How to Safely Buy a Home in Calgary and Obtain Financing

      It may be hard to understand but there are still people out there buying homes, renewing mortgages and refinancing their homes to increase cash flow. How could they and why would they want to mix with strangers in these uncertain times?

     Well, until March 14^th , most places in North America were starting their busy spring housing market. People had given notice in January and February that they were not going to renew their leases and had made offers on new and existing homes. Many people were also shopping for rates as their mortgages were coming up for renewal. Who knew that the world was about to come crashing down on their heads.

The housing industry had to make accommodations in order to help these people out.  If you had an accepted offer on a house, how could you obtain a mortgage without meeting a mortgage professional ? 

Fortunately we had the technology to help us out. Mortgage applications can be taken online or over the telephone and have been for several years. The big change has been signing a mortgage commitment. Lenders now allow us to have mortgage documents signed using an electronic signature.

     If you had not made it that far in the house buying process, realtors have also made a number of changes to limit contact. Obviously sellers are not happy with having strangers walking through their homes and touching door knobs and other items. “RECA, the real estate Council of Alberta is encouraging realtors to ask a series of health questions before realtors arrange to show homes” says Julie Pinault of Royal Lepage Solutions in Calgary. “Think of a property as a museum and don’t touch anything” she adds.

 “Open Houses have been cancelled for the foreseeable future” says Rebecca Yarmoloy of ReMax First. Homes can be first viewed using websites and if you are seriously interested in a property.”

   Some realtors are going even further. Lionel Sale from Frist Place Realty states that buyers meet the realtor at the property. The sellers are encouraged to turn on all the lights and leave doors and closets open so that no one will touch any surfaces that could spread the virus. Some sellers are leaving disposable gloves by the front door.

    If a home needs an appraisal, what can you do? Appraisers need 45 minutes to examine a property from top to bottom in order to establish a proper value for the home.  Once again, adaptations have been needed. For bungalows, the appraiser will go to the windows around the home and take photos. Other appraisers are   using 3^rd party technology to do their jobs. They will Facetime or WhatsApp the client and have them walk around the house they way they normally would in order to do a full inspections. This is called a Full Modified Appraisal.

     Finally, we get to the end of the process and you need to sign all the mortgage documents with the lawyer or notary. At this time, “wet” signatures are still needed. E-signatures are not allowed which poses a problem for social distancing. Another solution has been found. The home buyers go to the lawyer and go into a room with a copy of the mortgage documents. The lawyer sits in the next room using video conferencing or Zoom and goes over his copy of the documents, telling the buyers where they need to sign and explaining any parts of the contract they may not understand. When the clients leave, the lawyer goes into the signing room and picks up the signed copy to be registered at the title office.

     From beginning to end in the home buying , refinancing and renewal process, it’s now possible to obey social distancing rules and accomplish your home financing goals.

If you need any further information please feel free to contact me. At 403-836-1201

David Cooke has been a mortgage broker since 2005 and presently works for Jencor Mortgage Corp, situated in Calgary, Alberta

Brokers make a Difference

While many people will go to their bank to obtain a mortgage or line of credit they often feel betrayed by their favourite bank if their application is rejected. One big advantage that we have over banks is that we can send underwriter notes along with the application. Our questions and speaking at length with the borrower give us insight that the underwriter will never get from the facts and figures on the application.

 A while ago, I had an application at a lender for a young man who wanted to buy his first home.

He worked in the construction trades and his income history was up and down over the past 3 years. He needed overtime to support his application and the two year average wasn’t there.

I went back with 3 years of Notices of Assessments, his recent pay stubs and pleaded the case for my client. The underwriter finally asked for an exception based on my confidence in the client. She trusted my judgement and the mortgage was approved.

     This leads me to the idea that underwriter notes are very important and can mean the difference between an approval and a decline. If you have a chance, ask your underwriter how they like their notes; in point form or in paragraphs . Do they prefer emails or phone calls?

   When a successful mortgage broker writes notes they start by stating what product they are asking for and giving their contact information. I put my contact info at the top of the notes and at the bottom so they don’t have to go searching for it if they have a question or need clarification.  I then state what my client is trying to do; purchase their first home, refinance, a renewal or if it’s’ a switch, that they want to benefit from lower interest rates.

I then list the areas I want to highlight: Income, Credit, Property , Down payment and start with it their weakest link first and explain their situation. I had a client who had her down payment in a joint account with her father in Japan. I started with that knowing that a paper trail would be important. If the credit score is low, is it due to a past illness, divorce or job loss? I tell the underwriter right away. As  a result, underwriters trust me and have given my clients a second look or asked for an exception.  Finally, I finish up by summarizing the strong points in the file and thanking them for their consideration of my file. 

     I never yell or give my underwriters a blast if they decline a file. I will , however, ask why the file was declined so that I can better prepare my client for the disappointment and plan on how we can remedy the situation.  Just as a FYI,  a manager at a major bank told me that at one bank he worked for after hitting the send key he received a simple message back – either APPROVED or DECLINED with no explanation.  Now who do you think mortgage clients should deal with? A bank or a broker?
for more information visit my website at http://davidcooke.ca 

Let Someone Else Pay your (Second) Mortgage

The concept of building your wealth through rental properties is simple because they pay for themselves. You purchase and manage the property but your tenants actually pay for the properties and  whatever extra is profit for you. It's hard to resist because it's such an easy concept. Aside from any profit gained in charging your tenants more than the property costs you, there is another advantage for you. While your tenants occupy the property, its value continues to grow and you reap the benefits of the increased property value. That's where the big payoff lies. Your expenses are in any property repairs or upkeep that may arise from time to time. Most small items can be and will be taken care of by your tenants. The biggest component of running rental properties, to give you maximum profit from the least amount of hassle, is finding the right tenants. Dealing with tenants who do not pay or cause property damage can be issues that you'll have to deal with occasionally. The less you have to spend time and money on bad tenants, the more money you'll make. Long term tenants are the best choice. They have a commitment to the property and will consider it their home, not just a house they're renting. Another factor to consider is the type of home you purchase to rent. Cheap properties are tempting to acquire immediately because they require fewer dollars from you. However, middle and upper-class properties will require less maintenance and their values will appreciate better than cheaper homes, giving you a bigger payoff when you decide to sell. For more information on how you can invest in real estate contact David Cooke - 403-836-1201 or visit http://davidcooke.ca

 

episode 2 Home Sweet Home

If you need more information on home buying please contact David Cooke , your Calgary mortgage broker at
Dominion Lending Centres Westcor

Affordable Housing in Calgary

As anyone in Calgary knows, rental housing is becoming more and more difficult to find. The vacancy rate is in the 1% range and dropping. Housing prices are rising in response. How can anyone pay rent and save a down payment for a home while paying their bills? It can be tough. Affordable Housing Calgary has come up with a solution. They will provide 2/3's of the down payment for a condo unit. You only need $2000 for your portion of the down payment. If you are interested in this program , contact Calgary Affordable Homes

If you want to purchase a home and need help, feel free to contact me at 403- 836-1201 or via my website at http://davidcooke.ca .