Published by DLC Marketing Team
October 25, 2022
What to Know about Porting Your Mortgage.
When it comes to getting a mortgage, one of the more overlooked elements is the option to be able to port the loan down the line.

Porting your mortgage is an option within your mortgage agreement, which enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. Thereby allowing you to move or ‘port’ your mortgage over to the new home. Plus, the ability to port also saves you money by avoiding early discharge penalties should you move partway through your term.

Typically, portability options are offered on fixed-rate mortgages. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate. When it comes to variable-rate mortgages, you may not have the same option. However, when breaking a variable-rate mortgage, you would only be faced with a three-month interest penalty charge. While this can range up to $4,000, it is much lower than the average penalty to break a fixed mortgage. In addition, there are cases where you can be reimbursed the fee with your new mortgage.

If you already have the existing option to port your mortgage, or are considering it for your next mortgage cycle, there are a few considerations to keep in mind:

Timeframe: Some portability options require the sale and purchase to occur on the same day. Other lenders offer a week to do this, some a month, and others up to three months.
Terms: Keep in mind, some lenders don’t allow a changed term or might force you into a longer term as part of agreeing to port you mortgage.
Penalty Reimbursements: Some lenders may reimburse your entire penalty, whether you are a fixed or variable borrower, if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand-new term of your choice and start fresh. Keep in mind, there can be cases where it’s better to pay a penalty at the time of selling and get into a new term at a brand-new rate that could save back your penalty over the course of the new term.
To get all the details about mortgage portability and find out if you have this option (or the potential penalties if you don’t), contact me today for expert advice and a helping hand throughout your mortgage journey!

Published by DLC Marketing Team
August 18, 2022
4 Methods to Melt Your Financial Stress.
If you lost your job tomorrow, would there be a list in your head right away of things you could do to hang on or would you just be at a complete loss?

Financial knowledge will allow you to better assess your options and create a plan without getting overwhelmed. However, even with the best laid plans and all the financial literacy in the world, it’s impossible to completely eliminate financial stress — so how do you cope?

1. Have a clear picture of your financial situation.
Do you know your average monthly spend? Do you know how much you owe, the interest rate on your debts, and how much you pay each month in interest charges? Have you ever tracked and categorized your expenses to identify areas (car? dining out? home improvement?) where you could cut back if required?

Avoiding these questions is understandable because the answers may lead to some hard lifestyle choices but turning a blind eye to your real situation will only lead to never-ending financial stress. You need to clarify your situation, collect and analyze your data, and then start creating a plan of attack.

2. Accept your mistakes.
Move on from any emotional reaction and learn to live with any poor financial decisions from your past. Regret and anger won’t make that beach vacation you took on your credit card disappear! That beach vacation is long gone, just focus on your plan to channel more money towards paying for it!

If you need to pass on a night out with the gang because you want to put that $75 towards your card, then just come out and tell them. More than 50% of Canadians live paycheque-to-paycheque, so you won’t be surprising anybody!

3. Set small, achievable financials goals to bolster confidence and measure progress.
If you have credit card debt, try adding $100 to your monthly minimum credit card payment. If you have no credit card debt, open a TFSA and contribute a $100 a month. A hundred bucks might seem like a modest amount, but it is a realistic goal that will get you started and will help a lot more than you think.

Did you know that a $100 monthly deposit into your TFSA ($1200 year) from age 18 to 65 with will grow to almost $400K based on historical stock market returns?

Adding $100 monthly to the minimum 3% payment on a $5K credit card debt will cut the time required to pay off the balance from 251 months down to 38 months and save you $4500 in interest charges!

4. Get inspired and stay motivated.
Follow a personal finance YouTuber or blogger that you really connect with, hang a goal chart or progress tracker on the wall, talk with a friend or relative who has the same issues and work together — there are lots of methods and resources available to help you, even with a limited budget. It’s critical to maintain a positive attitude and don’t beat yourself up — there are plenty of others in the same boat!

The ultimate goal is to completely eliminate financial stress by building passive income, so you don’t have to go to work everyday to pay the bills. Achieving this goal will take time and there is bound to be some stress along the way. Learn to cope and stay focused on your goals.

For powerful personal finance education and training with immediate results, check out the complimentary livestreams each week from Enriched Academy. View the schedule and sign up for upcoming sessions on their events page.

Published by DLC Marketing Team
August 16, 2022

When it comes to shopping for a mortgage, it is important to know what you need to qualify – but it is just as important to understand some of the reasons why you DON’T qualify so that you can make some changes and budget accordingly for when the time is right.

If you are in the market for a home, make sure you know the 5 major reasons you may not qualify for a mortgage:

1. Too Much Debt

One of the biggest reasons that individuals fail to qualify for a mortgage is that they are carrying too much debt already. This debt can be in the form of credit cards, lines of credit or other loans. Regardless of where the debt comes from, it all contributes to your Total Debt Servicing ratio (TDS), which is one of the qualifiers for a mortgage loan. The goal is for your monthly debt payments to NOT exceed 40% of your gross monthly income.

PRO TIP: Find ways to lessen your expenses, budget or consolidate debt where possible.

2. Credit History

Another indicator of not qualifying for a mortgage can be your credit history. It is always important to pull your credit score before you start house hunting so that you can understand what your credit rating is to help determine what you qualify for. Your credit score is a direct reflection of your potential risk and, if you have a poor credit history then it makes it harder to secure a mortgage loan.

PRO TIP: To improve your credit score, be sure to avoid late or missed payments, exceeding your credit card limit or applying for multiple new credit cards.

3. Insufficient Assets or Income

With rising housing prices and stagnant income levels, one roadblock for mortgage approval can be lacking sufficient income or assets to put against your loan. For some buyers, the only option is to save up more money for your down payment to reduce the overall mortgage or look at suite income or alternative lenders.

4. Not Enough Down Payment

Another reason you may not qualify for a mortgage could be that you do not have enough of a down payment. In Canada, a 20% down payment is required to avoid mortgage default insurance BUT you can still purchase a home with less than 20%; you simply need to account for the insurance premiums, which are calculated as a percentage of the loan and is based on the size of your down payment.

5. Inadequate Employment History

Lastly, employment history can have a big impact on mortgage approval. Most lenders prefer a 2-year consistent employment history. If you do not have an adequate employment history, have been at your job for a short time or do not have a record of long-term positions, you might find it harder to get a mortgage loan.

Whether you’re looking to get your first mortgage, are ready to move or are simply shopping around, understanding what can impact your mortgage application will help ensure you have greater success!

If you are struggling currently with your mortgage approval or have recently been denied – that’s okay! Don’t be deterred. With a little effort and patience, as well as the support of your trusted Dominion Lending Centres mortgage expert, you will be able to put yourself in a better position to reapply in the future! If you’re ready, contact one of our experts today to discuss your options.