Posts in category: Residential Mortgage

If you’re a first-time home buyer in Ottawa, then you’ll have to start exploring your financing options to help you purchase your dream home. The prospect of getting your first mortgage can be intimidating, especially if you aren’t sure of what you need. But working with a mortgage agent in Ottawa who truly knows what they’re talking about can help you separate fact from fiction.

Part of getting a mortgage is getting pre-approved for it. When you get a mortgage pre-approval, you can secure an interest rate for up to 120 days while acquiring a credible estimate of your mortgage limit. With this in hand, you can demonstrate your seriousness as a buyer to agents and home sellers as you’ve taken the time to get your qualifications. Additionally, although pre-approval can take some time, it can also save you the inconvenience of applying for a mortgage when you’re occupied from closing on your new home. 

What Is a Mortgage Pre-approval?

A mortgage pre-approval is securing an amount of money that you can borrow from a lender should you choose to buy a home. It also gives you a locked-in interest rate. However, the pre-approval and locked-in rates are valid only for a specific period, usually 60 to 120 days. You will also have to supply the lender with documents such as your proof of income, employment, bank statements, and a credit check, similar to the process of applying for a mortgage. 

When everything checks out, the lender will give you a mortgage pre-approval letter, which can boost your chances of the seller accepting your offer on a home as it demonstrates your secured financing. However, keep in mind that a pre-approval is not a guarantee that the lender will give you a mortgage, nor does it oblige you to get your mortgage from that specific lender.

How Is It Different From a Pre-Qualification?

A mortgage pre-qualification is a straightforward way to estimate how much mortgage you can afford based on your income. However, a pre-approval carries more value since it comes with a written contract and involves a more comprehensive study of your financial situation. You can get pre-qualified online or over the phone by offering a few details about your financial situation, which is great for when you’re in the early stages of buying a home. However, if you have a complex financial standing or need a more precise estimate, a pre-approval offers more assurance. It also shows the seller that you’re sincere about your interest in their home, giving you a higher chance of closing on it.

How Do You Get a Mortgage Pre-approval?

You can get pre-approved from a mortgage broker or most lenders. You’ll have to supply the lender with detailed information about your financial situation and establish your income. Some documents you may have to submit include verification of employment, bank statements, credit report, and your previous tax assessment. 

Your credit score plays a vital role in deciding on the amount of mortgage for which you qualify. If you have a low credit score, lenders will be more likely to decline your mortgage. The required credit score ranges between 300 to 900, but most major banks in Canada hold it at a steady 600 to 700. Your score is determined by various factors that account for your potential to be a safe, responsible borrower or one who has difficulty repaying loans.

For instance, if you have a long history of paying your debts and bills on time, your credit score would increase. However, if you miss a payment or bill, your credit score could sharply drop. A hard credit check can also temporarily affect your credit score, which happens when you apply for a loan or line of credit. This happens because lenders are typically cautious of borrowers who borrow money from various lenders out of nowhere. You can get a free annual credit report from each prominent credit reporter in Canada, Equifax and TransUnion, to keep a close eye on your score.

Conclusion

A mortgage pre-approval can help you move closer to securing your dream home while preparing you for the mortgage process. It tells you how much you can borrow from lenders, allowing you to analyze your credit situation and find a lender that offers the most favourable rates and terms.

If you’re looking for a mortgage agent in Ottawa, be sure to let us know at Ottawa Mortgage Services! We have the best refinance rates and mortgage services around, helping first-time home buyers, self-employed individuals, and commercial clients get a mortgage. We also assist in refinancing, pre-approvals, and debt consolidation. Contact us today to find out more about how we can help you!

Refinancing a mortgage means paying off your current mortgage and replacing it with a new home loan. Doing it can seem tempting, especially when refinance home loan rates are low. But before going through the process, keep in mind that it is a major financial transaction. It can save or cost you money, depending on your goals and circumstances. 

To learn more about how a mortgage refinance can help you and determine if now is the best time to take out a new mortgage, you should completely understand how it works. Here are several signs for why it makes the most financial sense:

1. You Want to Shorten Your Loan Term

Many first-time borrowers start out with a 25-year home loan. If you want to become debt-free much faster and save a significant amount of money in interest, consider refinancing to a 15-year fixed-rate mortgage. Besides being able to shorten your term without a big increase in your monthly payments, doing this lets you build your equity faster. This is especially helpful if you are planning to sell your home.

2. You Prefer a Better Mortgage Rate

Refinancing lets you lower the interest rate on your current mortgage. This allows you to save money, boost the equity in your home, and reduce your monthly payment. To figure out if refinancing is a good idea, a rule of thumb is to ensure you can reduce your interest rate by a significant percentage rate to make it worthwhile.

3. You Prioritize Having Lower Monthly Payments

You could save money through refinancing. When you lower the interest rate, you can also lower your monthly payments. This is particularly true if your new loan has the same payoff date as your previous mortgage. Additionally, you can lower your monthly payments by extending the payoff date so you can pay less in principal.

4. You Want to Have More Predictable Costs

If you took out an adjustable-rate mortgage (ARM), you may notice that it starts at a low, fixed-rate for a specific term. But that rate may increase for the remaining loan term after this pre-specified term ends. Thankfully, you can secure a low initial rate by converting your existing mortgage into a fixed-rate loan. Doing this strategy is ideal for you if rates recently dropped, and you now prefer a predictable payment. 

5. You Need to Borrow Money

You never know when a financial crisis can happen. If you need quick cash, you can take some out from your home equity with a cash-out refinance. It lets you obtain funds for any purpose as long as you have over 20 percent equity. So whether you need money for education     or immediate roof repair, you can get the money you need to cover these expenses.

6. You Have to Remove a Person from a Mortgage

Some major life changes like a divorce can cause someone who originally signed onto a mortgage to be no longer held financially responsible. To remove that person from that loan and free them of liability, refinancing is necessary. 

Conclusion

There are many reasons why refinancing can be beneficial for you. But just like any other big transaction, it comes with risks and disadvantages. For this reason, make sure to consider the list in this guide and do the math. If you think it’s time to refinance your mortgage, reach out to trusted mortgage agents.

Whether you prioritize lowering your monthly payments, increasing your cash flow, or shortening your loan term, you can get the best mortgage refinance rates from Ottawa Mortgage Services. We take the time to understand your situation and assess the right mortgage solution for you. Contact us for a free consultation!

There are many financial products that are available to help you reach financial freedom and stability. During difficult financial times, you may have used these loan products to ease your financial burden. However, when the time comes to pay off these debts, it may seem like forever when you try and pay off your loans’ interests, let alone the principal amount itself. 

At this point, you may be thinking that these high-interest loan products may have permanently damaged your chances of reaching financial stability. However, as you pay off your loans, you shouldn’t get too discouraged. The good news is that there is a way to better manage your debts and get on top of your financial situation. This blog post will shed some light on what this secret weapon is.

How to Use Your Mortgage to Consolidate High-Interest Debt

You may be wondering how this can be done, it involves looking into the current equity of your home. You will be able to consolidate your debt by refinancing your home loan. If your home has built up a certain amount of equity, you may be able to have your existing home loan refinanced into a debt consolidation mortgage. 

Consolidating Debt into Mortgage

Using the equity, you are able to get yourself in a better financial position. Ideally, the idea of taking out this type of refinanced mortgage is to use it to slowly pay off your high-interest loans and consolidate them into one loan payment that will have a lower interest rate.

The first step is to find a lender that provides home equity loans, or that can give you a home equity line of credit. The equity of your home will act as the security for the loan. By consolidating all your debts into one convenient payment, you will be able to gain control over your financial situation and pay your debts sooner rather than later. 

What If You Don’t Have an Existing Mortgage Yet?

This question may have popped into your mind if you are considering consolidating your debt and taking out a fresh new mortgage. The good news is that this option is not only available for people who have existing mortgages. First-time applicants for mortgages may also be able to take advantage of the benefits of this type of mortgage.

For you to be able to qualify, your loan-to-value or LTV needs to be under a certain amount. LTV refers to the size of your loan in comparison to your home’s value. Should your lender decide that your LTV has an acceptable range, they may let you roll in your other existing debts into the new mortgage for the purchase of a new home.

Conclusion

If you have read this far, you will now be aware of how using your equity on your mortgage can be wielded as a tool to help you gain financial security in the long run. If it is done right, you may be able to see an enormous amount of savings and see all your debts properly paid off when you’re through. 

If you are ready to get a better deal on your interest rate and gain financial security in the process, come to Ottawa Mortgage Services! We believe that all Canadians should have the right to invest in their future. We strive to provide convenient and transparent financial services to help you reach your goals. Contact now for a free consultation and assessment to find the financial structure best for you.

Securing mortgage approval has been a common problem among self-employed individuals. It is common knowledge that lenders prefer long-term employment records to ensure consistent payments, over variable self-employed income. But it is not always impossible. 

In Canada, the growing number of self-employed individuals is forcing lenders to adapt. They are continuously trying to find a way to meet their potential clients’ needs.

If you are a self-employed person considering a mortgage to finance your home purchase, you need to prove how financially stable and capable you are. It all starts with ensuring that you have financial strength. If a self-employed person can prove that they have a good income and pay all their bills on time, they have a high chance of successful mortgage approval. 

Here are some mistakes you should avoid:

Mistake 1: Not Reporting All Your Income

Lenders rely primarily on your reported income when making their assessment. Your income will define how much money you can spend and borrow. If you only report a fraction of what you earn, lenders might assume that this is your full financial capacity. Therefore, whether you make cash, goods, or traded services, it would be best to report them all to your tax income report to show your actual worth. 

Mistake 2: Overstating Earnings

Although reporting your income is recommended, overstating income also has its consequences. Usually, some claim additional income to improve their potential mortgage approval. However, before making claims like this, make sure that you have legal documents to support them. At the same time, these documents should pass the lender’s review. 

Should your application get approved and your stated income does not match your actual income, it might be challenging for you to pay off your monthly mortgage. Not being able to pay your monthly mortgage could result in penalties or foreclosure.

Mistake 3: Concealing Debts

If you hide your debts, the lender would not have a clear picture of how much money you have. The debt to income ratio is an essential element in determining how much you can borrow. Anyone can still apply for a mortgage despite having debt, but lenders need to see how well you manage them. Borrowers who have debt usually find it challenging to pay off subsequent loans, and you need to prove your lenders wrong instead of hiding it from them. 

Mistake 4: Avoiding Having Credit Cards or Loans

Why get credit cards if you do not want to have debts? Unfortunately, some people see credit cards and loans as traps instead of a potential asset that can prove your creditworthiness. Having a loan or credit card bill to pay every month and paying them on time shows how well you manage your finances and pay your bills. Having a credit card or another manageable loan could be a helpful tool for you to secure your mortgage. 

Conclusion

If you plan to get a mortgage loan soon and are self-employed, make sure you avoid committing the mistakes listed above. Focus on what lenders prefer: a person who has good credit and income. If you can prove those and your capacity to pay back your mortgage, you can have a good chance of getting approval for the loan you want. 

Also ensure you find a mortgage agent who can help you find the best offer that fits your unique situation. Ottawa Mortgage Services is an Ottawa-based mortgage agent that can help you find lenders that let self-employed Canadians with good records qualify for the lowest mortgage rates. Contact us to learn how we can help. 

Buying a house is never simple. It involves many steps before you can call a property your own. More importantly, it involves a considerable amount of money. Fortunately, mortgage agents can help aspiring homeowners afford their dream homes. 

These agents can assist their clients in finding the best financing for the property they are eyeing. Their main concern is your purchase’s financial details. Therefore, they can help you get the best mortgage to purchase your dream home.  

Before trusting any mortgage agent, you need to know a few crucial details first. Such details will help you assess if the mortgage agent is right for you.

1: Their Advantage Over Others

There are many mortgage agents everywhere, and you can work with any of them if you wish. That is why your mortgage agent should be able to convince you to stick to their service. Look for an agent who is honest and excellent at their job. Ask them what makes their service better than others. Find that x-factor that draws you in—whatever it may be. 

2: Mortgage Pre-Approval

The home purchase budget is one of the most difficult things to finalize during the home search journey, but it is a vital detail that could affect the home buying process. Try to get a mortgage pre-approval ahead to avoid the back and forth question about how much you are willing to shell out vs. how much the lender could loan you. 

Your mortgage agent can help you secure this information. Knowing how much you are working with can help save your time and limit your options. 

3: The Best Lender Options

Every homebuyer’s financial situation is different, and the mortgage agent’s role is to identify which lender is best for your case. They are knowledgeable in this field, so they should already have the top-of-mind lenders to recommend. Usually, agents decide based on these factors:

• Who among the lenders could provide you with the least amount of risk?
• Who among the lenders could work well with the client’s financial situation?
• Who offers the best terms and conditions?

Choosing which lender to tap is one of the biggest decisions you would make in this journey, and your agent should help you make that choice. 

4: The Approval Process

Your mortgage agent should also be able to guide you through the process of the mortgage application, waiting time, and approval. Before you even go through all the steps, you need to understand what they are for, the things you need to prepare, and the information that could make the process smoother. 

Conclusion

Mortgage agents can help you manage the overwhelming preparation and steps of looking for the best mortgage lender. To make sure you find the right one, you also need to have a suitable mortgage agent. Asking the information listed above could help you make the right decision among your many choices. 

If you are a first-time home buyer in Ottawa looking for a mortgage agent to work with you, consider us at Ottawa Mortgage Services. We make sure our clients understand the mortgage process and get only the best product that suits their needs. Feel free to reach us if you have any questions. 

The urban landscape is taking over, and as cosmopolitan spaces dominate your quaint, single-family neighbourhoods, multi-family real estate is now the hottest commodity in today’s housing market. 

Living in a duplex may seem like a far cry from the white, picket-fenced house people imagine when thinking of the traditional home, but it’s the new fantasy for modern homeowners due to its extensive benefits. 

But what exactly is Multi-Family Housing? 

Unlike single-family properties, multi-family housing refers to buildings like a duplex, townhome, or apartment complex, all of which are residential spaces with more than one unit. Each unit comes with its own essential utilities, though a multi-family house is typically characterized by having up to four units or fewer. Anything more than that number will constitute a commercial property. 

Who Buys Multi-Family Housing? 

Since multi-family homes allow different families to live on the same property with separate and completely independent spaces, it’s often the best choice for multigenerational families. It’s also a great investment property with high demand, making it appealing to novice or seasoned real estate investors who want to diversify their portfolios. 

Not to mention the additional rental income you can add to your earnings makes multi-family housing one of the most reliable “hacks” investors can use to build a lucrative career in real estate.

What are the Benefits of Investing In a Multi-Family Housing?

Advantages of a Multi-Family Home 

• Steady Cash Flow – you can earn a steady income on the side from your tenants, making it a stable side hustle that can offset your mortgage payments for the multi-family housing and your own!
  
• More Pool of Tenants – with more units under your wing, you have more options to rent and fill the space, all while having an independent unit for your family.
  
• Greater Control Over Property Value – seeing as multi-family homes only deal with four or fewer units, it’s easier to stay on top of the repairs and maintenance checks. Living in one unit also gives you more control over the necessary renovations, upgrades, and property value.
  
• More Tax Benefits – running multi-family housing means you can write off most of the expenses for repairs and even your mortgage’s interest payments as a business expense.
  
• Increase Your Investment Portfolio – seeing as you’ll be managing multiple units, multi-family housing can do wonders for creating a dynamic and expansive investment portfolio. 

The Bottom Line: Knowing What to Expect Before Settling Down In a Multi-Family Home

It’s becoming the go-to choice among younger generations since multi-family homes are a bang for the buck choice in the real estate sphere, though it comes with its own pros and cons. The list above explores the unique advantages of owning multi-family housing and what makes it a lucrative yet safe choice compared to other real estate investments. 

How Can We Help You?

Finding and buying a home can be tricky, especially when you put your finances into the picture. Fortunately, with the help of Ottawa Mortgage Services, buying your home for the first time won’t be such a pain. 

Our expert mortgage agent in Ottawa Mortgage Services helps first-time homebuyers discover the different possibilities of home buying, obtaining pre-approval letters, providing assistance for refinancing, offering debt consolidation, and more. Looking for a mortgage? Apply online today!

There can be a lot of reasons as to why you need to undergo mortgage refinancing. For many, it can be a breath of fresh air to have a second opportunity to manage the loan you take out.

There are some homeowners who need to finance their current mortgage loan, while others have to consolidate debt in other areas of their lives. Some situations also use refinancing in order to purchase an additional home and other opportunities.

Although not for everyone, undergoing a refinancing transaction with a mortgage lender can have a lot of advantages. This is especially true in Ottawa where the market can slide in favour of the average homeowner. Here are just a couple of reasons why you should consider or get behind mortgage refinancing. 

Achieving Lower Rates

The whole goal of mortgage refinancing is to allow a homeowner to get lower interest rates. Even a percentage lower can make the biggest difference, though it’s important to consult with a financial advisor whether or not you’d benefit from refinancing at a certain period of time. There are days where the interest rates can go higher, making it more difficult.

Upon determining the interest rates and what benefit you’d have, get in contact with a trusted broker. They should be able to handle your mortgage refinancing at no cost to you so that you can manage a mortgage loan with a lower interest rate. 

Getting a Better Credit Score

Under a specific set of circumstances, it is possible for a homeowner to improve their credit score when mortgage refinancing. This is mostly because the mortgage refinance does increase an individual’s ability to borrow and put things on credit. Good borrowing power will usually entail a high credit score.

It’s important to keep in mind that it may not occur for everyone, though. There are cases when credit score can take a hit instead depending on your credit history. Be sure to discuss what a mortgage refinance means for you with a financial advisor before going ahead with it.

Being in a Better Financial Position

Mortgage refinancing can often give you the upper hand over your own finances rather than the other way around. It can bring a lot of relief to have the ability to pay your loan and have enough time to manage and deal with the second loan. Some homeowners also choose to forward their payments quicker to fully pay off and complete the initial mortgage loan.

Accessing Your Home’s Equity

Aside from redirecting your cash, another big benefit of taking on a mortgage refinance is that you can choose to access your home equity. It can be pretty significant in Ottawa, where homeowners can borrow up to 80% of their home’s equity. It’s a big deal, even with consideration of the amount left for the first mortgage and the determining property value. 

Conclusion

Understanding the solace and relief that mortgage refinancing can provide to homeowners can be enticing to undergo. There are so many opportunities that you’d be able to reach. Just remember to consult a financial expert along the way. 

Looking for the best mortgage refinance rates in Ottawa? Ottawa Mortgage Services’s mortgage agents offer refinancing and a range of other services to help you navigate the mortgage industry. Get a free assessment today!

The rate of self-employed Canadians is growing at a rapid pace, and as a result, the challenge of getting a mortgage for self-employed individuals is rising too.This is because income can be less predictable, unlike working with a steady employer. 

Additionally, some banks won’t recognize those who are self-employed or own a business because of an unclear history of steady earnings and tax filings. With that being said, getting a secure mortgage as a self-employed individual can be difficult. However, don’t feel disheartened because it’s not impossible. 

For this reason, many people will seek professional mortgage services to ensure they follow the right steps, and that will help them find the best deals based on their financial health.

If you’re thinking of getting a mortgage, but you’re self-employed, don’t fret. Below are some options that can help you apply for a mortgage. Let’s take a look!

What Documents Do I Need to Present?

When you’re applying for a mortgage, the documents you need to present may vary slightly. And with any application, you must provide all the necessary documents to help strengthen your application. 

Most of the time, self-employed individuals will need to show proof of income in order to obtain regular mortgage rates and products. However, some people may not provide evidence of income, so instead, they need to prove a strong credit history.

Here are some documents that self-employed individuals need to get a mortgage:

• Proof that your GST/HST is paid in full;
• Notices of Assessments;
• Contracts that provide proof of revenue and past revenue for the past few years;
• Business and personal credit scores;
• Proof of principal owner of a business;
• Business license;
• Proof that your down payment was not gifted;

What Factors Can Increase My Chances for Mortgage Approval?

1. Credit Score

When applying for a mortgage, your credit score plays a vital role in approval. When you pay off your credit card debt, don’t surpass your credit limit, consistently pay off bills, and ensure debts don’t go to collections in order to increase your credit score. 

When you have a high credit score, you will look more attractive to a lender, allowing you to qualify for lower interest rates. 

2. Down Payment

When you have more equity in your home, you are less likely to become delinquent when going through financial hardships. Putting down a hefty down payment for your home will make the bank see you as less risky. Additionally, a bigger down payment may also give you lower, more affordable monthly mortgage payments. 

For this reason, it’s best to seek mortgage advice to ensure that you’re getting the best deals and that you can negotiate a better rate for both your downpayment and monthly mortgage payments. 

3. Present Self-Employment History and Records

Having accurate records of your self-employment will give you a strong and effective track record. This way, banks will most likely lend to you after seeing that your self-employment is a success. 

With that being said, ensure that you have at least two years of self-employment history before applying for a mortgage. Also make sure to keep an eye on interest rates because when it’s low, it’s worth applying for a mortgage, even if you don’t have all your self-employment history documented. 

The Bottom Line: Getting a Mortgage When Self-Employed Is a Different Ball Game

Although getting a mortgage can be difficult for some self-employed individuals, know that it’s still possible, especially when you prepare yourself financially, get your documents ready, and seek out mortgage advice to help you secure the best mortgage deal. 

Seeing as mortgages are huge financial commitments, it’s best to ensure that, as a self-employed individual, you get to keep your finances in check and ensure steady cash flow to avoid any obstacles along the way. 

How Can Ottawa Mortgage Service Help You?

Are You looking for mortgage services in Ottawa? If so, you’ve come to the right place. 

I am Ghummaz Bhatti, and I offer a wide variety of mortgage related services that can help you land the perfect mortgage loan. I help first-time homebuyers, assist in pre-approval letters, provide support to self-employed individuals, refinancing, and more. 

Get a free assessment today!

For many, owning their first home is a lifelong dream and a significant milestone. However, like any new experience, being a first-time homebuyer can come with waves of uncertainty and you may catch yourself second-guessing your decisions at some point. 

That’s why it helps to follow a proper guide and process so you can gain confidence when going through the process of securing the home of your dreams. In that regard, proper planning comes with interviewing realtor options, looking at houses, negotiating bids, and of course, qualifying for a mortgage. 

What It Means to Plan for Your Home Buying Journey 

When it comes to buying a home, getting pre-approved is one of the best ways to simplify your buying process and gives you buying power confidence. With a pre-approval, you get to know how much you can borrow with minimal risk, allowing you to remain financially stable throughout this home buying journey. 

For this reason, it’s best to work with a reliable mortgage agent to ensure that your financial status is considered; you’re choosing the right deal that can help you in your buying process. 

If you’re thinking of getting a mortgage pre-approval, there are a number of things you need to consider. To make things easier for you, we’ve listed the dos and don’ts of the mortgage pre-approval process. Let’s get to it!

The Dos: Mortgage Pre-Approval Tips You Should Know

• Apply for Mortgage Pre-Approval: Some people think that contacting a realtor is the first step in buying a home. But in reality, the first thing you need to do is to get your mortgage pre-approved. This is because when you find a home you like, you need to move fast. Being approved removes the extra steps in the mortgage process and lets you know how much you can afford when buying a home. 

• Window Shop for Pre-Approval Rates: Just like hunting for different homes before finding the perfect one, you should do the same when dealing with mortgage rates. Proper research, comparing rates, and speaking to a mortgage agent can help you find a mortgage rate that will work for you based on your financial capabilities.

• Compile All Your Documents: There are a bunch of documents required when you apply for a mortgage pre-approval. For these reasons, it’s best to gather all your documents and keep them organized in a folder. Ensure you have all identification documents, bank statements, insurance and investment accounts, proof of assets, proof of income, and more. 

The Don’ts: Mortgage Pre-Approval Mistakes to Avoid

• Don’t Get Pre-Approved Over Your Budget: One of the biggest mistakes first-time homebuyers make is getting their pre-approval up to their maximum purchasing price. Ideally, you want to calculate how much you can afford monthly and go from there. 

• Say No to Big Purchases: Once you’ve submitted documentation to your loan officer, your financial situation should change from pre-approval until your loan’s finalization. This means you should avoid major purchases that can change your debt service ratios. 

• Hold Off from Applying for New Credit: When you’re getting your mortgage pre-approved, don’t apply for new forms of credit, such as a personal loan or credit card. Your debt level and available credit play a huge role in mortgage approval, so when this increases, it can affect your pre-approval. 

• Don’t Quit or Change Jobs: As much as possible, you want to ensure you have a steady flow of income. With that being said, avoid changes in your employment status after you’ve been pre-approved. 

The Bottom Line: Planning Ahead Promises a Worry-Free Home Buying Process

Planning can change the way your home buying process pans out. Doing proper research, speaking to a mortgage agent, and following the right steps can help you get pre-approved quicker, helping you move forward into planning your home buying process. 

How Can We Help You?

Finding and buying a home can be tricky, especially when you put your finances into the picture. Fortunately, with the help of Ottawa Mortgage Services, buying your home for the first time won’t be such a pain. 

Our expert mortgage agent in Ottawa Mortgage Services helps first-time homebuyers discover the different possibilities in home buying, get pre-approval letters, obtain assistance for refinancing, debt consolidation, and more. Looking for a mortgage? Apply online today!

Whether you’re faced with debts and expenses that you want to pay off, or you’re just looking to have some extra money to improve your day-to-day life, consider all your options. A Canadian Home Income Plan reverse mortgage, or shortly known as CHIP, may be able to help you reach your financial objectives.

A CHIP reverse mortgage is a loan secured at the cost of one’s home’s value. A borrower essentially gets tax-free money without the need to actually sell their property. The loan is paid back when the borrower chooses to do so or is no longer residing in the home associated with the deal. 

If you’re interested in getting a CHIP reverse mortgage, keep reading to learn the requirements, purpose, and benefits of applying for one. 

CHIP Reverse Mortgage Requirements in Canada 

The Chip reverse mortgage was designed for Canadian homeowners who use their home equity to get some extra cash for their expenses. A borrower can get up to 55% of their home’s value and can be split into monthly or annual payments. Borrowers can also get the money in one go. 

In order to get this mortgage loan, there are two sets of requirements to be eligible. One pertains to the home involved in the transaction, while another relates to the borrower.

The home used in the CHIP reverse mortgage should be the primary residence of the borrower. Along with that, the property value should be a minimum of $150,000. This is often determined by the location, the type of home, and its appraised value. 

Meanwhile, the borrower must be a Canadian resident who is 55 and older. If the property is owned by two people, both need to meet that age requirement to take out a CHIP Reverse Mortgage. Along with that, both are also required to stay on top of their regular property taxes and fees. 

CHIP Reverse Mortgage Purposes

The CHIP reverse mortgage was designed for a borrower to take out money while maintaining their current home. Discuss with your family and a mortgage agent moving forward to understand whether a CHIP Reverse mortgage is the best option for you.

Ideally, the money from this mortgage loan is used by retirees who want to enjoy retirement life, but it can fulfill a variety of purposes. The money can be used to cover debt, medical expenses, leisure expenses, and more. 

CHIP Reverse Mortgage Perks

Applying for a CHIP reverse mortgage goes smoothly because of the minimal requirements it asks for compared to other mortgage loans. Borrowers have the ability to keep the money from their loan and their home at the same time.

This can really help to provide a lot of financial freedom and security at an older age. Without any deductions or the need to consider payments or restrictions, a CHIP reverse mortgage can be a good source of money. 

Conclusion

CHIP reverse mortgage can be a really attractive loan to apply for. You get money from a little over half of the value of your own home to fund whatever you deem fit with seemingly few consequences. 

Need to discuss whether a CHIP reverse mortgage is good for you? Ottawa Mortgage Services can provide mortgage advice to home buyers and owners in Canada. Get a free assessment today!