5 Benefits on How to Protect Your Mortgage With Life Insurance

For potential homebuyers and current homeowners, a home is a costly investment with a long-term commitment. That's why every homeowner carrying a mortgage needs to get life insurance. Life insurance that covers a mortgage is called mortgage life insurance or mortgage protection insurance. This kind of insurance is designed to protect the lender, just in case they are unable to pay for their monthly mortgage fees. In this article, let's highlight five benefits on how to protect your mortgage with life insurance.

1. May protect homeowners due to sudden unemployment

With Canada's unemployment rate fluctuating every year, sometimes homeowners might face unexpected job loss due to termination or disability. The benefit of having mortgage life insurance alleviates the stress and financial burden related to unemployment by covering the period when the homeowner is out of work. At Northwood Mortgage, we offer a series of mortgage life insurance options that target the specific time frame if a homeowner loses their job, falls ill, or becomes physically disabled, causing unemployment.

2. May protect homeowners due to unexpected death

If the homeowner dies, the mortgage life insurance will cover the remaining amount left on the mortgage. Along with unemployment, death in the family can cause financial strain, especially when the homeowner passes away. Mortgage life insurance is a great benefit because homeowners are assured that after death, the mortgage will not become their family's responsibility.

3. Mortgage life insurance frees up your budget

When it comes to having mortgage life insurance, homeowners can free up their budget by the funds they get from other insurance policies. For example, the funds received from a personal life insurance or employer benefits could be used for payments on other financial obligations such as car payments, other bills, and university tuition. What would usually go towards the mortgage can be spent wisely on other expenses because the homeowner has mortgage life insurance.

4. Mortgage life insurance is convenient

Another benefit that mortgage life insurance offers is convenience. By covering unemployment, death, and other bills, it is an added layer of security in case unexpected circumstances should occur. With all its benefits, it is also easy to qualify. To purchase a mortgage life insurance policy, homeowners do not require to submit to a life insurance medical exam. This is a very convenient benefit to have for sickly individuals. In case the homeowner is denied life insurance due to medical illness, the homeowner with mortgage life insurance is financially protected.

5.Mortgage life insurance accommodates new homebuyers

For potential first-time homebuyers who can only afford a small down payment, getting mortgage life insurance can secure the home of their dreams. They can use mortgage life insurance through the Canada Mortgage Housing Corporation, which requires a 5% downpayment.

Northwood Mortgage
As you can see, choosing a mortgage insurance policy should be decided carefully. However, investing in mortgage insurance can safeguard you and your family's future in the long run.

At Northwood Mortgage, we have an expert staff of mortgage agents specializing in life insurance and mortgages in Toronto, Brampton, Mississauga, and the GTA. We take the time to listen to your needs, and we cater our services to each client.

If you would like more information on mortgage insurance coverage and protection in Toronto and the GTA, we invite you to book a FREE consultation with one of our Northwood Mortgage agents by calling 416-969-8130 ext. 111, toll-free at 888-492-3690, or contact us here. Once we receive your request, one of our mortgage agents will contact you within 24-48 hours to arrange an appointment.

northwoodmortgage.com

What Is Mortgage vs. Real Estate?

Real Estate is everything that mortgage needs, although Mortgage and Real estate relate to each other like peanut butter and jelly, In this article, I will give you a quick Mortgage101 and run down on how real estate transactions work.

What is Mortgage?

For the majority of people that buy real estate, the need for a mortgage in order to finance the cost of the property is essential for making real estate ownership a reality. If you have opted to buy a home, apartment, or other property you will probably need to take out a mortgage.

While a mortgage is usually considered to be a loan by many people, it is, in reality, a lien on the property. When the bank maintains a mortgage on a property, it means that the bank can reclaim ownership of the property if the buyer does not make loan payments on time.

A mortgage works in a similar fashion to a car loan. Taking out a mortgage means that the amount loaned out is secured by the property itself. Mortgages also have to be paid in monthly installments so that the principal and interest are covered.

Mortgage loans are typically calculated so that the principle and interest payments are spaced out over a set period of time. The terms are typically between 10 to 30 years for the average mortgage and last until the entire principal has been paid off.

 Ready For a Quick Quiz? 

A mortgage is typically the largest debt that any homeowner will ever have. Before applying for a mortgage, you should have a good idea of what is involved in the application process so that you can be sure that you will be approved. In addition, understanding the terms of a mortgage before you sign a contract is important so that you will know whether or not you can really afford it.

Qualifying for a Mortgage

If you want to be approved for a mortgage, there are a number of criteria that need to be met in order to qualify. The first important point is to make sure that your credit score is good to excellent. At a minimum, you need a credit score of 680 or better.

Some of the other factors that will help you to become qualified include:

* A front-end ratio of 28 percent
* A back-end ratio of 36 percent
* Being employed at the same job for at least two years
* Verification of your earnings and employment
* Thorough documentation of your financial situation
* An appraisal performed by a professional
* Private mortgage insurance (applies in some cases, especially when the amount of the down payment is low).

Mortgage Types

There are several different options when it comes to the type of loan that you want on your property. In addition, only certain types of loans are available to specific individuals. The three main types of mortgages are conventional loans, VA loans, and FHA loans.

Conventional Loans: Conventional loans are offered by private lenders, typically banks. You can not obtain a conventional mortgage from the government. In addition, these types of loans often have strict requirements that mean that you must have good credit. In addition, you must have cash available to cover the down payment, which can be up to 20 percent of the value of the mortgage in order to get approved.

FHA Loans: FHA loans are offered by the Federal Housing Administration. These loans are given out by the government. FHA loans are designed for individuals that can not afford to make a substantial down payment or have other credit issues.

VA Loans: VA loans are guaranteed by the U.S. Department of Veterans Affairs. These loans are only available to military personnel that incisively on duty or are veterans. There are also some qualifications that must be met in order to obtain these loans.

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Real Estate Debt

While mortgages can be helpful for obtaining homeownership, occasionally homeowners run into financial problems.

These problems can be caused by issues such as unsecured debt, credit card debt, loss of employment or other problems. If you have a mortgage, there are options for helping you to pay your mortgage while getting your debt problems under control.

Mortgage Refinancing

Mortgage interest rates have reached the lowest levels in some time. If you want to find some money for paying your other bills, refinancing your mortgage to a lower rate could help. It is important to understand that refinancing does come with fees and it may also extend the length of your mortgage.

Cash-out Refinancing

Cash-out refinancing is available to homeowners that have a significant amount of equity in the property.

After a cash-out refinance you will have cash that you can use to pay other debts. A pitfall of this method is that unsecured debts are now tied to your property and you have compromised the equity in your home.

Home Equity Loans

Home equity loans or second mortgages can be used to pay off other debts. You are eligible if you have equity in your property. You will receive a lump sum of money at a fixed-rate.

Real estate transactions encompass both the buying and selling of property. In order to perform such transactions, decisions must be made regarding the home’s value, the current status of the local real estate market and what terms for buying or selling would be best.

What is Real Estate?

Here Are Some Real Estate Types

Real estate comes in three main types which are resident, investment and residential. Residential real estate refers to the individual properties that are owned for residential purposes. It is the most common form of real estate in the United States.

Commercial real estate refers to properties that are used primarily for business purposes. Investment real estate refers to real estate that the owner buys in order to earn income. The investor is not looking to live or use the property personally. Rather, the property is leased out to another individual, which can help generate income for the property owner.

Real Estate Benefits and Drawbacks

Since real estate transactions are taking place in an ever-changing market, there are some risks associated with owning real estate. These risks include:

* The potential for a decline in property values due to changing market conditions
* Potential liability for any problems that occur on the property
* Risk of going into debt due to mortgages

Although these drawbacks are significant, this has not stopped people from investing in real estate. When things do go well, owning real estate can result in significant financial rewards. Some of the benefits of owning real estate include:

* Short term profits realized upon selling the real estate in a market upswing
* The potential to take out additional loans for other needs while using the owned real estate property as collateral
* The diversification of an investment portfolio

source: usa.inquirer.net

Things You Should Know Before Going for a Second Mortgage in Toronto

If you own a home in Canada then you have probably have heard of a second mortgage at some point in your life. A second mortgage is similar to a first mortgage, in that it is a loan secured by your property. As time passes you will accumulate more and more equity on your property. A second mortgage is primarily intended to use the equity that you’ve accumulated over the years.

According to a report by Business Insider, almost 2 million Canadians have a second mortgage, and nearly as many that have a HELOC. Some Canadians will use their second mortgage in order to avoid having to declare bankruptcy. In any event, a HELOC, for those unaware, is also another form of a second mortgage, because it serves as a line of credit for home equity. In other words, the person will supplement a second loan over their first in order to access their equity. Below are some things that you should know before going for a second mortgage in Toronto.

Different Types of Second Mortgages

A revolving HELOC works similarly to a credit card. That is, the borrower will have access to equity in perpetuity as they continue to pay off the principal (what they owed previously) over the upcoming months and years. Moreover, a HELOC can be modified to become a closed second mortgage, which functions much like a loan for a vehicle. That is, the borrower will receive only one lump sum of money from their equity and they must pay it off in a gradual manner.

It should also be noted that it is difficult to qualify for a HELOC of any kind, because they tend to only be offered to those with an impeccable credit profile and who happen to live in a prosperous urban area. Hence, those who have a poor credit profile or have a meager income will only likely have one option at their disposal—a private mortgage.

The Two Main Reasons Why Second Mortgages are Used

The most popular reason why a second mortgage is used is to pay off a consumer debt that has high interest. Many homeowners will also use a second mortgage in order to upgrade their home for resale or to renovate it for their own recreational purposes. Leveraging a second mortgage is highly recommended at the moment because credit card interest rates are presently 15%. As such, you can save a large sum of money by opting for a second mortgage.

For instance, let us imagine that you owe $30,000 on your credit card. In such a scenario you would have to pay roughly $600 in minimum payments every month; This is of course assuming that a 3% minimum payment is required. Now, if your interest rate was 15% APR then you would owe $4,500 in interest charges after just one year has elapsed. This is before you even get to the principal amount that is owed. As can be seen, interest charges can make or break first time homeowners who aren’t too careful with their fiancees.

Due to the aforementioned problems, many Canadians turn to a second mortgage in order to pay off their credit card debts. The end result is that their interest rates will be reduced because their second mortgage is secured by their home, which serves as the primary asset in this case.

Remember that Your Home Will Be Used as Collateral

If you have decided to take out a second mortgage on your home you must remember that your home will actually be used as collateral to secure the loan. As a result, if you fail to pay it off then the lender can foreclose on your property the same way they could with your first mortgage. However, the tradeoff is in the significantly lower interest rates that you will be charged, as your home will serve as an asset that will back your loan.

Take Advantage of Interest Only Payments

It is possible to only make interest payments with many of the second mortgage products that various lenders offer their clients; this will allow you to have easier and more affordable access to your home before you opt to sell your house to the highest bidder. Your monthly payments will also be significantly lower.

To further illustrate, if you were interested in renovating your home before resale or are interested in renegotiating your first mortgage, then you could remodel your home using the funds procured from the second mortgage. You could also have the option to pay off the interest charges. Then after you are done giving your home a makeover you could then resell it at a higher price and then use some of the money that you’ve made to pay off your second mortgage.

Avoid Private Mortgage Insurance

When a person applies for a standard mortgage in Canada they need to acquire private mortgage insurance if they are unable to put a minimum 20% down payment on their house. The end result is that they will have to pay fees, known as Canadian Mortgage and Housing Corporation fees, which can actually be quite exorbitant.

For instance, if you were to take out a half a million dollar mortgage with a 5% down payment then you would have to pay 4% worth of Canadian Mortgage and Housing Corporation fees. In other words, you would need to pay almost $20,000 in fees because you weren’t able to make the minimum 20% down payment.

The good news is you can take out a second mortgage in order to avoid private mortgage insurance. Of course this also means that you will have to add additional expenses to your monthly budget but it can still be a more affordable alternative to having to pay private mortgage insurance fees.

If you would like to learn more about obtaining a second mortgage in Toronto, please visit our website or call us at 1-888-495-4825.

source: northwoodmortgage.com

3 Things To Know About Mortgages For Overseas Properties

There are many good reasons to invest in property overseas. You may want to use the property as a vacation rental or as a vacation home for yourself and your family. Your child may be going to university overseas, and you may be thinking about buying a property as an investment where they are studying. Getting a mortgage for an overseas property is different than getting a mortgage in your country of residence, however, and there are some things to consider.

1. Hire an Expert

Even if you are experienced in buying real estate, the rules are often quite different when it comes to buying overseas. The best thing to do would be to find a local real estate agent in the country where you want to buy, who is experienced when it comes to dealing with overseas buyers. By working with a local agent, you can better understand the local laws and regulations when it comes to home purchasing and financing.

2. Getting Financing is Challenging

Obtaining a mortgage for an overseas property can be challenging. If you have a credit score from a foreign country, it won’t be counted overseas. You will have to obtain a mortgage from a bank in the country you are purchasing in, and the application process will be similar to that in your home country. You will still have to prove income and provide all other supporting documents. As a foreign buyer, you will likely be unable to get low mortgage rates.

Experts recommend you buy your first couple properties overseas outright, as it is unlikely you’ll be able to get a loan. Once you have a bit of a portfolio overseas, it will be easier to get a loan for future purchases.

3. You Can Leverage Your Current Property

While it’s difficult to get a mortgage from a foreign bank, some homeowners use the equity on their current residence to finance a purchase overseas. Speak to a mortgage broker about obtaining a home equity loan or refinancing in order to finance an overseas’ property. Refinancing can be tricky, so it’s best to seek the advice of a professional.

Buying a home overseas can be very rewarding. If you choose to use it as a holiday rental, you can make a good income. If you are moving overseas yourself, it’s a great investment and a good way to diversify your portfolio. While it is more difficult to get a mortgage and to get low mortgage rates overseas, it isn’t impossible. Of course, your ability to find low mortgage rates will differ depending on where you are buying. If you are considering buying a property overseas, contact one of our mortgage experts today for more information and advice!

source:  northwoodmortgage.com

Purchasing A Home With Solar Panels? 3 Things To Know Before You Buy

There are many benefits when it comes to purchasing a home with solar panels. Solar panels are a sustainable energy source that reduce negative impacts on the environment, save you lots of money on utility bills, raise the value of your home, and aid during emergencies where power may be cut off. It’s no wonder that more and more people are looking to purchase properties with solar panels.

While the benefits are numerous, there are also some considerations to take into account when it comes to purchasing a home with solar panels as well as when applying for a fixed or variable rate mortgage on a solar-powered property. Here are some things to know before you buy:

1. Appraisal Since solar technology is still developing, and is relatively new, it may be more difficult to get an appraisal on the home. In areas where solar panels are more common, appraisers will be able to be more accurate about the home’s value. However, if you are buying a home in an area with less solar energy, there’s a risk that the home could be over, or under, valued. This can work out in your favour, but it’s worth trying to find an appraiser who is knowledgeable about solar energy to avoid the risk of the home being overvalued.
   
   
2. Owned or Leased? The most important thing to know when buying a property with solar panels is whether the system is homeowner owned, or leased from a solar company.
   
   If the panels are homeowner owned, it’s a big plus. Homeowner-owned solar panels increase the value of the home by a substantial amount. Leased solar panels, however, require little to no money upfront so don’t do as much for the value of the home.
   
   Many home buyers are put off by leased solar panels as they don’t increase the value of the home and may seem like an additional complication. However, whether or not the home’s value is increased, leased solar panels will still provide positive impacts on the environment and save you money on electricity.
   
   
3. Energy Consumption If you are unsure whether solar energy is right for you and your lifestyle, it’s helpful to speak to the sellers of the home. By comparing their lifestyle and energy consumption to yours, you can get a better idea about whether or not solar energy would be right for you and your family. You may even ask to see their utility bills to get an idea of how much you would be saving.
   
   

For any questions about getting a fixed or variable rate mortgage on a solar-powered property, make an appointment to speak to one of our mortgage experts today!

source:  northwoodmortgage.com

Selling and Buying a New Home? Here are Your Options

For many homeowners, the purchase of a new home is dependant on the sale of their old one. While it would be ideal for the selling of your old home and purchase of your new home to happen at exactly the same time, the dates rarely line up like that. You may have sold your current home but are still searching for a new one. Or, you may have found the perfect property but are lacking a buyer for your current home. Selling and buying a new home can be daunting; fortunately, you do have options, and it can be done!

Sell First

There are some benefits to selling your home before buying a new one, the biggest one being that you will know exactly how much you can afford on the new home. If you don’t sell first, you may be overly optimistic about the value of your home and buy something you can’t actually afford. Or, you may lowball your new home and be disappointed when you find out what you could have had! Selling first will give you certainty about what you can afford, which is a great position to be in when buying.

Selling first means you’ll only have one mortgage payment—on the new home—rather than have to juggle two mortgages. However, some homeowners don’t like the uncertainty of selling their home without having somewhere else lined up. Selling first means you would have to find accommodation, whether with relatives, friends, or with a rental. You would also possibly have to put your belongings into storage, which can be a big hassle.

Buying First

Buying a home before selling your old home gives you lots of time to plan your move. However, buying first means you could end up paying two mortgage payments at once if your current home isn’t paid off. Whether or not you can afford this depends on your financial situation. If you can afford it, buying first is a good way to ease the selling process by taking the pressure off finding a new place.

Rent Your Old Home

If you feel you aren’t able to afford two mortgage payments but have found a new home you don’t want to miss out on, you could move into the new home and rent out your old property. While this requires the added pressure and stress of finding tenants, and being a landlord, it can be really helpful for paying off your mortgage and alleviating the financial stress of owning two properties.

These are just a few of the options available when it comes to selling and buying a new home. If you are considering selling and buying, speak to a mortgage professional to see what kind of potential expenses you can expect. Contact our experts today to set up a consultation!

source:  northwoodmortgage.com

3 Signs To Refinance Your Mortgage

Refinancing your mortgage simply means replacing your existing mortgage with another one. Homeowners often refinance their mortgages in order to get better interest terms and lower mortgage rates. When you refinance your mortgage, your existing mortgage doesn’t simply disappear. Rather, it is paid off and a new loan is created. You may be thinking of refinancing to get lower mortgage rates, or perhaps you’d like to change your interest terms, for instance, from a variable to a fixed rate. Here are some signs that it could be a good idea to look into refinancing:

1.Current Interest Rates Are Lower
Most lenders advise the best time to refinance is when the interest rate is at least two percentage points below your existing mortgage rate. If the current interest rate is substantially lower, refinancing can be a good way to save money. By getting a lower mortgage rate, you will be able to build equity in your home more quickly.

2. Making a Big Purchase
If you need to make a big purchase, such as a car or education, you can refinance your mortgage in order to take out a line of credit on your home. A home equity line of credit allows you to use your home equity as collateral in a substantial loan. If you choose to refinance and take out a home equity loan, then the value of your home will be appraised. This means that if you’ve made substantial improvements to your home over the years, or the market has gone up, you can take out sizable home equity lines of credit, while paying off your mortgage.

 3. Home Equity
Having greater home equity, meaning the percentage of the home you own outright, can make it easier to qualify for refinancing. Most lenders want to see that your equity is at least at 20% before approving a refinance, however in some cases you can still qualify with less than that. Put simply, the more equity you have in your home, the better your refinance terms will be.

Refinancing can be risky and the best way to determine if it’s right for you is to speak to one of our mortgage professionals. Mortgage rates can change quickly and we are dedicated to finding you low mortgage rates, as well as short-term rate promotions. If you are considering refinancing, but would like more information about how to proceed, contact us today.

source:  northwoodmortgage.com

8 Things To Know About Mortgage Insurance

If you’re in the process of applying for a mortgage or starting to shop around for one, you’re probably thinking about how you can get a low mortgage rate. However, there’s more to getting a mortgage than the rate. There’s also mortgage insurance, which is an important part of getting a home loan if you’re having trouble coming up with a decent down payment. Many Canadians are not aware of what mortgage insurance is. Below you’ll find eight important things to know about mortgage insurance.






    1. This type of insurance protects the lender against default and not the homeowner. Mortgage insurance is designed to ensure the lender is able to recoup costs should you default on your loan.

    2. Mortgage insurance is mandatory for borrowers who can only come up with a down payment for their home of less than 20% of the total. Furthermore, down payments cannot be less than 5%.

    3. The cost of mortgage insurance depends on the type of loan you’ve applied for and the amount of your down payment.

    4. Mortgage insurance is not the same as homeowner insurance. Homeowner insurance is put in place to protect your home and possessions against damages such as fire, theft, etc. Also, mortgage life insurance is different than mortgage insurance. Mortgage life insurance in designed to repay any outstanding mortgage payments should the homeowner find themselves on long-term disability or in the event of death.

    5. Insurance has nothing to do with getting you a low mortgage rate. To get a low mortgage rate you need good credit and a good mortgage broker because he or she will shop around for you to find a low rate. However, having mortgage insurance doesn’t hurt your chances of getting a low mortgage rate.

    6. There are only three places you can get mortgage insurance in Canada: CMHC, Genworth Financial and Canada Guarantee. Any other place offering mortgage insurance is a scam.

    7. Mortgage insurance costs the homebuyer 2.80%-4.00% of the total mortgage amount, but it does allow you to purchase a home with a lower down payment.

    8. You don’t have to pay the premium on mortgage insurance up front. The cost gets lumped in with your mortgage payments.

The best way to learn about mortgage insurance is to talk to your mortgage broker. While you’re at it, you can inquire about getting a low mortgage rate.

source:  northwoodmortgage.com

Home Equity vs. a Loan: How to Choose the Best Option

For many Canadian homeowners, their home is the biggest investment they will make in their lifetime. There are several options for loans for homeowners, and in this article we’ll look at two options: an equity mortgage versus a mortgage loan.

Home Equity Mortgage

A home equity mortgage is different than a regular mortgage loan in that it acts more as a line of credit. If you take out an equity mortgage, the bank will agree to lend you a certain amount, but with the equity in your home acting as collateral.

An equity loan will usually have lower interest rates than a line of credit, and these rates will usually be variable, fluctuating with the market.

An equity mortgage does not require a monthly payment like a traditional mortgage loan does. Rather, it works like a credit card where you will need to make a minimum monthly payment. Taking out only what you need rather than having to make a set monthly payment can help homeowners save money on interest rates.

Many homeowners prefer the flexibility of an equity mortgage. However, it can be riskier than a traditional mortgage in that if you cannot make your payments, your home is at risk.

Mortgage Loans

A traditional mortgage loan can come as a fixed rate mortgage or variable rate mortgage. First, you will need to be approved by your lender. Once you have been approved, your mortgage is calculated based on your income, any existing debt, and the price of the property. Mortgage rates are based on the mortgage market.

Whether you have a fixed or variable rate mortgage, you will make the same monthly payment for the duration of your mortgage term. With a variable rate mortgage, the interest rate fluctuates based on the rates set by the bank. A variable rate mortgage, though riskier than a fixed rate, can save homeowners money if interest rates fall, and offer greater flexibility.

The biggest factor in deciding which loan is right for you is your financial planning. A mortgage loan is best for people who want to pay off their mortgage in a specific amount of time and make the same payment each month. A home equity mortgage allows greater flexibility and can be more adaptable, especially if you have unexpected expenses.

There are many complex factors when it comes to choosing the right loan. Consult one of our professional, experienced mortgage agents today to discuss which option is right for you!

source: northwoodmortgage.com

Tips For Getting A Low Mortgage Refinance Rate

If given the choice, every homeowner would happily choose a low mortgage rate. For those who find themselves having to refinance their home, lower rates can help out even more. There are many reasons homeowners may have to, or choose to, refinance their home. For example:

   * To help pay off debt.

   * To finance other investments, such as the purchase of more property or renovation costs.

   * To pay for children’s education or other large purchases.


Before you dive into hunting for the most competitive mortgage rates, it’s important you contact a mortgage professional to guide you along the way. A mortgage expert can help you plan and budget, and find the best loan for your needs and financial goals. Everyone’s needs are unique, and a mortgage expert will be able to give you personalized advice.

So, what is the best way to get a low mortgage rate? Here are some ideas!








    * Raise your credit score: Many lenders require a minimum credit score to even approve your mortgage, but if you have a higher credit score (higher than 740), then you are more likely to get lower refinance rates.

    * Be organized: To apply for refinancing, you will have to present your credit reports, as well as two years of tax returns, recent bank and investment statements, and pay stubs. Having all your financial documentation organized will ease the process of applying for refinancing.

    * Lower your debt-to-income ratio: In addition to helping raise your credit score, paying your bills and credit card balances on time will help you get debt under control. If your debt-to-income ratio is too high, you may face higher mortgage rates or be denied for refinancing.

    * Do your research: You can begin researching online even before you speak to a mortgage expert. Compare thoroughly the mortgage rates offered in order to find the lowest rate and the best loan program for you.

    * Choose the best loan term: Your loan term (for instance, 10,15, or 30 years) will determine the amount of your mortgage payments. Choosing a 30-year term will result in lower payments.

    * Budget: If you are refinancing, you will have to pay closing costs as well as any lender fees and other fees, including appraisal and legal advice. Make sure you budget for these costs while planning your refinance.

By researching mortgage experts and enlisting the help of one, you can refinance smoothly and find a low mortgage rate to help you pay off debt or purchase further investments!

source: northwoodmortgage.com

Five Tips For Increasing Your Home’s Equity

Equity is the magic word when it comes to homeownership. There are equity mortgages and other products that you can tap into when you’ve increased the value of your home. However, equity doesn’t grow on trees, so here are five tips for increasing your home’s equity:

  1. Pay off the principal: The quicker you pay off the mortgage principal, the more equity you build up. Look into acquiring prepayment privileges from your lender. Or if the prepayment penalty isn’t that great, it may make sense to pay off your principal as quickly as you can even if you’re penalized because you’ll be that much closer to getting an equity mortgage (or similar product).

  2.  Hire an inspector: A certified home inspector will tell you how much your home is currently worth and what improvements are necessary to up its equity.

  3.  Make upgrades to the kitchen and bathrooms: Get rid of old tiling, upgrade your appliances, get a new showerhead – do whatever it takes to upgrade your bathrooms and kitchen. Moreover, if you have an unfinished basement, finish it. You can even add a basement apartment if there’s enough room to have a full bath, kitchenette, bedroom and living area.

  4.  Create more curb appeal: Curb appeal is how enticing your home is from the street. Ask yourself this: “When people drive by, do they stop and marvel at how beautiful my home is?” If the answer is no, then you have work to do. To create more curb appeal, make sure that your front door, roof, porch, windows – basically any area of the home that is visible from the street – is revamped or at least looks new. Manicure your lawn as well because overgrown hedges and grass can make a property look uninviting.

  5.  Clean your house: A clean house is an attractive house. Even if you’re not planning on selling your house, hiring professional cleaners to clean your home’s eavestroughs, windows and doors can increase its equity. Make sure everything gets a deep clean, from the light fixtures to the furnace to the garage door. Another bonus of cleaning your house is that you can declutter. Getting rid of old clothes and boxes from your attic or garage will not only create space, it will make moving easier when/if you do sell your home.

Once you’ve put money back into your home, you can take money out of it. Equity mortgages are available that use the amount of equity built up in your home to determine how much you can borrow. You can also refinance or take out a HELOC (home equity line of credit).

source: northwoodmortgage.com

Everything You Need To Know About Mortgage Pre-Approval

Getting pre-approved for a mortgage is always good news for prospective homeowners. Unfortunately, many of them tend to mistake pre-approval for actual approval. Hence, it comes as a shock to many of them when they get turned down for a mortgage. Pre-approval is not the same as a final approval, so it is important that you appreciate the difference when looking to secure a mortgage.

Your pre-approved figure may not be your actual figure

It is fairly easy to get pre-approved for a certain amount; that is because lenders often don’t ask for extensive documentation in the pre-approval process. The pre-approval figure is merely an estimate of how much the lender could potentially give. The actual amount is only given after a thorough examination of the property in question and the financial status of the homebuyer. In the end, the amount the prospective homeowner qualifies for might not match the value of the house.

Pre-approved rates are not necessarily the best

Statistics show that most homeowners don’t end up taking the mortgage they were pre-approved for. Pre-approved rates are often slightly higher than the market rate, and this is assuming that you are pre-approved. It is best to check rates 30 days before closing, as they tend to be slightly lower than the market rate.

Your financial situation is crucial

Many lenders pre-approve you without asking for details about your financial situation. However, this will change when it is time for a formal approval. It is only when the lender gets a better idea of you financial situation that they will determine that you can get a mortgage at the pre-approved rate.

The property itself is important

Your financial situation is not the only thing lenders take into consideration. The property itself is also a big factor in whether you get the mortgage. The property might be overpriced, or it may belong to a certain category of buildings that the lender doesn’t approve for.

Pay attention to features

Pay attention to all the features that come with a pre-approval, such as rate holds, discounts, and penalties. Also, choose lenders that have a thorough vetting process for pre-approval. This way you will less likely end up with surprises in the end.

Getting pre-approved is useful, but it is not a guarantee of anything. It is actually quite possible to get a good mortgage without pre-approval. The best way to take advantage of pre-approval is to make sure you have your own finances in order and do as much shopping around as possible. For more information on pre-approval, contact us today.

source:  northwoodmortgage.com

20 Whirlpool voice-activated smart appliances steal spotlight at CES

AI assistants like the ones in the Amazon Echo and Google home have mostly taken over the living room. The next space to conquer is the kitchen, and Whirlpool is more than happy to open the flood gates.

Twenty new models of smart appliances were recently unveiled at CES 2017. GE says that all these devices will have Wi-Fi connectivity and will be voice-activated as a standard, reports Digital Trends.

This lineup includes dishwashers, fridges, microwaves, ranges, and wall ovens, to name a few. Homeowners will soon be living the future where they can simply tell the stove to preheat or shut off before dinner gets overcooked.

Jason Mathew, senior director of global connected strategy at Whirlpool, describes the features of these smart appliances as ‘Scan-to-Cook.’ People will one day be able to simply take a picture or scan a bar code for the oven to heat up, say, frozen pizza, at just the right temperature.

Whirlpool’s broader version includes working with Innit, a company that is figuring out a way to digitize food.

Finally, as current AI assistants learn to adjust to specific user preferences, so too will these smart appliances in the future. For example, ovens will learn how chewy or crispy the users would like their cookies, and the ovens would adjust the cooking time accordingly.

There are big things in store for AI assistance in the household. Next thing we know, the fridge will be suggesting what to get from the grocery. Alfred Bayle

source: technology.inquirer.net

5 Benefits Of Mortgage Insurance

Mortgage insurance is an insurance vehicle designed to protect the lender in case the owner of the mortgage is unable to pay for their monthly costs. But mortgage insurance can also work to benefit the homeowner as well. And in this latest article, our expert team highlights five of the top benefits of mortgage insurance.

1. Access to Better Interest Rates

    Because of the protection mortgage insurance offers lenders, it then allows the lending company to offer homebuyers access to better interest rates. This works to consolidate the cost of the home for the buyer.

2. Offers Access to the Marketplace for Many Buyers

    Homebuyers who are self-employed or don’t otherwise have access to steady income may also benefit from mortgage insurance. Mortgage insurance ensures that buyers outside the traditional marketplace can qualify for a low cost mortgage while keeping the lender’s interests protected.

3. Mortgage Insurance can be Transferred

    Another advantage of mortgage insurance is that it can be transferred from one property to another. This means that owners looking to purchase a new property can simply save their premiums over time and transfer their insurance to the new property. By maintaining this payment record over time, owners can show lenders they’re trustworthy, potentially limiting their future purchase costs.

4. Allows Buyers to Purchase with a Smaller Down Payment

    The use of mortgage insurance also now means that buyers with only a small down payment can enter the marketplace. Buyers can use insurance through the CMHC and will only have to pay 5% down on their property. This gives first-time buyers and others with limited resources the flexibility to enter the marketplace.

5. May Protect Buyers in Case of Job Loss

    The consistent payment of mortgage insurance premiums can help protect the homeowner in case they lose their income for a short period of time. This could be vital for Canadians with growing families, and offers a way to avoid the stress and financial hardship associated with a period of unemployment. Lenders now offer a series of insurance options to help specifically manage time when homeowners are out of work, ill or otherwise unable to pay their financing costs.

The mortgage insurance product is now offering millions of Canadians access to the wider real estate marketplace, by protecting lenders and safeguarding homes. To learn more on insurance and the benefits it provides to homeowners, contact our expert team today.

source: northwoodmortgage.com

Three Tips To Save For A Down Payment

Saving for a down payment can be daunting for first-time home buyers, but breaking it down into small steps can make the process less daunting. A home is a great investment, and there are many ways to save for this big purchase.

 A potential home buyer should try to save 5-20% of the value of the home. Here are some helpful tips for saving for your dream home.

    1. Let Your Money Grow

Hold your savings in a fund where they can accumulate the highest possible amount of interest. Good examples of accounts include:

        Canadian Tax Free Savings Account (TFSA)
        Guaranteed Investment Certificate (GIC)
        Mutual Funds
        RRSP
        High Interest Savings Account

    2. Pay off Existing Debt

It’s hard for your money to grow when you owe–and are paying interest. In fact, those who have too much consumer debt will not qualify for a mortgage. Before starting to save for a down payment, address existing debt. If you feel overwhelmed by this project, just take it slow.

    3. Downsize

Examine your current lifestyle to see if there are any areas in your life where you can downsize or cutback. Not only can this help you save for a down payment, it can also help you pay off existing debt and not accumulate more.


    Look where you’re spending your money. Are you:

        Going out a lot?
        Buying pricey new clothes every season?
        Indulging in expensive vacations?
        Buying all the latest technology?


Once you identify where you are overspending, try to put yourself on a budget. Even small compromises in your lifestyle can have a snowball effect, and accelerate your saving process. For instance:

Eating out a lot? Going out to restaurants can become very expensive. Perhaps you go out for dinner once a week. Try cooking at home and cutting back to just going out once a month.
       
Shopping too much? Take stock of what you already have, and only spend money on things you absolutely need. Maybe you really want a new spring jacket, but if you already have a perfectly good one, that money should be going to your savings.
       
Pricey vacations? Look for getaways that are closer to home, or keep an eye out for cheap flights and trip deals.


When it comes to saving money, the little things really make a difference. It may seem like a sacrifice, but it is one that will pay off down the road. There are many ways to be creative when it comes to saving money, and once you find the way that’s right for you, you’ll be well on your way to becoming a homeowner!

source: northwoodmortgage.com

Refinancing Can Save You Money

It was not so very long ago that refinancing a mortgage was an easy decision. Rates were low and values seemed ready to rise forever. Millions of homeowners were cashing in on their growing equity, often walking away with a double win: lower monthly payments and a nice big check. It was the best of all possible real estate worlds.

The mortgage landscape has changed a great deal since those halcyon days, and today’s homeowner needs to look more carefully at the implications of refinancing an existing loan. There are still many reasons to refinance, but there are pitfalls to consider as well.





Good Reasons to Refinance

In almost every case, the best reason to refinance is to save money, and the simplest way to save is with a lower interest rate. If rates will be significantly lower on a new loan than they are on an existing loan, savings naturally follow. For example, a loan of $100,000 that carries an interest rate of 5 percent costs $5,000 in interest every year. If the rate can be reduced to 4 percent, that represents a saving of $1,000 annually.

Every prospective borrower does not get the same interest rate. Instead, the rate paid by a given borrower is customized according to that borrower’s specific circumstances. The biggest influence on the rate is the creditworthiness of the borrower. If your credit score has improved since you last took out a loan, there is a very good chance that you can get a lower rate now.

You may also be able to save because of changes in things you cannot control. If the amount of the loan was high when the property was purchased, that loan may have been categorized as a “jumbo” loan, a category that comes with higher rates. The cut-off for jumbo loans changes every year, though, and you may find that your loan amount no longer falls within jumbo parameters. In that case, it can make sense to investigate a conventional loan at a lower rate.

Saving money may be the single best reason to refinance, but not all refinances are motivated by savings. Borrowers often want to tap some of their home equity, whether to pay bills, finance an education, make improvements to the property or for any of a hundred reasons. This can be a perfectly valid choice, but borrowers should remember that they are using their homes as collateral and consider the risk involved.

Good Reasons to Think Twice

Regardless of interest rates or property values, borrowers should know that a refinance resets the mortgage clock. If an existing loan has a 30 year term, a new loan will start from scratch. If a loan has been outstanding for five years or more, the borrower is starting to see more principal included in each payment. With any new loan, the first few years are almost entirely devoted to interest payments.

The second issue to consider is whether the decrease in rate is enough to make the transaction worthwhile as a whole. Almost all loans have closing costs. If those costs are high, they can outweigh any savings that come from a lower interest rate.

The borrower’s plans play a part in the tradeoff between closing costs and rate. If Borrower A pays $5,000 in closing costs while saving $1,000 per year on monthly payments, he will not recoup those closing costs if he plans to sell the house next year. Borrower B, however, who plans to be in the home for the next 20 years, will see savings after the first five years and will save enough over the life of the loan to more than make up for the initial costs.

Private Mortgage Insurance (PMI) can also be a factor. PMI is a monthly cost that is typically applied to mortgages when the loan-to-value ratio exceeds 80 percent. A borrower may not have faced PMI when he purchased the property, but, if the house has lost value, PMI may suddenly be required.

Even if they can be approved for a mortgage, borrowers who have had recent credit issues may run into problems. Lenders save their lowest rates for their most creditworthy borrowers. Borrowers with credit issues often find themselves faced with higher rates when trying to refinance, a situation that is the reverse of the one facing borrowers who are refinancing with improved credit scores.

source: bripblap.com

8 Mistakes that Will Prevent Your Home from Selling

It’s a challenging market for home sellers right now. Buyers have a lot of options—and they don’t have to buy what you’re selling. Your house is likely just one located in a sea of for-sale signs, so you can’t be sloppy about putting it on the market.

Luckily, we’ve rounded up the dos and don’ts that will help you collect thousands (if not hundreds of thousands!) for your place.







1. Don’t … ask for too much money.

Yes, you know what you paid for the house. But that doesn’t mean that it’s still worth that amount—or that it’s appreciated in value since you bought it. “Your house is only worth what the market is willing to pay you,” says certified financial planner Ellen Derrick of LearnVest Planning Services, who has bought and sold at least eight homes, including investment properties. “It doesn’t matter what’s in it. And it doesn’t matter what your mortgage is.” Your realtor has an eye on the market and knows what kind of prices homes—just like yours—are garnering now. Pricing your home too high will discourage interested parties from making an offer, and your property could sit for months, which isn’t your goal.

What to do: Have a few realtors give you a price on the home (or get a comparative market analysis), and—this is key—don’t ignore them. Keep in mind that even if you’ve made pricey improvements to the home (granite countertops, stainless steel appliances), you may not get your money back if you’re the only home on the block with such upgrades. If comparable kitchens in the neighborhood don’t have similar upgrades, buyers aren’t expecting fancy perks in yours, and may not be willing to pony up for the difference.

2. Don’t … skip the marketing.

You may think that all you have to do is take one photo of the house, stick a “For Sale” sign in your yard and buyers will come pouring in the door. Au contraire. “The only way to guarantee that you’re going to get the highest price for the house is to use all of the marketing options available to you,” says Holly Mellstrom, a realtor in Pelham, NY. “This means Internet advertising, 30 pictures of your house, public open houses and even postcards.” The more people who see your house, the better your chances are of selling it. In an age when buyers start their searches online, counting on drive-bys and word of mouth isn’t enough anymore.

What to do: Don’t wait until the last minute to notify a realtor that your house is for sale. If you can, give her at least a month of lead time, so she can research comparable homes and set a good price. “Give them time to book their favorite professional photographer,” Mellstrom says. “And give them time to photograph your house on a day the sun is out.” In fact, if you live in a seasonal area, and you know that you’re going to put the house on the market in February, have photos taken in September, when the grass is still green and the trees have leaves.

3. Don’t … go it alone, unless you know what you’re doing.

If you’ve bought and sold half a dozen homes of your own or you live in a sought-after neighborhood where they sell in two days, you might be able to pull off a For Sale By Owner. If you aren’t a seasoned pro, however, let a professional take the reins. “Some people don’t buy and sell houses more than once or twice in a lifetime, and there’s a lot of money at stake,” Mellstrom says. “And there are so many disclosure laws now. Depending on the laws in your state, you’re really accepting some liability by trying to sell it yourself, unless you have a friend or an attorney who can guide you through the process.” A realtor also knows what’s selling around you, and for what price. She can tell you whether an offer is reasonable, and help you negotiate smartly. Plus, you may not save as much as you think in the end. “People who buy For Sale By Owner houses automatically discount the price they’re willing to offer because there is no realtor involved,” Mellstrom says.

What to do: If you can, get a realtor recommendation from a friend or colleague. Check references, conduct interviews and go with someone with a proven track record.

4. Don’t … neglect to fix things that are broken.

If sellers walk through your house and spot a handful of items that need immediate repair, they’re going to wonder how well you’ve maintained the things they can’t see. The entry way is a big tip-off. Got a loose hand rail on the steps, sagging screen door or jiggly door knob? Fix them. Clear your gutters, patch holes in your walls and address dripping faucets.

What to do: Do a walk-through of your own home, pretending that you’re seeing it for the first time. What things have you always meant to fix? Now is the time. Spend a few weekends dealing with all of those niggling projects to get your home in show-worthy shape.

5. Don’t … get emotionally involved.
Yes, it’s your house. Yes, you sweated blood and tears to get it just the way you wanted it. But, no, that does not make it someone else’s “perfect,” particularly when you’ve made some unique decorating decisions. You want the space to look as neutral as possible, so buyers can envision themselves in the space. So even if those teal walls in the bedroom look knock-out great with your duvet, they probably won’t match anyone else’s things. Let go of the features you love, and make it a house most people could love—and that might mean painting all of the walls a soft, neutral color. “My office at home is a robin’s egg blue,” Derrick says. “But if we get ready to sell that house, you can bet I’m repainting it.”

What to do: Have a realtor walk through your home, and when she tells you what you’ll need to change to make it marketable, listen to her. Start thinking about your house as a commodity, not an extension of your identity. If buyers don’t love it, it’s not a personal insult. It’s simply a deal that didn’t work out.

6. Don’t … leave your stuff everywhere.

You want buyers to feel like they could move into your house tomorrow—with their things. And your collectible tchotchkes, photos and utility bills make the space feel a little too personal. “That first impression is really important, and if they’re greeted with a huge photograph of you on your wedding day 25 years ago over the fireplace, that’s really distracting,” Mellstrom says. “It sends the message to the buyer that ‘This is my house, not your house.’”

What to do: Before you put the home on the market, get a few boxes and grab every extraneous thing you see: photos, knick-knacks, books. If it helps, take a few pictures of each room, and try to view them through a buyer’s eyes. What could you remove from each room to make the space feel bigger? “You want it to look like a hotel room,” Derrick says. “Hotel rooms look comfortable, but they don’t look like they’re somebody else’s comfortable.” Also? Don’t hang out at showings. While you may want to tell prospective buyers about all of the things you’ve done to the house, it’s best to leave them be. If there’s some information you think is important for them to know, leave a flyer on the kitchen counter.

7. Don’t … get offended by a lowball offer.

Just because someone came in with a really low bid is no reason to walk off in a huff. Now’s your chance to negotiate. “Buyers are trying to buy your house for the lowest price possible,” Mellstrom says. “Don’t blow them off. They might love your house. You can’t blame them for trying.” In other words, it’s not personal, and it’s not a slam on your housekeeping. It’s a business transaction.

What to do: Come back with a counteroffer. Typically, most buyers will come back with a second offer, which is a better indication of what they’re really willing to pay.

8. Don’t … lose a sale over something stupid.

It’s possible to get 99% of the way through a home sale, only to stall out at the end over a minor detail. Don’t be that seller. “I’ve seen people throw away getting a $450,000 house sold over somebody wanting to take the mantle instead of leaving the mantle over the fireplace,” Derrick says.

What to do: Unless it’s an heirloom that’s been in your family for generations, remember that you can probably find another one—but you may not find another buyer at that price. To be safe, if there are things you’re feeling like you can’t live without, such as the curtains you found at a crazy flea market or the light fixture you discovered at an antiques store, replace them with something else before you show the house.

source: foxbusiness.com

5 Reasons You’re Paying Too Much For Home Insurance

Insurance is designed to offer you peace of mind in the event of a financial crisis; it shouldn’t put you in one. If you feel like you’re paying way too much for homeowners insurance, it’s possible you’ve made one of these common mistakes of home insurance buyers:

You didn’t compare rates

 

It’s the first step in any smart shopper’s process, whether you’re buying groceries, laptops or insurance. Don’t just purchase the first policy you find or become complacent with your current provider’s rates. Comparison shopping is the most effective way to get the most value out of your insurance and ensure that you’re not paying more than your neighbors for no other reason than you just didn’t do your research.

You’ve purchased two policies from two providers

 

Most providers offer special bundle prices that could help you save as much as 20% on your premium. Consider consolidating your auto and homeowners insurance policies by purchasing them from the same provider. In addition to big savings, it’ll help cut the time it takes to manage your policies in half.

Your deductible is too low

Depending on how much you think you could afford to pay out of pocket in an emergency, raising your deductible could be a smart savings strategy for you. The higher your deductible is, the lower your premium will be, and vice versa. If your monthly payments seem way too high, take a look at what amount your deductible is set and work with a licensed agent to find the optimal balance for your budget.

You haven’t uncovered discounts

 

Do you have a squeaky-clean claims history? Have you installed smoke detectors in your home? Do you keep fire extinguishers around? If you answered yes to any of these questions and aren’t collecting discounts on your home insurance, you’re paying way too much. Work with a licensed agent to discover all of the discounts for which you could be eligible, and narrow down the lower premium you deserve.

You have several claims under your belt

 

If you have a history of filing large claims, you’ll probably have a higher home insurance premium than your neighbors. That doesn’t mean you shouldn’t file claims when you need to – that’s what your policy is for. However, if you find that your home is extremely accident-prone, it’s probably a good idea to re-evaluate your safety practices. It may also be to your advantage to make some improvements around the house to help prevent claims, such as reinforcing window shutters or repairing an older roof. In addition to helping to prevent claims, some insurers may offer discounts for some home improvements such as these.


Whether you’re shopping for a new policy or looking to find better rates, keep these common insurance mistakes in the back of your mind. It’s easy to find a better value and greater peace of mind when you know what not to do when buying homeowners insurance.

source:  http://homeinsurance.com/blog/2013/01/18/5-reasons-you%E2%80%99re-paying-too-much-for-home-insurance/

How Liability Insurance Can Protect You in a Slip and Fall Accident

Mortgage lenders require homeowners to purchase a home insurance policy and for good reason – standard insurance plans come with a range of coverage options that protect you in a variety of scenarios. One example of circumstances that benefit from the ownership of home insurance is a slip and fall accident.


If a neighbor, stranger or friend slips and falls on your property and holds you responsible, you have two financial safety nets through your homeowners insurance: personal liability protection and medical payments coverage. Which type of insurance protection will qualify you to file a claim is all dependent on whether there’s a lawsuit.

Personal liability coverage

 

Personal liability insurance protection is the part of your policy that covers you if the injured party decides to sue. Liability coverage will protect you during most instances when you’ve sued. Typically, your policy will allot you a minimum of $100,000 per claim for legal defense, although this amount varies from policy to policy.


Certain exclusions apply – liability won’t provide you any financial aid for lawsuits pertaining to mental, physical or sexual abuse; the sale, manufacturing or distribution of a controlled substance or the transmission of a communicable disease. In other words, criminal activity won’t qualify for defense money, but normal mishaps, such as a dog bite or your average slip and fall accident, will probably leave you eligible to file a claim.


If you feel like you’re at particular risk for lawsuit, you can always look into taking out an extension on your liability coverage, which typically starts at $100,000. Homeowners with large dogs or swimming pools can and should purchase greater liability coverage limits.

Medical payments coverage

 

Medical payments coverage, frequently referred to as MedPay, is the alternative to personal liability coverage if someone has experienced a slip and fall accident on your property. MedPay is the portion of your insurance policy that will qualify you for a claim if no lawsuit is filed. For example, if the mailman trips on your front steps but doesn’t want to sue, MedPay can help with his medical expenses. Policies typically start with $1,000 per injured person. You can also choose to purchase higher limits, if you like.


When it comes to slip-and-fall accidents, look to your homeowners insurance policy. Regardless of whether the injured party decides to sue, you have options. Your insurance can provide you financial aid for the person’s medical expenses or your legal defense if a lawsuit is filed. Alternatively, if you’re the person who fell but you don’t want to bankrupt the responsible party, recommend that he or she take a look at his or her home insurance policy. With adequate coverage, you’ll get the funds you need and the other person will be able to afford all your costs. Call a licensed insurance agent today to learn more about home insurance coverage. Ask about the types of protection typically included in a standard policy. You’ll find that you’ll likely receive coverage for things such as fire and theft but also for legal defense if you get sued.

source:  http://homeinsurance.com/blog/2013/01/04/how-liability-insurance-can-protect-you-in-a-slip-and-fall-accident/