Purchase / Refinance plus Improvements

Purchase/Refinance plus Improvements transactions allow the purchasers to finance the costs of immediate renovations or improvements through the Mortgage Loan.

Conventional Deals:

• Appraisal will be required. The report should show both values- the current value of the property and the value after the renovations are complete
• Quotes must be obtained and reviewed outlining the work to be done, the cost of improvements and the expected completion date
• Work must normally be completed within 90-120 days
• An updated Inspection report is required confirming all work has been completed in a satisfactory manner
• An amount equivalent to the cost of improvements must be held back at the time of funding ( Doc Tracking item “ Holdback” under a Funding condition)
• The holdback is not released until ALL work is completed and inspection reports/confirmation are received.
  
  

CMHC / Genworth Insured Deals:

• An Appraisal is not required ( Please note that Genworth may proceed to order their own Appraisal to verify property value)
• Quotes must be obtained and reviewed outlining the work to be done, the cost of improvements and the expected completion date
• Work must normally be completed within 90-120 days
• An amount equivalent to the cost of improvements must be held back at the time of funding
• The holdback is not released until ALL work is completed. Documentation required includes a letter from the clients confirming the renovations/improvements have been completed and receipts showing invoices have been paid and/or an Inspection report confirming renovations have been done are acceptable
• CMHC will insure these types of Transactions where the Improvement costs are less than or equal to 10% of the As – Improved value of the property (ie. Purchase Price + Cost of Improvements). Any amount above the 10% will be considered under a Progress Advance program.
• Genworth will insure deals that don’t exceed 20% of the initial Purchase Price or maximum $40,000.00 as a single advance
  

Items to Be Obtained

• Listing- Property must be an “A” property that requires only cosmetic renovations and not a property that needs to be gutted and totally renovated. (Any properties with require substantial or total renovations should be done under a Progress Advance program
• Agreement of Purchase and Sale (indicates original Purchase Price)
• Quotes- We’ll review the quotes to ensure that major renovations are not being carried out. Any quote over $20,000.00 will be reviewed very carefully.
• Appraisal (conventional deals) confirming the Market Value of the property now and after the renovations are complete
  

We’ll use our judgment on the amount of confirmation that is required to release funds… if it is only a furnace that is being replaced, an appraisal would be unnecessary and a letter and a receipted invoice would be sufficient.

However, if renovations are substantial and especially in the case of structural renovations, an inspection report would be required to ensure the renovations have been completed in a workmanlike manner and the value as stated is noted in the property.

Please also note that if the work is not done by a contractor, the borrower is still required to submit paid receipts indicating that the supplies have been paid for. The receipts should relate to the items the clients have indicated are to be replaced.

Technically, if the repairs are not complete within the 120 days, the holdback will be applied to the mortgage amount outstanding. However, if there is a reasonable explanation, a request for an extension can be escalated.

Click here to apply online for your home purchase / refinance plus improvements mortgage.

Joe Malek, Mortgage Agent M08004649
www.joemalek.com

First-time Homebuyer Heaven

There has never been a better market in which to be a first-time home buyer.

The rising tide of foreclosures has pushed down home prices significantly over the past 18 months.

Homes, relative to income, are about at the historic norm, which means they’re more affordable than they’ve been in at least a decade.

Beyond that, if you buy a foreclosed property, you might wind up with spending even less.

Spending less to finance a property means you can buy more for your money or buy less and save more for retirement or other purposes.

With interest rates so low, and the price of homes falling, homeownership becomes affordable to many first-time home buyers.

When it comes to hiring a real estate agent, sales are so slow that even the best agents aren’t that busy.

That means you shouldn’t feel rushed or pushed into making decision.

Your agent should have time to really help you understand what you want to buy, and help you secure an excellent deal on a property.

While the housing crisis continues to play out, some first-time buyers are finding a wide-open road leading to the house of their dreams.

If you want to make sure the house you buy this year is a smart financial move, follow these quick tips:

1) Get pre-approved for your loan before looking for a house. If you get pre-approved, that means the lender has to pull a copy of your credit report, you have to apply for the loan, and the lender has to approve your application.

Once you know what you can spend, find the right neighborhood for the next 7 to 10 years. If you plan to stay in your home for at least 7 to 10 years, you’ll be able to ride out almost any downturn in the market.

That’s important because it’ll cost you around 10 percent of the sales price to sell that home. Over 7 to 10 years, you’ve got a good chance of at least breaking even on the sale, plus you’ll have build up a decent amount of equity by paying down your mortgage each month.

2) Don’t go for flash – buy what you need. You can always add granite countertops to a kitchen. It’s a lot harder to buy the size house you need in your school district of choice.
So, buy something a little faded and dated and upgrade over time as your budget allows.

3) Make sure you have cash in reserve. Houses always need something, so when you’re calculating your budget, make sure you allow some extra cash for upkeep and maintenance.

Visit http://www.joemalek.com to get pre-approved today!

Joe Malek, Mortgage Agent #M08004649

GNW made it even harder to borrow

Effective April 18, 2009, changes have been made to eligibility requirements for GENWORTH Financial Canada (GNW) insured mortgage applications.

All GNW insured mortgage applications:
New GDSR limit of 35% will now apply for all Beacon Scores (previously 35% for Beacon Scores less than 680 and N/A for Beacon Scores 680 and above)
New TDSR limit of 42% will now apply for all Beacon Scores (previously 42% for Beacon Scores less than 680 and 44% for Beacon Scores 680 and above)

The following Beacon Scores are required for GNW insured refinances:
85.01% - 90% LVR: Minimum Beacon Score of 660 (previously 600)
90.01% - 95% LVR: Minimum Beacon Score of 700 (previously 650)

GNW Mortgage for Self-Employed Program:
Purchases transactions only available up to 90% LVR (previously 95%)
Purchases and refinance transactions from 80.01% to 85% LVR: Minimum Beacon Score of 680 (previously 621)
Purchases transactions from 85.01% to 90% LVR: Minimum Beacon Score of 680 (previously 621)

GNW insured Rental Property Financing Program applications:
Non-owner-occupied rentals are no longer available for GNW insured financing (includes 1-4 unit rental properties and non-personal residential mortgages)

GNW insured high-rise condominium properties (4+ floors) residential mortgage applications, the following Beacon Scores are required:
85.01% - 90% LVR: Minimum Beacon Score of 660 (previously no minimum)
90.01% - 95% LVR: Minimum Beacon Score of 700 (previously no minimum)

The above changes apply only to GNW insured products and not to CMHC Insured products but who knows how long before they start making changes too...

This is yet another reason for you to apply for your mortgage right now… before it’s too late.

Visit my website http://www.joemalek.com/ where you can apply online or by fax but don’t procrastinate – GET STARTED TODAY!

Joe Malek, Mortgage Agent #M08004649

Rates Are Down Again!

Today’s best rates...

4.90% = 6 month
3.20% = 1 year
3.69% = 2 year
3.64% = 3 year
4.09% = 4 year
3.85% = 5 year
5.30% = 6 year
5.15% = 7 year
5.25% = 10 year
3.30% = Variable

Call me today at 1-888-444-4198 for more information on mortgage rates, or to find out how you can get the financing package that meets your individual needs simply apply online at http://www.joemalek.com/

OAC. Certain conditions may apply. Rates are subject to borrower and property qualification. Posted rate is the rate offered by the majority of Canadian financial institutions. Rates may vary and are subject to change without notice.

Thank you

Joe Malek Mortgage Agent #M08004649

The data deficit in real estate

From Monday's Globe and Mail
April 6, 2009 at 12:00 AM EDT

Transparency would be an asset of great value to Canada as the country faces perplexing policy issues on home ownership and mortgage lending in the current recession.

As things stand, however, the severity of the problems in question is largely a matter of anecdote and guesswork.

If financial institutions and other housing market participants supplied data to Statistics Canada, these issues could be lucidly discussed and resolved.

Canadians may congratulate themselves on a less troubled real estate market than that in the United States, but how much less troubled is unknown. The world economic crisis was triggered by inflated housing prices in the United States, but Canada and other countries had a housing bubble, too.

The number of subprime Canadian mortgage borrowers, for example, remains a mystery, as is the number of people who have lost their homes by power of sale and foreclosure; in the U.S., the equivalent figure is a matter of clear public record on a continuing basis.

Because of the credit crunch, some significant number of Canadians who are successfully meeting their mortgage payments, though their credit ratings show relatively high risk, are in danger of losing their homes when their mortgages come up for renewal.

The lenders that accepted their mortgage applications in the first place would have to advance new cash, because they sold or “securitized” the original mortgage debts.

Some of these non-bank lenders will now be unable to fund what amounts to a new loan, under present economic conditions.

Moreover, the value of the security – the homes – has fallen.

From $3-billion to $5-billion in mortgages and as many as 25,000 borrowers may be affected, but these are only estimates.

Similarly, the question of whether mortgage-loan insurers should compete on a level playing field with respect to the federal government's complex guarantees in favour of insured mortgage lenders is obscured by the lack of information on its implications.

Currently, the insurance policies issued by Canada Mortgage and Housing Corp., a Crown corporation, are 100-per-cent guaranteed, while the policies of private insurers, now principally Genworth Financial Inc., are 90-per-cent covered.

In July, the federal government wisely cracked down on mortgages with no down payments and long, 40-year amortization periods. But, again, the effects of the risky mortgages previously backed are unknown.

The government is rightly trying to keep credit flowing, in housing as in other sectors. It would greatly help if the size of the problem could be discerned.

Tax Cuts for Homeowners

The Government of Canada has proposed new tax cuts that may benefit you.

If you are a first-time home buyer, or are thinking about renovating your home or making it more energy-efficient… Canada’s Economic Action Plan has tax cuts for you.

The Home Renovation Tax Credit means savings of up to $1,350 on renovations completed before next February.

The First-Time Home Buyers’ Tax Credit means savings of up to $750 on the closing costs of a first home.

The ecoENERGY Home-Retrofit Grant provides up to $5,000 to make your home more energy-efficient.

For more information please visit www.actionplan.gc.ca or call 1-800-O-Canada.

To apply for your next mortgage please go to my website www.joemalek.com

Thank you

Joe Malek
Mortgage Agent
M08004649

5 year fixed rate at 3.85%

This is not April Fools joke!

My today’s best rate for 5 year fixed is 3.85%!!!

If you are paying your bills on time and would like to refinance your mortgage then you may be able to take advantage of this excellent 5 year fixed rate which is available on high ratio mortgages to 95% of your appraised home value.

Yes, I said appraised home value…

We are in a declining real estate market where your property is worth less today then it was last month and this is why both GENWORTH and CMHC are having very hard time supporting client estimated property values.

Both of these mortgage insurers are now requesting appraisals on almost every deal.

It really doesn’t matter who the lender is… if you want to refinance then you may have to pay about $250.00 to get your property appraised.

This fee is usually paid directly to the appraiser at the time of their inspection but you can also put it on your plastic for now and then pay it off using cash from the new mortgage proceeds.

Act now, this is a quick close special meaning your mortgage must fund within 30 days from your application.

Just go back to my website http://www.joemalek.com/ where you can apply online over my secure server and I’ll get back to you very fast.

Don’t procrastinate, because next moth your property value could be even lower!

Joe Malek
Mortgage Agent #M08004649