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Archive for the ‘Mortgage Lender Program Specifics’ Category

Large Mortgages – Sliding Scale – When Trouble Sets In

Friday, April 16th, 2010

Large mortgages present unique challenges in the Canadian Mortgage Market. Sliding scales, director approval, multiple reviews, it all adds up to difficultly getting larger mortgages approved. If you’ve found getting approved for a large mortgage is causing you trouble, watch this video:

Transcription of Video Blog:

Hey everybody, Rowan Smith of the Mortgage Center. I want to talk about large mortgages. Different cities across the country face very different property values from Vancouver, Toronto, versus somewhere in Manitoba or what not could face a 10 fold price difference. So when someone’s buying a home in Vancouver, I often will hear people remark “Well, how did that person get that mortgage?

How did they get it approved?” They’re looking at a home that’s $1.8 million and they know the person only put $400,000 down so how did they get that $1.4 million mortgage?

Well, for starters they probably had a heck of a lot of income, a lot of job security and a lot of fallback position. That’s other assets, things like RSPs, shares in other companies, stocks, bonds, mutual funds, all the like stuff, that type of thing. So in the event that something goes south in the mortgage they can always go back to those fallback position resources to draw funds to make the mortgage payments.

So it’s more a financial debt. So if someone you’ve heard of has a $1.4 or just basically anything over $800,000 of mortgage, they probably are very financially sound and have very good income. Now, where this comes into play is when you’re looking to buy a high end home the rule is 5% down, so most borrowers think “Well, if I can put 4% down, then I should be able to qualify.”

When you get up that high and I’m talking a balance $800,000, $900,000 up over a million bucks, you’re not really just facing one person who has to approve that deal. At that level you’ve got to get managerial approval at the bank. You probably have to get approval at the insurer. If it’s CMAC insured, you’re definitely going to have to get managerial approval at that level. If it’s even a bigger mortgage $1.5 and $1.6 million it’s going to go to the national director.

So there’s a lot of hurdles to jump through. So if you’re looking to buy a larger or rather a higher end home, you’re going to want to get more days for subject approval. Typically I ask my borrowers for four to five business days. Saturdays and Sundays don’t help us because the banks aren’t working on those days.

So if you write the offer on a Tuesday, get until the following Monday in order remove your subjects. That’s for a standard purchase. If you’re purchasing something that’s a high end home where you’re going to need a mortgage in excess of $800,000 to $900,000. if that’s the situation you better get 10 business days.

Usually the sellers of those homes understand that putting financing together for a home of the magnitude you’re purchasing is more difficult. Giving longer subject removal periods of time, even in the hot market in Vancouver hasn’t been that difficult if it’s justified.

So if you have anybody looking for a high end home, I can help them arrange the financing. Sometimes we can dot our I’s and cross our T’s in advance of them actually writing the offer so there’s much smoother and a clear picture whether or not it’s going to go through in the first place.

For the Mortgage Center, I’m Rowan Smith.

“My Lender is Who?” – Why We Use the Lenders We Use

Tuesday, March 9th, 2010

I get frequent questions from clients that say, “my lender is who?” and it is usually because they aren’t familiar with a broker-only lender and there are a LOT of broker only lenders. This video blog explains why we use them instead of the big banks 100% of the time.

Transcript of Video Blog:

Hi, everybody. It’s Rowan Smith from the Mortgage Centre. I want to address a couple of questions that I’ve received on some of the lenders and how we brokers make our decisions as to which lender we’re going to send you with.

By and large, we brokers are paid approximately the same at most lenders, if we’re offering the competitive market rates. We generally have a list of maybe four or five, kind of our top five, and those top five vary from broker to broker.

It’s one of the reasons that we get differentiated, is our service level. We typically like to use institutions who have a very fast turnaround, who will get back to us quickly, who will answer their phone and who will accept more common practices in the industry.

A couple of questions people brought up were — I’m going to grab a couple of different lenders that we use — who is McCory Financial, or who is FirstLine Mortgages? Because these two institutions play a pretty big role in the market right now, and a lot of people don’t know who they are.

Many of my clients have been placed with them. I, myself, have two mortgages with FirstLine Mortgages, and I have no problem placing clients with them. So, who are they? FirstLine is a division of CIBC. They’re a subsidiary of CIBC, one of the big banks in the country, and they’re just a different channel.

Certain banks have made a decision to try to get business from the branch network, to try to get business from brokers. Because we’re one arm of business, they don’t have to pay us a salary. We’re paid a one-time commission, so there’s only a cost if we do a deal with them. And for that rate, they can offer very, very low rates.

Some of these non-retail lenders, like FirstLine, are very efficient at what they do. The only thing they do are mortgages. They don’t want your direct deposit for your payroll, any of that other stuff. They just want the mortgage. That gives them a lot of efficiencies that perhaps some of the other big banks don’t have.

So, who are all these banks? Because you’ll see on my web page and a lot of my advertisements, it’s 40-plus lenders. If I challenged every one of you to name as many banks and credit unions as you could, I’d be impressed if you could come up with six or seven. We have many, many lenders.

An example — ING Direct. People often say to me, when I place them with McCory or I place them with FirstLine or something like that, is it really secure being with them? A lot of people invest with ING Direct, who does not have retail branch locations, or they have maybe one in two or three major cities in the entire country.

I’d be much more leery of where I was putting my cash-invested dollars, rather than where I’m borrowing from. Should one of those lenders go under, at the end of the day, there’s going to be another lender behind them that will take over the mortgage. You’ll continue to make your payments. And the transition, while perhaps not seamless, will nonetheless not make you be foreclosed on, or lose your home or any of the doom and gloom that some people are predicting.

If we give you a great rate, and you ask us who the lender is, and it’s someone you haven’t heard of, that may be because it’s a promotional rate and the lender’s trying to gain market share. Also, very likely, they’re probably owned behind the scenes by one of the big financial banks, anyway.

So, if you, or someone you know, is getting put with a lender that they’re not familiar with, and maybe you’d like some information on what that lender is, who they are, how long they’ve been around in the market, give me a call. It’s Rowan Smith at The Mortgage Centre.

Promotional Rate – What is a “Quick Close” or “Live Deal Only” Rate?

Monday, January 4th, 2010

I get calls almost once a day about our “best rates” or “promotional rates” that we advertise. We are forced to advertise these rates because other brokers and banks do, but the reality is that there are often “hidden costs” or rules that apply to these products. Watch this video blog to see how and when these rates (and rules) apply:

Video Blog Transcription:

Hey everybody, it’s Rowan Smith from the Mortgage Centre. I want to talk about some promotional rates and “quick close” specials and “live deal only” specials that you might have seen advertised on my website, on other brokers’ sites, and I want to explain exactly what these mean.

The first thing is, what is a live deal? A live deal is a deal where you have an accepted offer. You’ve had your price is accepted and you have it back in writing that your price is accepted, and you’re in that period of time that you are trying to arrange your financing.

Now a lot of institutions, when they issue a pre approval, they do so and there is a cost to them because they have to “hedge” using financial derivatives to make sure that the rate they’ve promised you today isn’t substantially lower than what they could get sixty, ninety, or one hundred and twenty days from now when you actually write and offer on a place. So when you call me up, or you call your own broker, or you call your bank and they say, “listen, that rate isn’t available for pre approvals, it is only available for live deals,” then that’s being done because this institution has offered a lower rate on the understanding that they only thing they’ll being reviewing and spending time on is a live deal: a deal with an accepted offer.

So, from time to time you’re going to see us post quick close specials and it’s usually 30 to 45 days from the date we (mortgage brokers) submit to the date you complete. So that doesn’t mean you have 45 days to find a place. That means, from the date we hit submit on our computer – and that may be a day or two after your accepted offer depending on how fast your broker moves – you’ve got 45 days to CLOSE on that transaction. For many institutions, it is as few as 30 days. So you need to be on the ball to get your documents in order – I can help coach you with that you let you know what you are going to need to make those deadlines. 30 days is more than enough time to arrange financing on a purchase. The only time it wouldn’t be is if the actual purchase itself is closing further out or if things get bumped back due to mitigating circumstances, or maybe your inspection shows you something else you don’t like, and you need to bump dates back.

So, if you see those (mortgage) offers, give us a call. We can clarify what exactly we are dealing with. In a lot of cases there are also some things you give up to get that ultra ultra low rate. You may give up pre payment priviledges such as weekly or bi-weekly payments. You may give up the lump sum priviledge to pay between ten and twenty percent per year – penalty free – against the mortgage. Before you take oe of these promotional rates, or before you sign into the lowest rate that you’ve see advertise anywhere, find out why it’s so low. There is usually a reason. Sometimes it could be the year end for a particular institution and they are short of their annual targets so they become very aggressive. Other times, it could be exactly what I’ve said before: that it’s a “live deal only” offer with an accepted offer, or that it has to close with 30 (to 45) days.

I’m Rowan Smith from the Mortgage Centre.

No Money Down Mortgage / Zero Down Mortgage

Tuesday, October 6th, 2009

Most of the public is unaware that no down payment or zero down mortgages still exist. On October 15, 2008 the rules passed by Canada’s finance minister took effect, and the existing no money down program was canceled. However, only that one program was canceled.

There IS another way…

There are a few banks that will “give” you 5% of the purchase price allowing you to get 95% financing. This program is called “flex down” and here is how it works:

1. You pay posted rates instead of discounted

2. The cash is given to you at closing allowing you to put it as the 5% down payment

3. You need to show cash assets of 1.5% of the purchase price of the home to prove you can afford to close on the transaction

4. Still need a deposit!

5. You pay higher CMHC fees

POSTED RATES:

In mortgages, as in all other elements of business there is no such thing as a free lunch. The 5 year posted rate is 5.49% as of today, with discounted rates in the 3.89% range. You will need to pay the higher 5.49% rate. This way, the bank recoups it’s 5% gift of money that it gave to you over the 5 year term. And yes, you MUST take a 5 year fixed term. It doesn’t matter if you only want a 3 year, or a variable rate, you MUST take a 5 year fixed term at posted rates. In this way, the bank is getting the 5% back from you spread out over the 5 years.

Think of it as forced savings of the 5%, but you get to live in the home while you save!
CASH GIVEN AT CLOSING

The 5% cash gets sent to the lawyer’s office handling the transaction. Then, the mortgage money shows up for the other 95% and the house is yours!
NEED TO SHOW 1.5% CASH ASSETS

The bank needs to know that if they give you the 5% that you can still put up some money to cover property transfer tax (if applicable), move in costs, utility transfers, etc… WITHOUT borrowing the money. You’ll need to show 1.5% of the purchase price of the home in an account in your name. How it got there isn’t an issue. It just has to be in your account.
STILL NEED A DEPOSIT

When you write an offer, you will still need to have money to give as a deposit. This is generally considered “good faith money” as it is non-refundable. Typically, it is customary for the deposit to be 5% of the purchase price. However, this is just CUSTOMARY. You need to tell your realtor that you need the deposit loan as low as possible ($1,000 or $5,000) and you need to be able to write this cheque! You can get it on a visa cash advance, borrow it from friends or family, or what have you.

Remember, you will get it back at the closing date when the bank’s 5% shows up but you still need it in the interim and this is an often forgotten element to no money down purchases.
HIGHER CMHC FEES

Whenever you put less than 20% down on a purchase you face CMHC fees. They are government mandated fees, and you can find out more about them and what they are by doing a search on my blog for “CMHC fees” as I’ve written several articles explaining them.

When you do a “flex down” purchase or no money down, the CMHC fees are 2.90% base instead of 2.75% base and they are BUILT INTO THE MORTGAGE – meaning you don’t have to write a cheque for them up front.

THAT’S IT!

I’m working on two of these deals for clients as I type this blog entry, and both are getting approved. So, if someone says zero down or no money down mortgage isn’t available, give them my contact info and I’ll get them set up!

Thanks again, and happy house hunting!

Watch Out For “No Frills” or “Value” or “Basic” Mortgages with Great Rates but NO Flexibility

Saturday, April 25th, 2009

Well, it’s happening again… In a bid to get more mortgages, some lenders are now offering super low rates on their 5 year mortgage, but are eliminating the pre-payment flexibility and payment options in a quest to entice people to get their mortgages.

For example, one lender is currently offering 3.59% on a 5 year mortgage. With everyone else at 3.69% or 3.79% it sounds like a great deal. As people, we like to have clear things that we base decisions on, and numbers represent something that we can all “hang our hat on” and understand. So, to the average person 3.59% sounds better than 3.69%, right?

Not necessarily.

Oftentimes, lenders have a number of restrictions with these mortgages that they dub as “No Frills” or “Value” or some other such moniker that, on the surface, to the average consumer, sounds great. There are “no free lunches” in banking and finance, and the banks aren’t stupid. They may offer a better rate, but they always get you in the end.

When we dig a bit deeper into these rate offerings we often (but not always) find one or more of the following restrictions:

1. ONLY Monthly payments are allowed. Bi-weekly payments may not be allowed and/or

2. NO pre-payments or lump sum payments are allowed AT ALL, or

3. NO pre-payments or lump sums are allowed unless there is a penalty, or

4. NO increases in payments are allowed

5. Mortgage may be fully closed to refinancing with anyone except the currently lender thus limiting refinancing options and choices of rates in the market.

6. Larger than normal penalties (possibly up to 6 months interest – or more – depending on the specific offer)

Most people look at the low rate and think to themselves, “well, I plan on living there for 5 years and then I can pay it off and have no penalty at that time.” In a perfect world where things like unexpected new spouses, new children, job transfers, and upgrades to larger homes don’t occur, this is fine. But, as they say, “Shit Happens,” and oftentimes the flexibility you don’t think you need becomes the flexibility that you gave up and pay heavily for down the road.

Let me explain an all-too-common situation. An applicant comes to me and I sell them on a NON No-Frills mortgage. This means they may get 3.69% instead of 3.59%. However, when I talk about pre-payment they block me out and really just focus on the stick price (the rate) to the exclusion of all else. Let’s further assume they are a young couple that is 27 years of age buying a one bedroom apartment. They insist on the 3.59% rate as it “saves them money.” How much money?

Well, assuming their 1 bedroom is $300,000 and they put 5% down, the savings for 3.69% and 3.59% is $16.92 per month. “That will buy me lunch once a month!” they are often heard to quip. If this is a 5 year term, they will save $1,015.20 over a 5 year period of time. Sounds good?

Well, they happen to be in the age that is most likely to need to buy a larger home (possibly having a child or pet or just wanting to upgrade). So, two years down the road, their mortgage is down in the $285,000 range and they see a place that is a STEAL and want to upgrade into it. They need to borrow $100,000 more, however, as this unit is more expensive. So they call the bank and find out that their penalty is 6 months interest instead of the standard three months. Had they taken a normal mortgage their penalty would be $2620 (approximately). However, as they opted for the low rate mortgage with “No Frills” that happened to have larger than normal penalties, they now face a penalty of $5,240 and this choice cost them $2,620 in exchange for a FIVE YEAR savings of only $1,015.20!!! Clearly, they would have benefit ted from a little more flexibility.

Some people will say, “buy MY bank doesn’t charge a higher penalty.”

Ok, this may be the case. However, most banks (at least any that I will sell a mortgage for) allow 20% of the “Original Mortgage Amount” to be paid out PENALTY FREE throughout the year. So, if their mortgage was originally $300K (for example) they can pay up to $60 penalty free. So here is the penalty the person with the ultra-low rate took will face:

Three months interest on the outstanding $285,00 balance
$2,620

The penalty someone with a normal mortgage will face is as follows:
$0 penalty on the 20% they are allowed to pre-pay ($60,000)
$2,004 three months of interest on the remaining $225,000

The savings to paying out the NORMAL mortgage versus the No Frills mortgage is $616.

“But I saved $1,015.20″ someone exclaims.

No you didn’t. You only got that savings if you carried the mortgage to the full 5 year term. If we are 2 years in (of 5) you’ve only saved 2/5 of $1,015.20 or in other words $406.08 so again, the person with the normal mortgage wins.


THIS IS GETTING COMPLICATED

If there is one thing I want you to take away from this post it is this:

THERE IS MORE TO A MORTGAGE THAN THE RATE!

There are a lot of ways that banks get their profit, and a lot of it happens behind the scenes on the “back end” of a mortgage during payout.  I’ve provided a couple of basic examples of where the No Frills mortgages are harmful, and in my time as a broker, I’m yet to see a person for which they are well suited. I’ve never sold one yet. That isn’t to say that I won’t but that I will make damn sure it is the right product, for the right clients, and that they understand that there is more to this sophisticated and complex transaction than the sticker price (the rate).

Until next time, watch out for these products! If you see a rate you want me to dig into the terms for, let me know, and I’m happy to oblige.

Sub Prime Mortgages in Vancouver Failing to be Renewed – Foreclosure Follows…

Saturday, March 28th, 2009

So everyone was worried that a sub-prime problem would rear it’s ugly head in Canada much like it has in the US. I, for one, didn’t think the same price crashing and defaults would occur. However, the sub prime market has had a different effect in Canada. Lenders that made sub-prime loans are unable to get the money back for clients are renewal, meaning people that had sub-prime mortgages are unable to renew them with their current lender. Many borrowers were sold a bill of goods whereby they figured that after 3 or 5 years they could get out of their higher-rate sub prime mortgage, and into a conventional mortgage with their bank. However, market conditions have changed, and most clients are unable to get into a new mortgage.

In light of these developments, the lenders that did sub prime loans have approached the government with the goal of getting some government backed funding to assist homeowners in this situation. I applaud their effort, but feel they have done an injustice by funding mortgages they weren’t sure they could renew. The first signs of distress have occurred with lenders foreclosing on borrowers who have made every single payment on time. It was featured last week on the front page of the Vancouver Sun, and now the Globe and Mail has caught wind of the story as well.

Below is an article that appeared in the Globe and Mail on March 26th and was written by Greg McArthur and Jacquie McNish. I have reproduced the article in full, and it is entirely their work. I felt it was a realistic look at what is going on in the market and being largely unreported (so far) by the main stream media.

_________________ Begin Article _________________

As many as 25,000 Canadian homeowners who consistently met their mortgage payments could lose their homes unless Ottawa or other financial players help supply capital to the struggling subprime lending market.

A loose network of about 12 alternative mortgage lenders began lobbying the Prime Minister’s Office and the Department of Finance in January about what they say is a looming problem: An estimated $3-billion to $5-billion worth of subprime mortgages are coming up for renewal over the next four years, and the lenders say they can’t renew them because capital has dried up for higher-risk borrowers.

“These are hard-working Canadians who could face foreclosure on their homes if they are unable to renew or find mortgage financing,” said Paul McGill, the CEO of the N-B Group, an alternative mortgage lender that has been spearheading the campaign.

These mortgages were arranged in the headier times of the early 2000s, when investors easily bet money on complex securities backed by mortgages. Many investors were comfortable investing in securities with subprime mortgages because of the higher returns these investments offered. The torrent of money flowing into securitized investments, such as asset-backed commercial paper, allowed a new generation of lenders such as Toronto-based Xceed Mortgage Corp. and U.S.-based Accredited Home Lenders Inc. to offer mortgages to people with credit score blemishes.
A Ladysmith, B.C., property in foreclosure this month. A recent spike in foreclosures in Western Canada could spread across the country over the next four years.

A Ladysmith, B.C., property in foreclosure this month. A recent spike in foreclosures in Western Canada could spread across the country over the next four years. (Deddeda Stemler for The Globe and Mail)
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When the global credit crisis struck in August 2007, investors fled mortgage-backed securities, forcing subprime lenders to turn to more conventional securities such as Canada Mortgage Bonds, which the Canada Mortgage and Housing Corporation administers. Because Canada Mortgage Bonds require borrowers to meet higher credit standards to qualify for their investment program, subprime homeowners who got mortgages a few years ago are on the verge of being orphaned.

Executives with subprime lenders said they have been unable to tap alternative sources of financing for the stranded borrowers. Unless Ottawa steps in to help support the homeowners, for example by buying or backstopping the loans, they warn that thousands of homeowners will lose their homes through foreclosure or power-of-sale proceedings

“The bottom line is, these people made their payments,” Mr. McGill said in an interview, repeatedly stressing that the number of affected homeowners in Canada – tens of thousands – pales in comparison to the subprime lending crisis in the United States. “It’s not dismal. It’s a problem that needs to be addressed.”

Ottawa has put forward no formal proposal, Mr. McGill said, adding that he couldn’t specify what kind of solution the lenders have in mind because the process is at such a preliminary stage.

Some subprime lenders, such as Xceed Mortgage Corp., say they have been forced to start foreclosure proceedings on customers who were current with their payments for this very reason. Ivan Wahl, chief executive officer of Xceed, said the company has initiated foreclosure proceedings against 200 homeowners, mainly in Ontario and Quebec, because the company was unable to find new money to lend to them.

He said another 1,200 of his company’s mortgage customers will be in a similar predicament over the next four years.

“They upheld their end of the bargain by making their payments. It would be fantastic if Ottawa stepped in, even temporarily, to help provide capital. The initial indications are that [federal government officials] are receptive.”

Two weeks ago, The Globe and Mail reported that foreclosures in Alberta and British Columbia have spiked, with Alberta’s foreclosures on pace to double from two years previous – to 5,300 in the first 11 months of 2008-09 from 2,510 in 2006-07.

Subprime lenders initiated about half of the foreclosures in Western Canada in 2008, although they held, at peak, only about 5 to 7 per cent of the market share. It’s not known how many of these foreclosures were launched against homeowners who were up-to-date on their payments.

In the current depressed housing market, foreclosures can be devastating to lenders because they can be forced to sell homes for less than the value of the mortgage debt.

The group of subprime lenders has enlisted lobbyist Kaylie Wells to negotiate with the federal government, according to records with Canada’s lobbying commissioner. In late January, Ms. Wells organized meetings with two policy analysts in the Department of Finance, Andrew Wallace, a policy adviser in Prime Minister Stephen Harper’s office, and Neil Desai, the manager of the Prime Minister’s Office.

“We are listening to a broad range of stakeholders on a broad range of topics,” said Chisholm Pothier, a spokesman for Finance Minister Jim Flaherty. “We’ve been clear that access to credit is among the top issues facing this country.”

He added that the federal budget contains “unprecedented measures” to provide financing. “Through the Extraordinary Financing Framework, we are making $200-billion in capital available to facilitate the flow of credit through the capital markets to lay the foundation for recovery.”

Among the measures the government has taken, Mr. Pothier said, were reducing the maximum amortization period for new government-backed mortgages to 35 years; requiring a five per cent minimum downpayment; introducing new loan documentation standards; and establishing a consistent minimum credit score requirement.

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Green Mortgages. What are They?

Monday, September 15th, 2008

With the social pressure strongly in favour of “going green” and “green marketing,” several lenders have stepped up to the plate with offers that are environmentally focused in an effort to differentiate themselves from the competition. This brief article is going to first outline what a Green Mortgage is, and then to look at the offers of three different lenders.

What is a “Green Mortgage?”

As a Vancouver Mortgage Broker, I can personally attest to the fact that I use a TON of paper. I am far, far more environmentally conscious and digitally-based than many of my peers, but our office has a back-up policy that all files need to be in paper form. I do my best to only print off the necessary documents for storage, and still find that an average file is 30 to 50 pages with more complex files stretching up to 200 pages or more. This is a lot of trees being killed just so someone can borrow money. In the digital age, I keep ALL documents in a digital form, and if compliance would allow, would no longer print paperwork. However, this is the only contribution that I can realistically make. The rest as the fall to the lenders. In the case of the banks and lenders, a Green Mortgage is one that comes with benefits for energy efficient housing, cashback options, rebates for buying energy efficient appliances, and in some case, better rates (or fees) on your home purchase or refinance.

The three institutions that I will focus on, and this is NOT an exhaustive list (just three companies whose green products I tend to like), will be:

1. CMHC (Canadian Mortgage and Housing Corporation)

2. Citizen’s Bank / Vancity

3. TD Canada Trust


CMHC (Canadian Mortgage and Housing Corporation)

People purchasing a home with less than 20% are required to pay CMHC Insurance fees. On a typical $400,000 home purchase with 10% down payment these fees are $7,200 for a 25 year mortgage up to $9,360 for a 40 year mortgage. CMHC (and other insurers) have an Energy Efficient rebate program whereby you can qualify for a 10% premium refund AND you can get a 40 year mortgage for the premium that you would pay for a 25 year mortgage. This is a substantial savings on CMHC fees that often equals a few thousand dollars.

What do you need to do to qualify for the energy efficiency rebate?

1. Buy a home that is rated 77 or higher on Natural Resources Canada’s energy assessment scale, or buy a R2000 certified home (you can find out the energy rating of your home by contacting a local building inspector and getting an energy efficiency test in your area).

2. If you already have a CMHC insured mortgage, you can improve your home’s efficiency by 5 points to a mimimum rating fo 40 and also get the rebates / refunds.

Not all banks support this initiative, so you will need to talk to your mortgage broker to determine which banks has the best terms AND is a green mortgage provider.


CITIZEN’S BANK / VANCITY

First launched some time in 2007, Citizen’s bank was an innovator in this field. Part of their green mortgage program includes flexible payments options, a choice of financing including a $10,000 line of credit at prime rate (upon approval) as well as the following bonuses:

- A Blue curb side recycling box
- Compact flourescent Ener-lights
- Coupons for energy efficient products and appliances from local businesses
- A complimentary Green$avers Home Energy Audit ($250 Value) which will give you an overall picture of how you are using energy in your home, identify key problem areas and give you steps to take to correct them.

The benefits are a lower energy bill each month, cleaner indoor environment, and doing the right thing for the environment which benefits us all.
TD CANADA TRUST:

“The Big Green Machine” as I like to call them, has REALLY stepped up in the Green Mortgage arena. Not only is TD’s marketing focused on green (just look at their signage!), but they also have developed a really good program.

TD will rebate up to 1% of the amount of the mortgage or fixed portion of a HELOC (Home Equity Line of Credit) when you make ENERGY STAR qualified purchases.

You will receive a 1% discount off their posted 5 year mortgage rates.

They will also donate $100 to the TD Friends of the Environment Foundation.

If you have an existing TD mortgage or HELOC, you can refinance it into this product and offer.

This next section on the rebate is right off their website:

HOW THE REBATE WORKS:

For example, say you obtain a Green Mortgage for $200,000 and the posted five-year fixed rate is 7.44%. Your interest rate is discounted to 6.44% . After you obtain the Gree Mortgage, you then upgrade your kitchen and spend $3,000on a new dishwasher and refrigerator, both ENERGY STAR qualified. Next, you submit your receipts to TD and after validating them, we credit you the maximum rebate of $2,000 ($200,000 x 1% = $2,000). At the same time, they make a $100 donation to TD Friends of the Environment Foundation.

See the chart below for more examples of how the rebate works:

Green Mortgage or HELOC Amount          Eligible Rebate           ENERGY STAR Purchases         REBATE

$200,000                                                  $2,000                       $1,500                                     $1,500
$300,000                                                  $3,000                       $3,500                                     $3,000

To find out if the appliances you are buying are ENERGY STAR compliant, go to the Natural Resources Canada website or call  1-800-O-Canada (1-800-622-6232).
So there are three offers or going GREEN in the mortgage market, and three companies on the vanguard of the change. If you want more info on them, please give me a call at 604-657-6775 to see if there is a way I can ensure you are qualified for the rebates and savings.