you can still avail a refinance, but you still can. It would be best if you simply asked your mortgage agent. To qualify for refinancing, you need to meet the credit requirements of your lender. 

Kindly note that this choice is only available if you can afford the mortgage payment yourself. If you are unsure, you might have to go for a short sale. Remember that refinancing your mortgage has one significant upside: you can keep your house.

Refinancing may be an option after all. You would need to talk to a mortgage agent to see if you are qualified for this. 

Conclusion

You do not have to go through this alone. Your mortgage professional can guide you on this path. They can help you understand your options and decide which one best fits your situation. Do not be afraid to ask.

If you are going through this type of change, you should contact Ottawa Mortgage Services. As a mortgage agent in Ottawa, I can help you through this tricky monetary dilemma. You simply have to consult me, so contact me now for more information!

For the average Canadian, getting a mortgage on a single-family home is a big, big deal. It’s essentially the single largest debt you will ever have to pay off in your life. A typical mortgage will last up to 30 years, 60 years (if you stretch it out), or even 80 years! The good news is, there are ways to pay off your mortgage sooner. Let’s look at some of the ways to do it.

1. Pay More Than the Minimum on your Mortgage

When you get a mortgage on a residential property, you will be required to make monthly payments on it. The amount of these payments is commonly called the “mortgage payment.” If you pay more than the minimum amount of your mortgage payment, then you will be increasing the amount of money you pay against your mortgage on a monthly basis. And as a result, you will be getting rid of the mortgage faster.

The minimum mortgage payment is typically calculated as a percentage of your outstanding mortgage amount. For example, let’s say you have a mortgage of $300,000 and you have 20 years to pay it off. If the minimum payment is 2.5%, then the minimum payment that you will be required to pay per month is $850. But let’s say you decide to make your monthly payments equal to 3%. In this case, your monthly payment will be $1,050. This means that you will end up paying an extra $200 each month. This is money that will be added to the outstanding mortgage, and therefore, your mortgage will be paid off faster.

2. Make your Extra Payments to Pay Off the Principal of the Loan

When you remit payment to your lender, the bank will be able to tell if you are overpaying on your mortgage based on the interest rate. For example, if you make a $1,000 payment, but the bank only charges you $550 in interest, it is going to look at your payment history and see you’ve overpaid by $450. It will then redirect those payments to your principal. If you are already paying more than the minimum amount required to pay the interest, then you can make extra payments that will only be applied to the principal balance.

This will shorten the life of your mortgage, and you will be able to pay it off sooner than later.

3. Consolidate Multiple Mortgages

If you have multiple mortgages, then you may be able to consolidate them into one new mortgage. This will be beneficial because you will only be required to make one mortgage payment every month. Even better, the lower rate on your new mortgage will make your monthly payment lower, and you will be able to save money. This will free up cash flow, and paying down your mortgage will be made more attainable.

4. Utilize Your Tax Refund

A lot of Canadians wait for the tax refund at the end of the year and then use it to pay down debt. If you have a mortgage, then you can apply your tax refund to your mortgage as well. This will reduce the amount of time it takes to pay off your mortgage. Plus, you will have money to use for your other debt payments.

5. Keep Your Payments the Same When Refinancing Your Mortgage

When renewing your mortgage, you will likely be able to get a better rate on it. If you are able to get a lower interest rate, then you will want to move your mortgage to take advantage of it. However, you want to make sure that you do not get a longer-term in order to keep your payment the same. If your mortgage is shorter, then you will be able to pay off your mortgage and get rid of it sooner.

Conclusion

The sooner you can pay off your mortgage, the sooner you can start saving for other things. There are many ways to pay off your mortgage, so if you haven’t started yet, then think about using one of the above methods.

If you’re looking to apply for a mortgage, you need to find an agent that you can trust throughout the process. Ottawa Mortgage Services is the perfect partner to help you get that mortgage that suits your needs and your budget. Our team actively deals with lenders and negotiates all aspects of mortgage underwriting to make sure you get exactly what you need for your loan. Apply now and get a free assessment from a professional mortgage agent.

Forbes encouraged the public to invest in Canada’s real estate early last year. In that article, the columnist enumerated five reasons to do so. Although the blog was targeting non-Canadians, it is safe to say that Canadians should not miss out on this investment opportunity.

To enjoy this privilege, you should avail of a mortgage loan pre-approval. After all, you do not want to be left behind. However, it would help to take the proper steps to get pre-approved. 

If you do not know what to do, you should keep your eyes glued. This blog has enlisted the help of seasoned mortgage brokers in Ottawa to guide you through the loan process. They have enumerated the things to avoid, and here they are:

Paying Your Debt Late

Doing this is probably the fastest way to deny your application for a mortgage loan. Mortgages are meant for payment of the loan, not for other bills. If your payment is delayed, your application could suffer the same fate.

If you have a poor credit score, you should take corrective measures. It includes paying your existing loans, credit cards and other dues. You should also make recurring payments on your credit accounts.

In addition, you should maintain a debt-to-income ratio below 43%. In other words, your income should be able to cover your monthly expenses, including your mortgage payment.

Taking on Additional Debt

If you find it difficult to pay your debts, you should not take on more debt. You may be thinking of applying for a credit card or a personal loan. The better option is to wait until you can do it.

Before you take on a mortgage loan pre-approval, you should know that your credit score should reflect your financial responsibility. It shows the potential lender that you are capable of handling additional debt. As mentioned earlier, if you have bad credit, you should try to improve it. It is the easiest way to convince the loan provider that you will be able to pay on time.

If you have a bad credit score, the lender could hesitate to give you a loan. However, it is better to have a bad credit score than no credit score.

Transferring to a New Job

If you are employed, you should not change your job unless you have concrete chances of improvement. If you opt for a transfer, you should present thorough research about the new firm or industry. You should also know that the transfer could affect your chances of getting a mortgage loan pre-approval.

A lender is less keen to lend money if you just transferred to a new job. It is a sign that you are still looking for stability. Instead of immediately applying for a mortgage loan pre-approval, you should wait a while.

Conclusion 

You should avoid the mistakes mentioned above if you seek a mortgage loan pre-approval. It is essential to remember that a mortgage is a long-term commitment. In addition, you should make a note that you should not forget the down payment. Although there is no explicit rule about giving a 20% down payment, it would be prudent to do so. 

Now that you know more, you should talk to Ottawa Mortgage Services. We have given mortgage loan pre-approval to Ottawa residents. Take that plunge and pursue a profitable real estate investment by getting that loan from us!

A mortgage is very crucial and beneficial when it comes to owning your own home. However, many people struggle to find the right mortgage for them because of the many misconceptions they believe. To learn the truth behind these common misconceptions, keep reading below.

1. Good Mortgages Are More than Just Their Rate

Many people will make the mistake of just focusing on the rate of the mortgage when it is much more than that. The rate of your mortgage is definitely important. However, you also need to consider down payments, closing costs, your interest rates, and other points when you are deciding on a mortgage. All of these are important factors that will determine whether or not a mortgage is the right one for you.

2. Mortgage Brokers Do Not Usually Charge Fees

Some people believe that mortgage brokers charge fees. However, most of the time, they will not charge the client a fee. Instead, they earn money by getting a finders fee from the mortgage lender directly, and this should not be directly taken upon the client. So, if you are hesitating whether to get a broker or not because of possible fees, you can check with them. They most likely do not charge anything or will only have a very minimal fee, if ever.

3. The Ottawa Mortgage Market Is Stable

Ottawa residents are concerned about the supposed bubble that could topple over the mortgage market. However, the truth is that the bubble does not exist, despite what many people think. The mortgage and real estate market in Ottawa is stable and is not something that would topple over any time soon. Instead, the real estate bubble is centred in Toronto and Vancouver, but even then, it is not too big of a bubble to be a major concern for you.

4. Reverse Mortgages Are Not Bad

This is a huge misconception that many people have. Many people who have heard of reverse mortgages assume that they are bad for the elderly. However, this is not the case at all. Reverse mortgages are basically a loan given to the elderly so that they are able to live comfortably in their elderly years when they are no longer working. This loan can be paid off anytime and does not need to be necessarily repaid immediately while the client is alive and living on their property. It works out well for them to do things they want without worrying about their finances, and their property remains in their names, as well.

5. Bank Loans Are Better

This is not necessarily the case. In fact, bank loans are more difficult to deal with as they often have a standardized process that they follow, which makes it more difficult to appeal to them in case you face an emergency. They may also require a lot more documents and could be stricter when it comes to qualifications.

Mortgage lenders are often more forgiving and flexible. There are also many mortgage lenders out there, giving you many choices when it comes to your mortgage needs.

Conclusion

Buying a home is an important decision. Having a mortgage is a good way to make your dream of owning a home come true. As long as you are aware of the common misconceptions, you will be able to make the right decision for yourself and your family.

If you are looking for mortgage services in Ottawa, then you can contact Ottawa Mortgage Services. We are a mortgage agency that will be glad to assist you with pre-approvals, refinancing, and debt consolidation. Get in touch with us to learn more.

Purchasing your dream home is exciting. But you need to apply for a mortgage to turn your dream into reality. Perhaps you want to buy a small fixer-upper and make it your own. You build up some equity as you improve it. Or maybe you want to buy a larger, more expensive home to raise your family. Whatever your dream, you will have to apply for a mortgage.

Here are mistakes you need to avoid when applying for a mortgage:

1. You Do Not Know the True Cost of the Mortgage

It is easy to obtain a mortgage, but it is also easy to overspend. Many people do not truly understand the actual cost of their mortgage.

Many first-time homebuyers mistake asking how much they can afford, not how much the mortgage will cost. It does not matter what the money is worth. You need to make the payments on time. Therefore, it is essential to know the actual cost of your mortgage.

A mortgage can become costly very quickly. You also need to consider taxes, insurance, and private mortgage insurance. There are a lot of hidden costs that you need to consider.

2. You Co-sign for Others

There is a growing trend of young people who are co-signing for parents or friends. If the parent or friend has a poor credit history, the bank is not likely to give that person credit. But, if the parents or friend has a good credit history, it does not make sense to co-sign for that person.

For example, your parents want you to co-sign for a mortgage. The bank will not give them a loan because of their credit history. You, on the other hand, have an excellent credit history. The bank will be more likely to accept your application. However, if you co-sign on this mortgage, you will be responsible for it and the monthly payment.

If you have good credit, the bank should be willing to give you a loan. If they will not, you do not have to co-sign for someone.

3. You Should Max Out Your Credit Cards

Between the home purchase and selecting new furniture, you will have a lot of expenses. You need to get a credit card to cover these expenses.

Many people think they need to max out their credit cards to get a better score. However, this will just hurt your credit score. Instead, you need to only use a little bit of the credit limit on your credit card.

When you pay off the credit card on time, you will build up your credit score. This will help you get approved for a mortgage later on.

4. You Do Not Do Your Homework

When looking for a home, you need to search for the right one. You have to consider what you can afford, your location preferences, the size of the house, and so on.

Many people do not do their homework and apply for a mortgage for a home they cannot afford. You need to do the math to see if you can afford the home. It is crucial to consider the cost of housing, the monthly payment, and the extra costs.

You also need to research and find a lender that you can trust. It would help if you ensured that the lender is reputable and has a good reputation.

Conclusion

A mortgage is a big decision. You will have to make regular payments for a long time. If you make a mistake, the costs can add up quickly. You can incur high penalties and other fees.

If you are looking for the best refinance rates in Ottawa, Ottawa Mortgage Services is here to help you. We are ready to provide mortgage agent services. Apply now!

Taking out a mortgage is a significant decision in your life that shouldn’t be made lightly. To ensure that you are getting everything you need out of the process, you need to ask the right questions to your mortgage agent. The following questions will help you get the information you need from your mortgage company:

How Many Years of Experience Do You Have in This Line of Work?

A mortgage agent should be a professional who knows the industry well. You should be able to tell from the answers to your questions the level of experience your loan officer has. Maintain a healthy skepticism if your loan specialist is new to their job or the mortgage industry in general.

How Long Have You Worked for Your Company?

An experienced mortgage agent will also have been with their company for a time. You should be wary if your loan officer has only been with their company for a short time. You should ask for the loan specialist’s manager’s name and contact information if possible.

What’s the Best Way to Get in Touch With You?

By asking your mortgage agent this question, you will be able to know how receptive they will be to your calls, emails, or texts. Your loan officer should be able to give you several different ways to contact them. Additionally, the person you are speaking with should be able to answer your questions promptly.

Are You Part of Any Industry Groups?

Based on their answer, you can tell whether they are active in their industry or not. Questions like this will help you determine whether your agent is actively trying to improve their knowledge and skills.

Who Will Process My Loan Application?

You should be able to tell a lot about your mortgage agent based on their answer to this question. If they answer with their own name, you will know that they are the one who will be making your loan application. However, if they answer that you will have to deal with someone else, you will know that they are not the one who will be processing your loan.

How Long Is Your Typical Loan Process?

A good mortgage agent will be able to tell you how long their typical loan process takes. You can also ask each loan specialist to provide you with a ballpark figure of how long their process takes. Understanding the process and how it impacts you is very important.

How Will You Contact Me During the Process?

A good loan officer will have several ways they can contact you. Each method should be used in different circumstances. They should also be willing to communicate with you in a manner that is convenient to you.

What Type of Loan Do You Recommend for My Needs?

Your mortgage agent should be able to clearly explain the different loans that are available for your needs. They should also be able to explain each loan’s pros and cons clearly. Additionally, a good one should show that they are knowledgeable about each loan.

Conclusion

The mortgage process is long and tedious. However, it doesn’t have to drain your energy, stress you out, and make you feel like a head of cattle. By asking the right questions, you’ll be able to find a mortgage specialist who knows what they’re doing.

If you need mortgage services in Ottawa, trust Ottawa Mortgage Services. We are committed to guiding you through refinancing, preapproval, debt consolidation, and more. Apply now!

We expect the best every day: We carry umbrellas when it’s cloudy, pop Gravols before a long flight, and buy travel insurance when going overseas. We don’t take on mortgages without doing a similar type of preparation! A mortgage stress test is a good way of preparing yourself for a potentially bad situation. This blog post will help shed light on how this test works.

Everything You Need to Know About a Mortgage Stress Test

The stress test is used to determine the maximum amount of money that you can afford to borrow. It is calculated by looking at how much your mortgage payments will increase (relative to the present interest rate) if you have a higher interest rate for a set period of time. The set period is either 2 or 3 years, depending on the lender.

Why do I need a stress test?

The stress test ensures that you have enough money to comfortably pay off your mortgage, even when rates increase. It is a way for the bank to ensure that you will have enough money left over after paying your mortgage.

How does a stress test work?

When you apply for a mortgage, the bank or lender will find the maximum amount that you can afford to pay after a certain period. This is the maximum amount that you can afford to borrow. They then calculate how much money you would need to have on hand if interest rates increased by a certain percentage (~ 2-3%). They then use the greater of these two figures to determine the amount you can borrow.

How to stress-test your mortgage

There are two different types of mortgage stress tests – an interest rate stress test and a credit stress test.

Interest Rate Stress Test

The interest rate stress test is used specifically to show that you can afford your mortgage if interest rates increase by a certain amount. This is a mandatory test for all borrowers who apply for a mortgage. The test uses a common mortgage stress test formula, where the mortgage rate is multiplied by the amount that you borrowed and then divided by the purchase price of your home.

Credit Stress Test

The credit stress test is used to show the lender that you can still pay off a mortgage if interest rates increase, even if you have a bad credit score. This test is not mandatory, and only some lenders require it. This test is also used to assess your ability to pay off your mortgage if interest rates increase and your credit score decreases.

Conclusion

The stress test is used to determine whether you can afford your mortgage in the case of an interest rate increase. It is mandatory for all mortgage loans. If the lender does not perform a stress test, the risk of default increases. You can do your own test by using an online mortgage calculator. If you have further questions about the stress test or about taking out a mortgage in general, seeking advice from a mortgage agent is the right way to go. 

If you are a first-time home buyer in Ottawa, contact Ottawa Mortgage Services. We provide mortgage agent services for first-time home buyers, self-employed individuals, commercial clients. We also help with refinancing, pre-approvals, and debt consolidation.

When you apply for a mortgage loan, there’s no guarantee that it will be accepted. So, you need to prepare in case your mortgage loan application gets denied. And with this guide, you can hopefully figure out what your next steps would be if your application was rejected. 

Identify the Reason for the Rejection

If your application is rejected, the lender will send a letter explaining why. They may give you an estimate of how long you have to fix the situation before your application will be considered again. In some cases, your mortgage loan application may be denied due to an irregularity in your credit report. If that’s the case, your credit report will be ordered to identify the problem.

If there is a problem, such as an unpaid bill or loan, or past due tax payment, you will be given a chance to make it right. If there are errors on your credit report, you should contact the service that provided it to identify the problem and make corrections.

Even if your application gets denied, you can still check your credit report for errors.

Apply for a Different Loan

If your mortgage application is denied, you may be able to find another solution. If you’ve already got another loan in progress, you may be able to refinance it to get a better interest rate. Or you may be able to find a less expensive home that you can still afford.

If you’re trying to get a new mortgage loan, you can take the time to get your finances in order and reapply. If you have an irregularity on your credit report, you can choose to wait until you get your credit report back and try to make the necessary corrections.

If you’re applying for a fixed-rate loan, you can reapply once your credit score and other financial numbers are back in a range the lender is satisfied with.

Take Action to Get Your Finances in Order

If your application is rejected because your finances aren’t in order, you’ll have to work on them before you reapply. You might be asked to pay down your debt, address bill or loan payments you’re currently ignoring, or get your savings account up to a certain level.

This will require you to work on your finances and make the necessary changes.

If you have a hard time paying your current bills, you may want to consider working with a credit counsellor. If you have unpaid bills, you can use a service like National Debt Relief to negotiate and consolidate your bills into one to make it easier to pay. If you have high-interest rate credit cards, you can work with a card consolidation company to get better rates and make it easier to pay off your debt.

A small change to your finances can make a big difference to your credit. And it can help you get a mortgage loan that you can afford.

Final Thoughts

As you can see, there are many reasons why your mortgage loan application could be rejected. But it’s not the end of the road. You just need to identify the problem and address it. You can work on your finances, wait for your credit report to be corrected, or search for a different home loan. If you can make the necessary changes, you could end up with a mortgage that you can afford.​

Finance your home now with the help of Ottawa Mortgage Services. We are a mortgage agent in Ottawa that provides services for first-time homebuyers, self-employed individuals, and commercial clients. We are actively involved in the mortgage industry and have a great deal of experience preparing mortgages, dealing with lenders and negotiating all aspects of mortgage underwriting. Apply now!