Should I refinance my mortgage?

Should I refinance my mortgage?

 

 

 

   

The answer is "yes".

We should learn to make life easier by adding all the debts into one.

So if you have a mortgage and line of credit payments, car payments and credit card debts it would make sense to combine all into one. Canadians always complain we work a lot but in the end of the month, there is never enough funds to cover everything.

Some people often say that a car payment with zero percent doesn't make sense to add onto the mortgage. But I disagree. If a client is sick, they will have to make the mortgage payment and the car payment regardless. However, if they have one payment on the mortgage and things are financially tight, they can reduce the mortgage payments.

Remember, banks when they give you credit they know statistically the odds are against you. You could lose your job, get sick, go through a separation or lose your marbles.  Eventually you will have several payments and it will be difficult to pay everything off at once.

So my advice is to make things simple. Make one payment without the headaches.

Become an informed client. 

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5

Can I get a mortgage under a business name?

The short answer is yes.
Buying real estate with a corporation can protect you from personal liability and it is a great way to separate business from personal holdings.

Often these are set up to protect a consumer's personal assets in case litigation is brought against his or her business. Setting up a mortgage through a corporation can be challenging, but is not difficult.

You will Need

• Business Articles of Incorporation or Business registration
• Business financial statements
• Business account statements
• Personal and corporate tax returns
• Personal Guarantee…..meaning whoever owns the business must sign off on the mortgage.
• You must be self  employed for at least 2 years or more
• Your must put down at least 10% or more as a down payment
• You and the company must have excellent credit

Also, if you are planning to buy a rental investment property it would make financial sense to put in under a corporate company to save on the capital gains when it is time to sell in the future.

Also be an informed client.

What is mortgage fraud?

Mortgage fraud is any scheme designed to obtain a mortgage under false pretenses. It can be as simple as falsifying information in a loan application, or more sophisticated involving one or several individuals attempting to defraud a financial institution or innocent parties of money through a mortgage loan.


Not only is the dollar value of these fraudulent activities on the rise, but also the fraudsters themselves are becoming increasingly sophisticated and well organized. Impersonation often occurs when an individual applies directly to a lender, or through a mortgage broker or specialist, for a loan secured by real property where title is held either jointly by husband and wife, or by one of the spouses alone, and the loan application is submitted by one spouse or co-borrower.


In some instances the borrower may arrange to have an impostor appear as the co-borrower/ consenting spouse in order to have the mortgage executed. Often these impostors are business associates, organized criminals to whom the borrower owes money or an individual with whom the borrower is involved in a clandestine relationship.


Frequently, these impostors are able to provide some sort of identification that the borrower has managed to obtain from the unsuspecting spouse/co-borrower. Often, in cases of impersonation, lenders and brokers are instructed not to contact the borrower at home, so the risk to the borrowers of the innocent spouse learning of the mortgage before it has been funded are minimized.


The mortgage is signed by the borrower or the impostor, the funds are advanced and it may be several months before the innocent spouse or person becomes aware of the mortgage to which they did not consent or agree.


A far more sophisticated type of mortgage fraud involves identity theft. The fraudster targets an individual who owns real property of significant value, either free and clear of mortgages or with minimal secured debt. Unfortunately, the significant amount of information made readily available by the Internet and the advent of electronic record keeping by registry offices make the process of finding these individuals relatively easy.
The fraudster uses the identity of the intended victim, which purposefully matches that of a lender's ideal client, to apply for a mortgage. Using the victim's credit worthiness and land security to make the transaction enticing to the lender or broker, the fraudster receives loan approval easily.


There are many ways of preventing mortgage fraud. The first is to protect yourself from identity theft. You can also conduct a property search at your provincial land registry office to ensure that the title to your home is in your name.


We recommend clients to purchase Title Insurance to protect your home. Title Insurance can provide valuable protection against losses incurred by lenders as a result of fraud. Such insurance typically covers the following items.

• The cost of defending one's right of ownership, which can cost tens of thousands of dollars;
• The stress and uncertainty surrounding the a resolution of title-related problems;
• The time spent waiting for resolution from the Land Titles Assurance Fund; and
• The loss associated with a fraudulent mortgage that is entitled to remain registered against the true home owner's interest.

Despite this coverage, however, fraud ultimately costs every party to the transaction money whether by way of increased interest costs or administrative fees. As those who are prepared to engage in fraudulent activities become more bold and sophisticated and are linked more often to rings of organized criminals, it is incumbent on the lending community to do everything in its power to address this challenge.

Quando é melhor alugar ou comprar um imóvel?

Essa é a dúvida de muita gente que vive em Toronto e a resposta vai depender basicamente do seu histórico de crédito, da sua renda mensal e de quanto tempo você vai ficar na cidade. O OiToronto conversou com diversos especialistas no assunto e ajuda você a escolher a melhor alternativa.

O valor da hipoteca será, provavelmente, o mesmo do aluguel.

Quando se trata de orçamento familiar, moradia é uma das prioridades, junto com educação para os filhos, saúde e alimentação. Apesar de Toronto ser considerada  uma das dez cidades mais caras do mundo para se viver, investir em um imóvel pode ser um bom negócio em muitos casos.

Quando é melhor alugar

A vantagem em alugar um imóvel vai depender, dentre outras coisas, de quanto tempo a pessoa pretende ficar no país. “Existem várias pessoas que preferem alugar porque saem do país com frequência. Eles preferem não lidar com os custos do dia a dia de um imóvel”, afirma Eduarda Pita, proprietária da Mortgage Alliance.

É o caso do promotor de eventos Anderson Brandão, que veio a Toronto para estudar inglês. No início, morou com uma família em um homestay, mas logo decidiu que alugar um apartamento seria a melhor alternativa. Terminou optando por um bachelor (quitinete) no centro da cidade. “Eu estou investindo nos meus estudos no momento e não sei se quero ficar aqui para sempre. Por isso, acho que comprar um apartamento não seria um bom investimento”, diz ele.

Já o diretor de consultoria em telefonia Rafael Etges, que imigrou para o Canadá em 2004 com a esposa, optou por morar de aluguel até conseguir uma estabilidade financeira no país. “Muita gente decide comprar um imóvel logo quando chega ao Canadá e termina se endividando”, afirma Rafael, que hoje já possui casa própria. “Às vezes é melhor morar de aluguel e investir o dinheiro que sobra em outras coisas, como aposentadoria privada, por exemplo. É bom lembrar que ter uma casa própria exige despesa com luz, água e outras taxas”, alerta.

O engenheiro de software Henrique Furtado comprou uma casa há quatro anos e afirma que ficou tão decepcionado com tantos gastos extras, que acredita que a compra do imóvel não foi um bom investimento. “Quem tem casa própria passa a gastar com uma série de coisas que o inquilino não precisa, como cuidar do jardim, por exemplo. Eu sabia disso antes de comprar a minha, mas confesso que as despesas estão sendo maiores do que eu imaginei”, relata ele. “O sonho da casa própria é mais uma despesa na sua vida. Se voltasse atrás eu teria mais cuidado com os custos”.

“Se a sua situação não é das melhores, alugue. Se você não tem renda suficiente para comprar ou mesmo para ter um fiador, alugue até que a situação melhore”, ressalta Eduarda Pita. “Algumas pessoas moram no Canadá durante 20 anos, se aposentam e não compram imóvel. Às vezes não há vantagem nenhuma em comprar um imóvel se a renda não é suficiente para pagar a conta de luz, taxas de propriedade e a calefação”, alerta.

E tem mais: com o passar do tempo, algumas residências apresentam vazamento e rachaduras, e quando isso acontece, leva vantagem quem mora de aluguel, pois geralmente a empresa ou pessoa física responsável pela manutenção do imóvel conserta o defeito sem que o inquilino tenha nenhum custo.

Quando é melhor comprar

Segundo os especialistas ouvidos pelo OiToronto, comprar um imóvel é mais vantajoso para quem reside na cidade permanentemente. “O valor da hipoteca (mortgage) será provavelmente o mesmo do aluguel”, diz a corretora de imóveis Rosa da Silva. “No entanto, para comprar um imóvel financiado é preciso ter dinheiro para dar de entrada, no mínimo 5% (se for o seu primeiro imóvel), além disso também é fundamental ter um bom histórico de crédito no Canadá (que prova que a pessoa paga as contas em dia) e um emprego”.

Depois de considerar todos esses aspectos, a psicóloga Lívia Moreira, que alugava um apartamento de dois quartos no centro da cidade, decidiu se livrar do aluguel. Quando o imóvel que ela alugava foi posto à venda, Lívia chegou à conclusão de que seria mais vantajoso comprar um apartamento de um quarto no mesmo prédio em que morava. “Hoje eu pago de hipoteca menos do que eu pagava de aluguel”, diz ela. “Além disso, se um dia eu quiser vender o apartamento, o dinheiro volta para mim. Quando eu alugava, pagava a hipoteca do dono do apartamento”, avalia.

A importância do histórico de crédito

A fisioterapeuta Valéria Shepperman imigrou para o Canadá com o marido em 2002 e já estava decidida a ficar de vez no país. “Por isso, para nós, comprar um apartamento seria a melhor opção. Nunca gostei de morar de aluguel”, afirma ela.

Mas na primeira tentativa de compra, o casal não teve sucesso porque, como eram recém-chegados, ainda não tinham construído um histórico de crédito no país. “Apesar de termos um bom dinheiro para dar de entrada, pois economizamos durante anos antes mesmo de virmos para o Canadá, o fato de não existir nenhuma informação sobre o nosso crédito no país foi um grande obstáculo. Só depois de um ano morando em Toronto, conseguimos dar entrada em um apartamento”, relembra Valéria.

Ter um bom histórico de crédito é fundamental também na hora de alugar um imóvel. Um estudante sergipano ouvido pelo OiToronto e que prefere não ter o nome divulgado, passou meses sem pagar o cartão de crédito e depois teve que encarar duras consequências. “Eu achei que aqui era como no Brasil, ou seja, assim que você quita a dívida do seu cartão, o seu nome fica limpo”, diz ele. “Eu só descobri o quanto isso era sério quando tentei alugar um apartamento. Mesmo depois de ter pago a dívida do meu cartão e apesar de ter um bom salário, eu não consegui alugar o imóvel porque o meu histórico de crédito ficou ‘manchado’”, lamenta o rapaz, que terminou alugando um porão, cujo proprietário não verificou o seu crédito.

“Algumas pessoas têm preguiça ou simplesmente acham que se pagarem a conta no mês seguinte, isso não vai prejudicar o seu crédito, mas não é verdade”, ressalta Eduarda Pita. “Mas a honestidade é tão importante quanto um bom crédito na praça. Na hora de alugar um imóvel, é importante explicar para o proprietário as circunstâncias de um mau crédito”, aconselha.

Faça as contas

Antes de alugar ou comprar um imóvel, é importante considerar o valor da sua renda mensal, aconselham os especialistas no assunto. “A primeira coisa que o consumidor deve fazer é uma pré-qualificação junto ao banco para saber qual o valor máximo do imóvel que ele pode comprar”, explica a corretora de hipotecas da Mortgage Alliance Flávia Cardoso.

O preço dos imóveis varia de acordo com a localização. Quanto mais perto do centro da cidade, mais caro será, e a regra se aplica tanto para a compra quanto para o aluguel. Imóveis em bom estado de conservação e que ficam perto de escolas, supermercados, farmácias e estações de ônibus ou metrô, também são mais valorizados.

Mercado valorizado

Para quem tem interesse em comprar um imóvel em Toronto, tudo indica que esta é uma boa fase, pois o mercado está em alta. “Os imóveis em Toronto valorizam de 3% a 5% ao ano. Há 25 anos você achava casas em Toronto por 100 mil dólares ou até menos. Hoje, o menor preço de uma casa é 300 mil dólares”, afirma a agente imobiliária Cíntia de Souza. “É possível  ter um bom lucro se souber a época certa de compra e venda do imóvel”.

O OiToronto quer saber a sua opinião. Fale da sua experiência. O que é melhor para você: alugar ou comprar um imóvel?

Courtesy of http://www.oitoronto.ca/13558/quando-e-melhor-alugar-ou-comprar-um-imovel/

For more information please call Eduarda "Eddie" Pita at 416-920-9931

We helped ING customer get a $7,300 refund

By Ellen Roseman

Ellen Roseman helped an ING customer get a $7,300 refund.

Grace Modesto had a bad experience with ING Direct when separating from her husband and selling the family home. Luckily, the bank listened and reversed its decision.

She was told she could take out another mortgage within 120 days and not have to pay a penalty. So, after buying a condominium with her mother, she took out a new mortgage with ING.

The $7,300 penalty she had paid was supposed to be reimbursed when the deal was done. But later, she learned she wouldn’t get a refund after all.

“I now have a variable rate mortgage at 2.25 per cent,” she said. “To get reimbursed, I’d have to get a fixed rate mortgage as I had before, whose rate is now at 4.5 per cent.”

“I was misled. I wasn’t properly informed. Had I known, I would have accepted offers I had from other financial institutions.”

I sent her email to ING’s chief executive, Peter Aceto, at 7.30 p.m. one weeknight. He got back to me by 9 p.m., saying he was on the case.

Two days later, Modesto was told she’d get back her $7,300 penalty payment. ING had listened to the phone calls and realized it had made mistakes in communicating with her.

In particular, the key message about sticking with a fixed rate mortgage wasn’t made clear to either Modesto or her mortgage broker.

I like the bank’s decision to rely on both written and verbal disclosure. Many people don't read the mortgage contract. And even if they do, they may find the terms unclear and hard to understand.

Complaints about mortgage penalties are less frequent than they were a few years ago when interest rates plunged. I’m still waiting for Finance Minister Jim Flaherty to make lenders standardize their calculations.

You can find mortgage penalty calculators online, such as this one at Rate Supermarket and this one at Canadian Mortgage Trends. But they’re only a rough guide.

If you're breaking a closed mortgage befoie maturity, it’s important to ask your lender to include your mortgage prepayment privileges in the payout amount.

“Some lenders use the prepayment privileges in the calculations when fully paying out the mortgage and some don’t,” says mortgage broker Shayne Slinn.

“I am not aware of any lenders that automatically include the prepayment privilege when calculating the penalty. The lawyer, title insurance company or notary ordering the payment statement must ask specifically for it.”

Suppose, for example, you have a $300,000 balance on your mortgage and a $5,000 penalty to get out early. You have not yet used your 20 per cent annual prepayment privilege. So, the penalty will be reduced by 20 per cent, resulting in a $1,000 reduction.

“Clients get misinformation about using the prepayment privilege when they contact their lender for a payout amount,” Slinn says.

He’s seen cases where a borrower’s prepayment is not included in the payout amount if it’s made within the previous 30 days.

Remember that you won’t have to borrow any money to use your prepayment privileges. They just become part of the calculation.

Breaking up is hard to do if you have a closed mortgage. Here’s my advice:

Consult an expert who doesn’t work for your lender, such as a mortgage broker or lawyer.

Ask questions about using your prepayment privileges and staying with the same lender to reduce the penalty cost.

Finally, if you’re misinformed, ask for relief after the transaction closes. Banks look at verbal disclosure and often try to help if you didn’t get the right message.

Article courtesy of: 

http://www.moneyville.ca/blog/post/1064750--how-i-helped-get-a-refund-of-a-7-300-mortgage-penalty

For all your mortgage needs call: Eduarda (Eddie) Pita - 416-920-9931

Visit us online at www.eddiemac.ca

Four tips to ensure you can deduct interest on your debt

Ms. Sherle owned a principal residence and a rental property. She owned her residence free and clear without any debt secured by the property. She had taken out a mortgage to purchase the rental property and was able to deduct her interest on that mortgage since the property earned rental income. That is, she directly used the mortgage proceeds for the purpose of earning income, so the taxman allowed the deduction for her interest costs. She then swapped the properties so that her principal residence became a rental and her rental became her principal residence.

Ms. Sherle still wanted to own her residence (the former rental) free and clear of debt, so she borrowed funds against the new rental property (her former home) and used the proceeds to pay off the debt on her new residence (the former rental). Follow me? CRA then denied Ms. Sherle her interest deduction going forward. They went to court over the issue, and CRA won the battle in court.

The ideas

I mentioned last week that your intention or purpose for borrowing money is irrelevant when it comes to deducting interest. Further, the assets you pledge as security for the debt are also irrelevant. All that matters is direct use of the borrowed money. So, what could Ms. Sherle have done differently to enable a deduction for her interest? More importantly, what can you do today to ensure that you’re entitled to deduct interest on your debt? Here are a few ideas:

1. Sale to a friend: Ms. Sherle could have sold her principal residence to an accommodating party – say, a friend or relative – in exchange for a promissory note. She could have then borrowed money from the bank to repurchase that property from her friend or relative. Her friend or relative could have then used the cash to repay the promissory note owing to Ms. Sherle. If Ms. Sherle then used the property to earn rental income (as she did), then she would have been able to deduct the interest on the new debt.

2. Sale on the open market: Suppose you have non-deductible interest on some debt. If you have other cash or marketable securities available, consider taking that cash or selling those securities for cash, using the cash to pay down your non-deductible debt, and then borrowing to invest in new assets (perhaps replace those same securities you just sold) with a purpose of producing income. Presto, you should be able to deduct your interest costs now. Just be sure to count the tax cost associated with selling any marketable securities beforehand. If you don’t like the tax hit you’re going to face when selling those securities, consider the next idea instead.

3. Transfer to a corporation: Suppose you have non-deductible interest on some debt and you have other assets, perhaps marketable securities available. Consider transferring those assets to a corporation (even if these assets have appreciated in value there should be no tax to pay if you make an election under Section 85 of the Income Tax Act when making the transfer; see a tax pro). In exchange, take back a promissory note for the cost amount (that is, the adjusted cost base) of the assets transferred (the promissory note cannot be for more than the cost of those assets, otherwise you could trigger some tax). Then, borrow funds from the bank to subscribe for more shares in your corporation. The corporation can use the new cash to pay off all or part of the note owing to you. You can then use the cash to pay down your non-deductible debt. You should now be able deduct the interest on the new debt since the proceeds are used to invest in shares of your company.

4. Take out paid-up capital: Once again, suppose you have non-deductible debt. Suppose you also own shares in a private corporation and you have “paid up capital” in those shares (generally, you’ll have paid-up capital in shares to the extent you have subscribed for those shares using cash). Your corporation can then make a tax-free return of all or some of that paid-up capital to you (see a tax pro for different ways to do this). You can then use that cash to pay down your non-deductible debt. Finally, you can then borrow funds to reinvest in more shares of the corporation, or to lend money to the corporation (even at zero interest; CRA’s Interpretation Bulletin IT-533 confirms that interest will generally be deductible in this case).

Variable Rate vs Fixed Rate – What should I take?

The question mortgage consumers are asking is: Should I go Variable Rate or Fixed rate?

The answer is: Depends!

Variable rate is based on the Bank Prime. As the Central Bank Rate increases or decreases, so does the variable rate.

The fixed rate is based on the bond market. As the bond market increases or decreases so does the fixed rate.

The decision of whether to go variable or fixed will depend on the consumers’ tolerance for risk as well as their ability to withstand increases in mortgage payments.

The worrywart, who is constantly looking at interest rates and can’t sleep at night wondering if it is time to lock in, should go with a fixed mortgage rate. The seasoned veteran who has plenty of equity in their home or has little time left on their mortgage, can afford to go variable rate and take the risk.

Most first time homebuyers with minimal down payment tend to go fixed. Over time however, the variable mortgage has always been proven to be better than fixed.

Something to keep in mind is that variable rate mortgages allow consumers to lock in to a fixed rate at any time without costs.

Generally, most economists are stating that the Central Bank will remain steady for the next few months and perhaps will only start to move upwards in early 2012.

So know your options and be an informed client 

For all your mortgage needs call: Eduarda (Eddie) Pita - 416-920-9931

Visit us online at www.eddiemac.ca