Elizabeth Blair

As we move into 2009, you may be thinking about those spring-time projects that you will need to tackle, like landscaping the garden, rebuilding a patio or fence, changing older windows and doors, a new roof, or even remodeling your basement, kitchen or bathroom. If you tune in to some recent popular TV programs like “Extreme Makeover - Home Edition”, you will surely catch the home makeover bug. If you live in a freehold house, you should be spending an average of 1% of your home value annually, on maintenance, just to keep it in good repair and to prevent it from declining in value, according to “Home Buying for Dummies” by Eric Tyson and Ray Brown. And according to the Appraisal Institute of Canada’s 2004 Home Renovation Survey, professional home improvements and renovations will bring the following return on your investment: Top Four Renovations that will give you the Highest Payback Potential Bathroom renovations (75-100%) Kitchen renovations (75-100%) Interior painting (50-100%) Exterior painting (50-100%) Other Renovations Payback Potential Roof shingle replacement (50-80%) Furnace/heating system (50-80%) Basement renovation (50-75%) Recreation room addition (50-75%) Installing a fireplace (50-75%) Flooring (50-75%) Constructing a garage (50-75%) Window/door replacement (50-75%) Building a deck (50-75%) Central air conditioning (25-75%) Six Renovations that will give you the Lowest Payback Potential Landscaping (25-50%) Interlocking paving (25-50%) Building a fence (25-50%) Asphalt paving (20-50%) Adding a swimming pool (10-40%) Installing a skylight (0-25%) Homeowners can also visit the “Appraisal Institute of Canada” website, to try out their on-line tool which helps you understand what value you can anticipate to see from the various improvements that you make on your home. The name of this particular tool is called RENOVA and it is an excellent resource for homeowners. You may visit the site, by following this link below: http://component.aicanada.ca/e/resourcecenter_renova.cfm Remember that the referenced website link is only a guide, and you should always carefully consider that proper appraisal values can only be provided by a certified professional appraiser holding an AACI or CRA designation. It is also important to mention that an appraiser will also assess other factors, about the home, to complete accurate appraisal results, for example, the neighbourhood, recent real estate activity, lot, location, etc. This article was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area. You can contact Elizabeth directly by phone at (905) 510-5785 by email at eblair@mortgageedge.ca or you visit her website at: www.missmortgage.ca Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

I work in the mortgage financing business and often run into others who are in the same industry. I met someone the other day and we began to talk about the market and how things are going. We talked about the lenders, who I used, who they used. One of the things, that this person said, which I know to be true, but to hear it from someone's lips, caused me some concern.

The person said, I place all my clients with this lender, because it pays me more. Now truthfully, we are all looking to be paid well, but hold on. It is our responsibility to place our clients, with the best mortgage rate, the best terms and conditions, and the best lender that aligns with the clients needs and that might even be their current bank! I thought, well isn't this the reason why we are in a market tumble now, human nature's favourite past-time = Greed. Looking out for number one "me". It is a tempting allurement that gets dangled before us all the time, choose what is right for me, or choose what is right for the client. Real Estate professionals face the same choice.

I pulled this off Wikipedia: "......making him the center of his efforts, the one he aims to please, converting him into his own god, and creating pride with great concentration on the ego." I liked that description.

It is a sobering truth, that many individuals really truly are only seeking their own best interests. If you are shopping for a mortgage, please be brave and ask your mortgage broker or agent WHY they have chosen that lender. Hopefully, they will give you an honest answer.

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Tired of navigating through countless websites to find the exact information that you need? I am too so I decided to put together a list of useful links that you can use yourself.

The subject areas covered are, buying a home and mortgage loan insurance premiums, information on the Ontario land transfer tax and refund, enrolling in your city's pre-authorized payment plan, a link to ordering your own personal credit report as well as a link to the government website listing grants available to home owners who make their homes more energy efficient. Please let me know if these are helpful and if you happen to think of any new links that you would like to see, please pass along your ideas to me and I will attempt to add them here. I sincerely hope that these links can save you some time.

Do you need to check if a Mortgage Brokerage, Administrator, Mortgage Agent, or Mortgage Broker is registered and properly licensed in Ontario. Visit the Financial Services Commission of Ontario website at: http://www2.fsco.gov.on.ca/mbslist/agents.mbl

Do you want to look up the Mortgage Loan Insurance premiums with Genworth Financial Canada? Mortgage Loan Insurance premiums are available at:

http://www.genworth.ca/mi/eng/product_solutions/premiumRateTable.html

Do you want to look up the Mortgage Loan Insurance premiums with AIG United Guaranty? Mortgage Loan Insurance premiums are available at:

http://www.aigug.ca/products/premium-rate-chart.pdf

Do you want to look up the Mortgage Loan Insurance premiums with Canada Mortgage and Housing Corporation or CMHC? Mortgage Loan Insurance premiums are available at:

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

Do you need to know anything about the Ontario Land Transfer Tax or apply for the land transfer tax rebate? Visit the Government of Ontario, Ministry of Revenue website at:

http://www.rev.gov.on.ca/english/taxes/ltt/

Do you need to enrol in the City of Mississauga's Pre-authorized Tax Payment Plan? Visit the City of Mississauga website at:

http://www.mississauga.ca/portal/residents/taxformscentre

Do you need to enrol in the City of Oakville's Pre-authorized Tax Payment Plan? Visit the City of Oakville website at:

http://www.oakville.ca/taxpayment.htm

Do you need to enrol in the City of Milton's Pre-authorized Tax Payment Plan? Visit the City of Milton website at:

http://www.milton.ca/residents/tax/taxpayment.htm

Do you need to enrol in the City of Toronto's Pre-authorized Tax Payment Plan? Visit the City of Toronto website at:

http://www.toronto.ca/taxes/property_tax/forms.htm#plan

For an in-depth document of the ABCs of mortgages, you can visit the Financial Consumer Agency of Canada or FCAC website to access the document.

http://www.fcac-acfc.gc.ca/eng/publications/mortgages/Amortization_e.asp

Genworth Financial publishes daily mortgage rates on their website at:

http://www.genworth.ca/mi/eng/misc_pages/interest_rates.asp

You can order a copy of your own consumer credit report at:

http://www.equifax.com/home/en_ca

Do you want your home assessed for its energy efficiency? Visit this site: The Energuy

http://energuy.ca/ecoenergy/

Do you want to see what grants, rebates, discounts and incentives are available if you make your home more energy efficient? You can visit the Natural Resources Canada website at:

http://oee.nrcan.gc.ca/corporate/incentives.cfm

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

I met a financial planner, the other day, for coffee. He is selling an investment idea which I looked at carefully. Basically, the financial planner suggested I pass along my mortgage clients to him who have substantial equity in their homes. Those clients then, in turn, take that equity money and use it with a loan company to get money matched. For example, if you put in $100,000 of your own money, you get a 2-for1 loan, another $100,000, so your total investment money is $200,000. The financial planner also suggested that I could get paid for every client I sent over who signed up on the program. And it was even suggested that my compensation could be kept quiet, nobody had to know..... well right away, I could hear the alarm bells ringing in my head......not declaring my income is something I will not do as tempting as it may be despite the slow market and my shrinking pay check.

Even if I was not receiving "compensation" for this investment strategy, I reviewed the idea carefully and I admit that I remain extremely cautious with investments right now, in this market. Borrowing money to supplement existing funds for investments is not a new concept but in this market, I am not so sure it is a wise thing. There is no doubt that we are heading for a recession that may rival the 1929 one, except this time it is Global. The markets took until 1957 to recover your money then, and that doesn't include inflation. I wonder how long it will take this time?? In my opinion, it is going to be very difficult to make money, with investments, for the next few years.

Interest rates are heading down globally this month and next BUT in the Spring of 2009, inflation will be the number one concern. Do you remember the 70's when GIC rates reached 18%? You see.....the economic definition of inflation is the increase of money supply. In the past two months, central banks have increased the money supply by a few trillion dollars as they bail out their banks and mortgage companies and bond insurers. As this "new, hot off the press" money starts to flow, inflation will be rampant. The loan(s) being offered are not at a fixed rate. I checked the website for this loan investment company and the fine print says it fluctuates yearly according to the prime rate.

Volker tamed inflation by raising rates in the USA to double digits and I do honestly believe it will happen again. So anyone who takes this kind of investment strategy may very well see their investment go down and their payments go up. This is a super highway to bankruptcy ...... I will keep my soul and no thanks to the program, and no thanks to the compensation.

This blog was submitted by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: www.missmortgage.ca

As a first time home buyer, you may have heard that you may have to pay a mortgage insurance premium.

You will have to obtain mortgage loan insurance when you purchase a home and if your downpayment is LESS than 20%. Remember that lenders do reserve the right to insure your mortgage even if your downpayment is greater than 20% and this decision is often based on the risk associated with the financing. The key players that provide mortgage insurance in Canada today are CMHC, Genworth and AIG United Guaranty. The newest insurer to join is AIG United Guaranty. There may be more mortgage insurers joining the industry who may apply to the OFSI (Office of the Superintendent of Financial Institutions) to become mortgage insurers in Canada. More competition will result in more choice and lower premium costs for Canadians who want to purchase a home.

Here is a sample breakdown to help you understand how a mortgage insurance premium is calculated for a buyer who wants to purchase a home with a 5% downpayment.

Price of home being purchased	(A) $242,000
Your saved 5% downpayment	(B) $12,100
Price less downpayment (A) - (B) =	(C) $229,900
Insurance Premium calculated for a 5% downpayment is 2.75% of amount $229,900 Total mortgage loan insurance premium is à	(D) $6,322.25
Total amount advanced to you by the Lender total mortgage amount (C) + (D) =	$236,222.25
The lender who is reviewing your mortgage application will include the mortgage insurance premium (on your mortgage commitment) as part of your total mortgage loan and this is repaid over the term of your mortgage loan. You can also pay this premium up-front, on closing date, if you prefer.

It is also important to point out that the mortgage loan insurance premium (calculated in example above) is also subject to provincial sales tax and this tax amount is not included in the total loan amount therefore you would have to pay this sales tax on your closing date.

Here below is a table that gives you an idea on what the typical mortgage loan insurance premiums are, but you should go directly to the various insurer websites to check the current insurance premiums when you are ready to buy.

The mortgage loan insurance premium charges are calculated as follows:

Financing Needed on the Purchase	Insurance Premium
Up to and including 65%	0.50 %
Up to and including 75%	0.65 %
Up to and including 80%	1.00 %
Up to and including 85%	1.75 %
Up to and including 90%	2.00 %
Up to and including 95%	2.75 %

You may be asking, so why do I need mortgage loan insurance, is it mandatory, and who does it protect?

Why do I need mortgage loan insurance? It is the lender who requires the mortgage loan to be insured. The mortgage lender passes along the cost of insuring that mortgage, along to the consumer.

Is mortgage loan insurance mandatory? No. There are a few mortgage lenders, on the market, who may provide you with mortgage financing without mortgage loan insurance but there will most certainly be a much higher interest rate offered as well as other administrative fees that could be added to the mortgage loan amount. These other mortgage lenders can be accessed through the mortgage broker community.

Who does mortgage loan insurance protect? Mortgage loan insurance is required by the mortgage lender because it protects the lender, if, the borrower, for some reason, cannot pay their mortgage.

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca