Lesley Wagstaff - For Real Estate and Mortgages

Well almost no money down. As a Mortgage Broker with Dominion Lending, I am currently have available with one of the Big Canadian Banks a program that you can use to buy a house with just a couple of thousand dollars.

Here is how it works: We will use an example of $400,000.00 purchase.

Right now you can buy with 5% Down, so your Mortgage would be $380,000.00 (Plus insurance premiums). The bank will give you 5% of the $380,000.00 or $19,000.00. So you would have to come up with $1000.00 for a down payment and closing cost of about $2000.00. If you are not a first time home buyer you will still have to pay the property purchase tax. (1% on first $200,000.00, 2% on balance).

The way this is done is that you pay the posted interest rate. So if you were doing it today, October 2, 2010 your interest rate would be 5.39%.

It really is a great program. You have to have good credit, a steady income, and the money to cover the extra costs and I can pre-qualify you no problem. It works for some people and not for others.

Let's set up an appointment to see if you qualify.

If you already have a realtor, I can work with them too. Just let me know

I heard the most amazing story today, I really felt I had to past this information to the general public. I was having a conversation with a lady and I mentioned that I was a Mortgage Broker. She immediately asked me for some cards and said she had some friends she wanted to give them to right away. Then she told me the story about her friend.

Her friend had found a house that he wanted to buy, he did not have a mortgage broker, so he went on-line and picked one. He proceeded to give this Broker all of the information needed to make a purchase. The Broker called a couple of days later and said he was all approved. The man went back to his realtor and wrote an offer thankfully, "Subject to Financing". He took the offer to the Mortgage Broker and the broker said, "No Problem, I will get this all processed, but I will need $5000.00 upfront to get it all put together" He paid the Broker the money, and needless to say, he never heard from the Broker again. He is no longer on the internet, no phone number or any other way to contact him. This person was literally conned.

DO NOT LET THIS HAPPEN TO YOU. A Mortgage Broker does not need any money to process an application or to provide documentation to a bank. Most of the time the bank will be paying a fee to the Broker so you will not have to pay any money. There are cases, when your credit is not great or if you are going for a second mortgage where you will be paying extra fees, to the bank and the broker, but they will disclosed to you in writing and you will clearly know where all the money is going and being dispersed, and it is not until you are actually getting the mortgage that the money is paid.

This is really an isolated case, but be sure to check out your mortgage broker as much as you would your realtor, doctor or anyone else you need to trust.

So if you are a first time buyer you do not have to pay Property Purchase Tax, but you should know what it is, so you are aware of what we are talking about when we refer to it.

Property Purchase Tax is a tax charged by the Provincial government of BC. The tax is 1% on the first $200,000.00, 2% on the balance.

If you are a first time buyer and purchase under $425,000. You will not have to pay the tax. If you purchase a home between $425,000.00 and $450,000.00 there is a calculation that is done so you only pay part of the tax.

To be exempt from the tax you must qualify with the following criteria:

If you have any further questions regarding the Property Purchase Tax please feel free to contact me at anytime.

So one of the things you are going to need to purchase your new home is a down payment. The minimum you will need for a down payment is 5% of the purchase price. Now you can get your down payment from a few different sources.

1. You could save it.

2. There are still a couple banks that will lend you the down payment. In this case you will be borrowing 5% of the mortgage amount, so you will have to come up with a little bit of money on your own. The interest rate is higher when you do this, but it does give you a down payment if you have no other source for getting it.

3. You can borrow the downpayment from a bank, but it must be declared when you get your mortgage and counted as one of your debts.

4 You can get it as a gift from your immediate family. They will have to sign a letter to say that it is a gift and not a loan that has to be repaid.

Of course, you can put much more money down on the purchase of your new home. If you finance less than 80% of the purchase price of your home, you will not pay mortgage insurance. Mortgage insurance is a premium that is added to your mortgage to insure the bank. If you end up defaulting on your mortgage one of the insurers CMHC, Genworth, and Canada Guaranty will help cover the bank losses.

There is a a breakdown of the premiums, depending on the amount you put down:

80% 1%

Up to and including 85% 1.75%

Up to and including 90% 2.00%

Up to and including 95% 2.75%

If you use Non-traditional Down payments the premium is 2.90%

All of these premiums are based on a 25 year amortization and are calculated based on the mortgage amount.

Should you amortize your mortgage over 30 years you add .2%, 35 years you add another .2%.

As I mentioned before, this number is rolled into your mortgage so you do not have to come up with the money on your own.

In order to qualify for the First Time Home Owners exemption on the property purchase tax, you have to finance at least 70% of your purchase, so keep that in mind.

If you missed Part One of the First Time Home Buyers In BC series, you can check it out here.

My name is Lesley Wagstaff. I am a real estate agent and a mortgage broker in the lower Mainland area of Vancouver and the Fraser Valley.

I am putting together this series of blogs to help guide you through all the steps of buying and financing a home. I will be covering all aspects including extra programs, that are available to the first time buyer. Just to let you know, if you do not find you are getting this information soon enough, you can call at anytime for a private consultation.

OKAY,SO LET'S GET ON WITH THIS!!

So you have decided now is the time to get into the market. As I am writing this in the late summer of 2010, this is a great time for you to be looking at buying. The interest rates have dropped back to all time low levels, and it is a buyer's market. (A Buyer's Market is a time when there is a lot of properties for you to choose from as more people are wanting to sell, than are wanting to buy.)

You have looked endlessly on MLS.ca and found a lot of places that you think would be the perfect home for you. NOW WHAT? Well, first step is to see exactly what you qualify to buy. The best way to find this out is to find a mortgage broker to work with. Why don't I go to my own bank, you may ask?..Well, you could do that, but the great thing about using a mortgage broker is that they have the ability to "Shop" you to dozens of banks, your bank only has access to the programs in their company.

Getting a mortgage is not just a case of the best rate. You have to take into consideration what your life is like and what you want to be doing with your life after you have purchased. You don't want to be mortgage poor and not able to live the life you want. A good mortgage broker will look at all aspects of what you are looking to do and put you with the best bank possible to match your life, your rate, your mortgage and your new home.

Find a mortgage broker who you can talk to and be able to discuss every aspect of your financial life with comfortably. You want to be sure that they know all the information, so there are no surprises when you get farther along in the process.

Personally, I usually meet with my clients, in their homes or at a coffee shop or my office and spend a couple of hours going over all of the information you need to know to make an informed decision. What you can afford to buy? What kind of mortgage you should get? What kind of rate you should choose?What we have to do to make sure this is an easy and fun process?

So, in summary, make an appointment with a mortgage broker to see exactly what you can afford to buy and what you need to get all your financing in place? Once you know how much you qualify to buy, you are ready to start looking...SO THE SOONER THE BETTER!

Just so you know, this should be a fun process, so throughout the whole time, be sure you are surrounded with people you are comfortable with and feel comfortable sharing all of your information, both financial and about your life. This is the biggest financial decision you are ever going to make, so be sure that the people you are making your team feel the same way. This is like a marriage, you have to have open communication throughout the whole time.