mortgage terms you need to know 101
DESCRIPTION
So what are the terms you need to know? We go over High Ratio Mortgage to Debt Calculation Ratios and everything in between.TRANSCRIPT
presents
TERMS YOU NEED TO KNOW - 101
TRANSLATING MORTGAGE INDUSTRY TERMS INTO EVERY DAY LANGUAGE
A little about Geoff Lee…
√ Co founder and Director of the Imani Orphan Care Foundation – www.imaniorphancare.com
√ Over 22 years of real estate experience and investment
√ Ranked amongst the top 3% mortgage brokers in Canada by CMP magazine
√ Finalist in 2014 CMP Canadian Mortgage Awards for Best Customer
Service from an independent office
LET’S RECAP…
CREDIT 101
• What a credit score is…
• All you really need is 680 – 800 to get the best mortgage rate…
• How the credit score is calculated…
• How to fix your credit problems…
MORTGAGE QUALIFICATION 101
• How to qualify for a mortgage either self-employed or employed…
• Stated Income…
• Gross Debt Service Ratio and Total Debt Service Ratio
• Mortgage Insurance
GIVE IT TO ME IN ENGLISH PLEASE!
So what are the terms you need to know???• High Ratio Mortgage
• You are putting less than 20% down
• Requires mortgage insurance
• Conventional Mortgage• You are putting more than 20% down
• Generally does not require mortgage insurance
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• Subject Property• What you are buying
• Non Subject Property• Other properties that you own
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• LOAN to VALUE (LTV)• What you owe on your “loan” to what to what the property is valued at
• SECURED and UNSECURED Lines of Credit• Secured
• “Tied” to something you own – collateral
• Unsecured
• Not “Tied” to anything – no collateral
•
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• Amortization• The length of time it takes to pay off your mortgage
• Affects your monthly payment at times much more than the rate
• Fixed term mortgage• Locked in for a “fixed term” you have chosen
• 1 -1 0 years
• Penalty if you break the “fixed term”
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• Variable Rate Mortgage (VRM)• Can be Open
• No penalty if you break
• Can be FIXED TERM
• Penalty if you break.
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• FLEXDOWN• Using untraditional sources for your down payment
• Borrowing from
• Employer
• Credit Cards
• Unsecured Lines of Credit
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• STATED INCOME – self employed (BFS)• What you report as income to Canada Revenue Service vs what you “STATE” your income to be to
the Lender.
• REFINANCING• To take the money that you owe and take out a new loan to pay off.
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• RENTALS• ADDBACK (subject and non subject properties)
• To take a % of the rental income from investment properties and ADD it BACK to your income
• OFF SETS
• Reduces the rental expense add balance back to Gross Income
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• NET RENTS (non subject properties)• Taking the 2 year reporting average from your T1 Generals (Statement of Rental Activities)
• Determine if there is a surplus/loss
• Input that surplus/loss into the application
• Do not include any NON SUBJECT properties debt into the file
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• DEBT CALCULATION RATIOS (DCR) (subject and non subject properties)• Calculate the NON SUBJECT and SUBJECT property debt
• Determine if there is a surplus/loss
• Input that surplus/loss into your application
• Do not include NON SUBJECT and SUBJECT properties debt into the application
“The ONLY thing constant in life is change…”
Anonymous
“Lasting Quote….”
Get in touch with us….
www.geoffleemortgage.comTwitter: @geoffleecaLinked In: http://ca.linkedin.com/in/geoffleemortgage/Email: [email protected]: 1.778.552.3489
Thanks so much for attending the GLM Mortgage Group workshop – MORTGAGE QUALIFICATIOM 101.
If you have any questions please call me at 778.552.3489 or email me at [email protected].
“We specialize in getting you the fastest “YES” at the SHARPEST RATE… GUARANTEED!”
- Geoff Lee