Ask An Expert : Mike and Taci – RBC Mortgages

Hello everybody, Kelsey Adam with the Kelsey Adam Real Estate Team a part of Century 21 Accord Realty Coming to you with our ask an expert segment and today, we've got a couple Mortgage Specialists with us

So we have Mike Kesslar, and we have Taci Holden from the RBC Howdy All right, okay? We're gonna get in some some mortgage questions because in our business and real estate and also in, of course, in banking We have a lot of mortgage questions that people do come up with So, I guess just kind of starting out with Taci, what are some of the things that as a mortgage specialist that you look for from somebody who's coming in to apply for a mortgage? For sure, so, the biggest thing we will be looking for is Your down payment saved up we are always looking for a minimum of 5% saved up for your down payment When you're coming over to see us We're also looking for you to bring some documents with you as well, too So that's kind of documents

What kind of things in particular? For sure, so we're looking for for pay stubs We're looking for possibly an employment letter T4's, taxes that type of thing Usually a couple years of that is it's just a good start, and then we can go from there So and then as far as on the document side the down payment we're looking for, you know, statements of where that down payment saved up is at All right so when we're talking about the 5% down payment , Mike Do you have to be the first time homebuyer for a 5% down payment or what? What are the stipulations of that? We get that question a lot Kelsey the 5% down payment program is not exclusively for first time buyers It used to be

Long long time ago now the 5% down payment program is reserved for people who are buying their primary residence so if it's the house that you're gonna live in You're eligible to use 5% down Doesn't have to be your first house, It could be your 8th house Th stipulations are that it's the only house you own that you're living in but you can the do 5% down for anyu purchase You can own the other houses, but then your down payment is higher if you're buying a rental house There's a lot of stipulations, rental houses for instance if you're renting a property you wouldn't need to have 20% down through the Royal Bank, but every scenario is slightly different, always have to ask your specialist So Taci, we were talking about a down payment sources can you elaborate a little bit on what is allowed for for somebody to have as a down payment? Absolutely so of course just in general any type of account that you've saved your money up in your checking/savings account We can use for first-time homebuyers, you can go up to 25,000 per person from your RRSP's So that's a nice benefit

You gotta pay that back eventually though? You do you do but you get fifteen years to pay that back so lots of time to put it back and Other than that youcan also use tax-free savings account, checking's as well as lastly of course Being gifted from immediate family as well too So gifts are okay now Sometimes people get a big tax refund and can that form part of the down payment For a house? Absolutely Does that have to be in the account for a particular time frame Some stuff does, for something like that we can verify this source of where the funds are from So something that that would be okay Right on, Mike We've been hearing a lot about this this stress test on mortgages What can you enlighten us about that? The stress test, that's an important part of making sure the Canadian government, and then us in the banking industry are making sure that people can stay in their homes if interest rates increase So the essence of the stress test now is we have a look at the mortgage application we look at what the mortgage payment is going to be right now with current rates The stress test part is we actually will take the interest rate that they currently have add 2% to it and calculate what the payment is as if the payment was 2% higher and we make sure they can qualify with that payment

Because currently in our market, We know that there's going to be some pressure to have interest rates increase perhaps this year We don't know for sure, those are all unknowns A litle bit of a safety net When you come up for renewal in three years or four years or five years, and if interest rates have increased We don't want you to have to sell your home because you can't afford to do payment so that's what the stress test is for us just to make sure that you're comfortable if payments go up So Taci, what have interest rates been doing over the last a little while? Sure so so last spring We were still seeing really really good rates then Really from September to even now really we've had a couple jumps in fall and then in the last couple months It's been fairly steady, a little up and downs But fairly steady since December now So good all right so Mike Can you explain to us what is default insurance on mortgage? Well, default insurance is a An insurance policy that's added to the mortgage by an agency like CMHC It's for mortgages where your down payment is less than 20% And it's insurance that guarantees that the bank is going to get the funds And it's a program that the Canadian government has put together to allow people to have smaller down payments without risking the banking industry It's added right to the mortgage

It's not an extra cost that you have to pay out of your pocket and the Percentage of the fee is based on the how much down payment that you have So CMHC stands for Canadian Mortgage and Housing Canada Mortgage and Housing Corporation

An amazing website go to CMHCCA has incredibly information for anybody buying house whether it's the first time you bought house the tenth time you bought a house Whether you have a 5% down 15% or 50% down the information on there is amazing, very thorough, very clear and concise So we all get really good advice from our neighbor Bob and Uncle Bill And all those other sorts of people and all Taci, where where should we really go to for our mortgage advice? Absolutely Still come see Mike and I We're always around Even if even if you don't feel like you're ready yet to buy a house even if it's six months out It's a couple years out

We will be happy to sit down with you, put you on the right track to get there So it's not painful to come into you guys you don't squeeze blood out of everybody now, I guess People are scared you're going to go into well What if they don't what if I don't qualify? You know so is there something that you guys can help do if they come in and say you know? But you don't quite qualify Can you say well, but here's some things you can do moving forward of course? That's I mean That's and that's what we do with them And you do the same in your industry as well to account see when people are thinking About getting ready to buy a house you put them on the right path and we do the same thing with people when they're looking at mortgages This is where we need to go, so what we need to do to improve your credit score, Tthis is a good way to save for your down payment These are the options that you've got and these are the prices and Perhaps the mortgage payment amount that you're looking at if you're looking at that kind of world All we can do is give people a lot of advice and guidance people Determine whether they're going to follow that device or that advice yeah, but We're always available

You can get all of us through RBC's website Taci and I have facebook pages that you can look for us through So they're not scary They don't yell, they don't bite Go and see a mortgage professional Before you as soon as you're looking in and Deciding what kind of home we're gonna buy

It's not only what kind of home you can buy, but what kind of home can you that you can afford All right, so that's another segment of ask an expert I'd like to thank Mike Kesslar and Taci Holden joining me from the RBC For now this is Kelsey I'm from the calcium real estate team a part of Century 21 Accord Realty

Have a great day!

Source: Youtube

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