The current economic landscape can be challenging for young Canadians to navigate as they face great uncertainty with heightened interest rates and inflation. It can be frustrating as they are just starting to build their career, considering buying a home or starting a family. If you are a parent, you may be thinking about how you can help your child during this period. The CHIP Reverse Mortgage by HomeEquity Bank is a sound financial solution that can help you support your loved ones by providing a tax-free gift.

The Gift of Early Inheritance 

As a parent, you may want to provide an early inheritance to see your adult children use the funds to improve their lives in a time of need. By giving an early inheritance, you can avoid probate fees (estate administration tax) and save money by bringing you to a lower tax bracket*. With an early inheritance, your children can pay for their wedding, start a business, pay off student loans, make a down payment on their home, and much more. Speak to your tax specialist for more details.

How the CHIP Reverse Mortgage Works

You may have heard of people using a home equity line of credit (HELOC) or liquidating their investments to gift an early inheritance. However, there are disadvantages associated with loss of earnings or tax payable when it is time to sell their investments. The CHIP Reverse Mortgage by HomeEquity Bank allows you to unlock up to 55% of the equity in your home without any of these challenges. With the CHIP Reverse Mortgage, your investments remain intact, and no monthly mortgage payments are required. Therefore, your income is not affected, and best of all, the money you get from the CHIP Reverse Mortgage is tax-free!

If you want to provide a tax-free gift to your children, contact me for details on how the CHIP Reverse Mortgage by HomeEquity Bank can help you.

*HomeEquity Bank requires all clients to receive independent legal advice to review the mortgage contract and ensure they fully understand the terms and conditions.

Written by DLC Marketing Team

If you are looking to buy a home or want a current value of your property, you will need an appraisal.

Before banks or lending institutions can consider loaning money for a property, they need to know the current market value of that property. The job of an appraiser is to check the general condition of your home and determine a comparable market value based on other homes in your area.

While you may think “it is what it is”, we actually have a few tips that can help improve your home’s appraisal to ensure you are getting top market value!

1. Clean Up: The appraiser is basing the value of your property on how good it looks. A good rule of thumb is to treat the appraisal like an open house! Clean and declutter every room, vacuum, and scrub to ensure your home is as presentable and appealing as possible.
2. Curb Appeal: First impressions can have a huge impact when it comes to an appraisal. Spending some time ensuring the outside of your property from your driveway entrance to front step is clean and welcoming can make a world of difference.
3. Visibility: The appraiser must be able to see every room of the home, no exceptions. Refusal to allow an appraiser to see any room can cause issues and potentially kill your deal. If there are any issues with any spaces of your home, be sure to take care of them in advance to allow the appraiser full access.
4. Upgrades and Features: Ensuring the appraiser is aware of any upgrades and features can go a long way. Make a list and include everything from plumbing and electrical to new floors, new appliances, etc. This way they have a reference as to what has been updated and how recent or professional that work was done.
5. Be Prudent About Upgrades: While the bathroom and kitchen are popular areas, they are not necessarily the be-all-end-all for getting a higher home value. These renovations can be quite costly so it is a good idea to be prudent about how you spend your money and instead, focus on easy changes such as new paint, new light fixtures or plumbing and updated flooring to avoid breaking the bank while still having your home look fresh.
6. Know Your Neighbourhood: You already know where you live better than the appraiser. Taking a look at similar homes in your neighbourhood and noting what they sold for will give you a ballpark. If your appraisal comes in low, you will be prepared to discuss with the appraiser the examples from your area and why you believe you property is worth more.
7. Be Polite: The appraiser is there to get in and get out. Avoid asking them too many questions or making too many comments and simply be prepared should they have questions. Once they have completed the review of your home, that is a good time to bring up any comments you might have.

Don’t forget to contact me if you have any questions about your existing home or mortgage, or if you are looking to sell and relocate in the future!

Written by DLC Marketing Team

If you are a self-employed client who owns your own business, you may have chosen to set that business up as a corporation. This means the business operates as essentially its own person. They have income through business revenue and expenses from marketing costs, materials, office space, etc.

When it comes to getting a mortgage, there are a few benefits to putting that mortgage under the corporation instead of your individual self:

1. Corporations tend to pay a lower tax rate than the personal income tax rate and only pay taxes on the net business income.
2. When it comes to qualifying for a mortgage, a lender can look at the business income or the personal income they pay themselves.
3. Adding the net business income or the personal income from year 1 and year 2 and dividing it by two is the income a lender will associate with that borrower. Keep in mind though this will also be affected if there is more than one shareholder.

There are two ways one can go about this type of corporate mortgage, depending on if the corporation is the operating company or acts as the holding company.

Mortgages and Operating Companies

As with any mortgage, there are considerations and more-so when looking to put your mortgage under your corporate umbrella. While you would essentially qualify as though you’re buying a property in your name, your application will be packaged much differently to the lender. You would be instead qualifying as a corporation with a personal guarantee from yourself.

It is also possible to do a mortgage deal under your personal name but utilize both personal and corporate income. Lenders can do this by looking at both personal T1 generals and respective NOA, plus you can qualify by looking at the Net Business Income before taxes as seen on company financials.

When it comes to getting a mortgage under an operating company (versus a holding company), you may encounter limitations with the lenders that provide this type of deal. You would be looking at an Alt A (B Lender) to finance this particular mortgage, which may come with higher interest rates.

Mortgages and Holding Companies

When it comes to getting a mortgage under a holding company, you will find things are a bit easier. Having a mortgage under a holding company, versus the operating company, essentially removes any limitations or liability from the operating company with regards to the mortgage.

However, to be eligible, you must meet the definition of a Personal Holding Company (PHC) or Personal Investment Company (PIC) per the bank. This is typically considered “a Canadian incorporated entity established by an individual or individuals for the purpose of conducting investment activities, which can include holding real estate, and/or investments. Personal Holding or Investment Companies, and the owner of the PHC or PIC must qualify personally, and sign as covenantor”.

Some additional reasons to consider a mortgage under a corporation or holding company include:

1. If your intent is to flip properties rather than hold them as rental revenue, it might make sense to consider holding it through a corporation
2. You have retained corporate profit that can be used to buy a property without withdrawing money personally and incurring personal tax.

The most important thing to note when going this route for a mortgage is that ALL DIRECTORS listed on the corporation MUST also be listed on the mortgage application. For a sole proprietorship, this is easy as there is typically only one director, however on larger corporations this is something to consider.

For some individuals, the benefits might not be enough to convince them to put their property under the corporation but for others, it may be the perfect solution.

To find out how your income would be viewed by a lender if you have your business set-up as a corporation, contact me to find out more.

Written by DLC Marketing Team

Are you looking to sell your home? We have a few tips to help you make the most of the spring season!

1. Hire an Experienced Realtor: Before preparing your home for the Spring market, you will want to hire an experienced realtor! A good realtor will serve as your guide through the entire sales process, helping you get your home ready for listing, showing potential buyers and finalizing the eventual sale. This is even more important given the changing landscape in relation to additional safety protocols with viewings and even virtual viewing options. Now, more than ever, the expertise of a realtor will help you navigate the sales process.
2. Prioritize Repairs and Improvements: Before listing your home, it is important to go through room-by-room and address any issues such as chipped paint, small holes in the wall, broken fixtures, old appliances, etc. Correcting these minor issues will help your home truly shine when buyers walk through.
3. Clean and Stage Your Home: Now that you have made the necessary minor repairs, you can start staging your home! Start with the exterior of your home and ensure you tidy up the yard, remove any junk and wash your windows! When it comes to the interior of your home, you will want to declutter and do a deep clean (a professional cleaning service can come in handy for this!). Once your home is decluttered and clean, your real estate agent can help you stage it so that it appears spacious and inviting.
4. Consider a Pre-Listing Inspection: Once you are ready to list your home, it can be a good idea to consider a pre-listing inspection. The inspector would conduct a complete visual inspection of all interior and exterior elements (including HVAC systems, wiring, ceiling, chimneys, gutters, etc.), which would help put prospective buyers at ease.
5. Organize The Paperwork: There is a lot of paperwork when it comes to selling your home. Having all of these documents organized and together for potential buyers will help to speed up the process and allow them to address any questions before the deal is finalized. Permits, renovation or repair receipts, warranties, rental agreements and copies of your utility bills are all good records for potential buyers.

Whether you are looking to buy or sell, contact me to discuss the options to ensure the best outcome for you and your family!

Written by DLC Marketing Team

When something goes wrong with your home and you suffer a loss, you need to be able to rely on your insurance coverage. Knowing which of your insurance policies to turn to isn’t always easy. Title insurance and home insurance both offer important protection, but many get them confused. So, what’s the difference between home insurance and title insurance?

what is home insurance?

Home insurance is a type of property insurance that can provide coverage for:

• losses from damage to your residence as well as other structures on your property;
• losses from property damage due to natural disasters like fire and windstorms (flood and earthquake coverage is often a separate purchase);
• stolen or damaged items in your home;
• potential liability or medical coverage if someone gets hurt on your property.

Many lenders require their borrowers to buy home insurance as a condition of securing a mortgage.

what makes title insurance different from home insurance?

A title insurance policy protects your title, which is your legal ownership of the property. It can provide coverage for a number of risks stemming from title defects, which prevent free and clear ownership. It can also cover losses due to encroachment and zoning issues, unpermitted work by a previous owner, and even title fraud.

When you buy home insurance, it’s to prevent losses from events that might occur in the future. Most title insurance coverage focuses on existing, unknown issues or defects relating to the property and/or its title. It’s a subtle difference, but an important one. Unfortunately, one of the most common reasons we have to deny claims for is because the homeowners thought they had a title insurance policy when all they had was home insurance.

THERE ARE LENDER AS WELL AS HOMEOWNER TITLE INSURANCE POLICIES

Title insurance does more than just protect you once you take ownership of your property—it can help the closing process itself go more smoothly. That’s one reason why many lenders require borrowers to purchase a lender title insurance policy or loan policy as part of getting their mortgage. To get protection for yourself, you also need a homeowner title insurance policy. Knowing the distinctions between the two policies can save you from losing out.

TITLE INSURANCE IS A ONE-TIME COST

One big difference between home insurance and title insurance is the way their premiums are set up. You pay for home insurance every month, and that payment potentially increases if you have to make a claim. With title insurance, you buy your policy with a one-time premium that’s based on your property’s location and size. The premium also varies by province, but $150 – $350 is a reasonable range to expect based on average 2021 home prices.

HOW LONG DOES TITLE INSURANCE LAST?

Your homeowner title insurance policy lasts as long as you have an interest in the property. The policy can also pass to your heirs or other beneficiaries if they inherit title from you.

Your lender title insurance policy lasts as long as your mortgage does. That means that if you refinance the mortgage with a new lender, you might need to get a new lender policy. Home insurance coverage isn’t normally affected by refinancing, as long as you keep paying the monthly premium. Your lender may require you to show proof of home insurance for a refinance, just like with a new mortgage.

which type of insurance is better?

Title insurance and home insurance cover different risks of home ownership. Having both policies can help you properly prepare for what the future may bring. The risks that title insurance covers are both expensive and hard to anticipate, but protecting yourself is simple. For a one-time premium, you can make sure you’ve got the coverage you need with a homeowner title insurance policy from FCT.

Written by DLC Marketing Team

Most of us like where we live, but we might not love it. Have you fallen out of love with your home? No sweat! We have the tips to help you fall in love with your home, all over again!

Cleanse and Purge

Depending how long you have lived in your home, you have probably gathered up a number of items that you no longer need, want or use. One of the first steps to falling in love with your home again is purging your space of all that unnecessary stuff – whether it is old clothes, furniture you hate, outdated accessories – removing the old to make way for the new can have a huge effect on how you feel about your home.

Rearrange Your Rooms

Once you have purged all of the unwanted items around your home, you probably have a bit more space to work with! A great way to breathe new life into your space is by re-arranging your furniture! While not all rooms will have optimal space, you might be surprised if you just try and see how it would look with a different layout! Simply moving around your furniture will make your home feel revived, without any extra spend!

Consider a New Colour

If you’re looking for that little extra refresh, a new coat of paint is a great way to get the job done! Changing the tone of your room from darker to lighter, or warm to cool, can make the space feel brand new again! This year’s tones include purples and pink hues, matched with grey and white or pops of teal and blue for that extra 70s vibe!

Or Try a New Style

If you’ve always had a home with traditional cupboards or furniture, it might be time to mix it up! Swapping out a few old pieces for something new, perhaps with a modern twist, can revive any space. Consider starting small by swapping lamps or your coffee table and moving up to larger items like TV stands and bookshelves for that fulsome redo!

Enhance Your Lighting

Lighting has a big effect on mood, and it is the same for your home. Installing new light fixtures, adding or removing lamps, or even changing your bulbs from a bright white to warm or vice versa for a different environment. If you’re looking for that extra ambiance, try a lava lamp or a cute candle tray!

Retouch and Refinish

If you’re not interested in going all out on your home makeover, you don’t have to! There are still plenty of ways you can fall in love with your home again… such as with a little retouching and reviving! A great place to start is your kitchen cupboards. refinishing and painting your existing cabinets is easier than you may think!

Don’t Forget About the Exterior!

While we spend a lot of our time indoor our home, you don’t want to forget about the exterior! New and inviting front door lighting, a cute brick path and some new flowers can create a whole new world for you to enjoy. Consider also adding wicker furniture, an outdoor rug and hanging fairy lights or adding a water feature for that extra relaxation.

Not sure if you can afford updates to your home? Consider utilizing your home equity! Call or text me to find out more.

Written by DLC Marketing Team

With news stories surrounding title fraud breaking weekly, more homeowners are asking what they can do to protect their homes before they become the next headline. Daniela DeTommaso, President of FCT, addressed the issue in a recent interview on CBC’s Metro Morning with Ismaila Alfa.

“We’re seeing a level of sophistication in these frauds we’ve never seen before,” Daniela explains. “[Fraudsters are] falsifying identification, but to the human eye, you would never know that they’re not the person they’re pretending to be.”

Title fraud impacts both homebuyers and homeowners. Someone whose title has been stolen, or who purchased a fraudulently listed property has few options for recourse. “We’re seeing innocent people on both sides [of transactions] just devastated by something they could never have even imagined could happen to them,” says Daniela.

Industry experts are urging homebuyers to purchase title insurance as part of closing. Tim Hudak, CEO of the Ontario Real Estate Association (OREA) recently described title insurance as “the best safeguard” for homebuyers.

title fraud protection for existing homeowners

Title insurance is still an option for homeowners after they take possession, even years later. But once an issue like fraud is discovered, it can be too late to provide coverage. According to Daniela, the best time to purchase a title insurance policy is now.

“There’s no reason you shouldn’t be getting title insurance, just like you wouldn’t buy a house without property and casualty insurance,” she explains. When a homeowner with a title insurance policy learns their title has been stolen, they benefit from more than just their coverage.

“The title insurance company also has a duty to defend,” says Daniela. “That means that the minute we find out [title fraud] has happened, we step in and we protect [the insured]. We pay all of the costs.”

Those costs include the legal fees to restore a homeowner’s title, which can be in the tens of thousands, as well as the costs of investigating the fraud and handling all the legal processes.

“It’s not only compensating for that significant loss,” Daniela continues. “It’s also just providing that peace of mind knowing that someone’s going to navigate this process for you, and any costs […] having to prove that you are who you say you are.”

If you aren’t insured yet, don’t wait for your home to make headlines. Call or text me to find out.

Written by DLC Marketing Team

So, you’re moving! Before you hunker down in your new home, there are a few things you will want to take care of regarding your new address.

Personal Contacts

First and foremost, if you haven’t yet, make sure to tell all your personal contacts about your address change, including:

• Relatives
• Friends
• Employer
• Schools, colleges, universities, daycares
• Landlord (if necessary)
• Clubs, associations and charities

Healthcare Professionals

For the purposes of keeping your health care records up to date, make sure to update your professional contacts:

• Doctor(s)
• Dentist
• Veterinarian
• Other healthcare specialist(s)

Creditors and Services

If you haven’t yet reached out to your services, you will want to do so as soon as possible for a smooth change of service from your existing address to your new address. These services include:

• Phone, cable, internet, mobility company
• Electricity / hydro
• Natural gas
• Heating fuel company (ask if you receive a deposit refund)
• Financial institution
• Credit card companies
• Insurance companies / broker(s)
• Lawyer / notary
• Subscriptions (e.g., newspapers, books, music, loyalty programs)

Government Services

Lastly, it is vital to inform the federal and your provincial/territorial government if your address changes to ensure all your data and ID cards are updated:

• Driver’s license
• Health Card
• Vehicle registration
• Canada Post / epost
• Canada Revenue Agency
• Canada Pension Plan / Quebec Pension Plan
• Old Age Security
• Employment Insurance

Need assistance in your search for a new home? Contact me to discuss your specific need.

Written by DLC Marketing Team

A second mortgage is a mortgage that is taken out against a property that already has a home loan (mortgage) on it. Generally people take out second mortgages to satisfy short-term cash or liquidity requirements, have an investment opportunity or to pay off higher-interest debts (such as credit cards and student loans) that a second mortgage might offer.

If you are considering a second mortgage for any reason, here are a few key points to keep in mind:

Second Mortgages and Home Equity: Your second mortgage and what you can qualify for hinges on the equity that you have built up in your home. Second mortgages allow you to access between 80 and 95 percent of your home equity, depending on your qualifications.

For example, if you seeking 95% Loan-to-Value loan (“LTV”):

House Value =                                                             $850,000
95% LTV (maximum mortgage amount)               $807,500
less: First Mortgage                                                  ($550,000)
Amount Available Through Second Mortgage     $257,500

Second Mortgages and Interest Rates: When it comes to a second mortgage, these are typically higher risk loans for lenders. As a result, most second mortgages will have a higher interest rate than a typical home loan. There is also the option of working with alternative and private lenders depending on your situation and financial standing.

Second Mortgage Payments: One advantage when it comes to a second mortgage is that they have attractive payment factors. For instance, you can opt for interest-only payments, or you can select to pay the interest plus the principal loan amount. Work with your mortgage broker to discuss options and what would work best for your situation.

Second Mortgage Additional Fees: A second mortgage often comes with additional fees that you should be aware of before going into the transaction. These fees can vary widely but often are a percentage of the mortgage.  Other fees to consider include appraisal fees, legal fees to set up the second mortgage and any lender or broker administration fees (particularly with alternative or private lenders).

Second mortgages are a great option for many homeowners and, in some cases, may be a better solution than a refinance or a Home Equity Loan (HELOC). If you are interested in learning more or want to find out if a second mortgage is right for you, don’t hesitate to reach out to me today.

Written by DLC Marketing Team

The latest news has been focused on rising interest rates, surging inflation, and economic uncertainty with suggestions that the Canadian economy could be tripped into recession.

With all this information circulating, now is a good time to discuss ways to adapt your finances and protect your future. Fortunately, there are a few key things you can do to get started today!

1. Set a budget and reduce monthly expenses and overall debt by including the following:
   • Review your income and expenses and identify areas for reduction – such as getting a cheaper cell phone plan, reducing streaming service subscriptions, reviewing transport costs, etc.
   • Make a list of your current high-interest loans (such as credit card balances). If your mortgage is up for renewal, you may be able to benefit by consolidating debt into your mortgage to save on interest and free up cash flow with one payment. Refinancing your mortgage before the renewal is also an option, but a review of the penalty cost versus your debt consolidation goal should be considered. As your mortgage professional, I can assist you with this analysis.
   • Allot a percentage of your income towards savings such as an emergency fund. Your goal should be to have the equivalent of 3 to 6 months of earnings in this fund to provide breathing room should you lose your job or face any unexpected expenses. Another form of emergency funds could also be a line-of-credit. Once set-up, these generally have no cost to you unless you use it in the event of an emergency.

Having a healthy and realistic budget will give you peace of mind and allow you to properly allocate your monthly cash flow between debt, expenses, and savings.

1. Evaluate your investment portfolio:
   1. While you will want to avoid making any knee-jerk reactions, it maybe a good time to diversify your portfolio to help reduce risk. Consider rerouting your investment to real estate or other areas to ensure you have various sources of income and always talk to an expert.
2. Find additional income sources!
   • Many people have found innovative ways to increase their income by asking the following three questions:
     • Are you a fit for a potential promotion?
     • Do you have a review coming up?
     • Do you have transferable skills that you can apply to consulting or additional contract work?

One final reminder – don’t panic. I know the word “recession” can be stressful but understanding what is happening and making appropriate adjustments will help you stay financially secure.

If you have any additional questions, don’t hesitate to reach out to me. I would be happy to chat with you anytime about the impact on your mortgage, or how to make changes for the long-term.

Written by DLC Marketing Team