Rate Sheet for May 24 2011-Check out my new low 5 year fixed!

Mortgages Designed for the Self Employed

It’s a favourite daydream of working Canadians: to go intoSource: Mortgage Intelligence

business for yourself! For some Canadians who are self-employed,

their situation is the consequence of corporate

downsizing. For others, it is a carefully planned decision to

leverage their knowledge and experience for themselves

and improve their own bottom line.

Typically a very innovative and energetic bunch, the selfemployed

now comprise approximately 16% of Canada’s

total workforce. We like to imagine that these are the lucky

folks who are living their entrepreneurial dreams.

Talk to self-employed Canadians about getting a mortgage

and many will tell you that the dream can have downsides.

These individuals – who may actually be more financially

successful than ever – often do not fit traditional mortgage

lending criteria. It can make mortgage shopping a frustrating

and, for some, a humiliating experience.

Without an established stream of pay stubs from an employer,

lenders have none of the traditional assurances that

you can meet your mortgage obligations. You may be expected

to undergo a long and complicated process to prove

your ability to service your debt. Lenders want to verify your

employment and your income – not a simple task for someone

who is self-employed. Lenders are also looking ahead;

they will want some evidence that payments can be made

for the life of the mortgage – not just over the next year.

Most frustrating of all, small business owners are usually

expected to provide detailed financial statements for their

business for the past two years. What picture do those

statements paint for the lenders? An astute business owner

with a good accountant will work hard to minimize taxable

income for the business: a smart financial management

strategy. When lenders plug those figures into their lending

formulas – they may conclude that you are a high-risk

borrower.

The problem is not with the self-employed as a category;

it is with lenders’ traditional criteria and their inability to

reflect the different income environment of a self-employed

homebuyer.

Thankfully, the lending landscape has adapted to this

market need. Certain lenders have designed mortgage

products precisely for this very attractive market segment.

Naturally, the lender will still need to assess risk, but the

criteria are tailor-made for the self-employed and

essentially take a common sense approach to the definition

of income. You could qualify for your mortgage based

solely on what you state your income to be, and after

confirmation that your lending ratios, credit and tax liabilities

are in good order. It can be that quick and easy!

As more lenders enter this market niche, you’ll find that not

all products are equal. As a group, the self-employed often

delegate to other professional service providers and this is

a situation where you may want to seek advice from a

mortgage professional so you get the best mortgage for

your needs.

For the self-employed – who build their own success on

understanding the needs of their customers – the new

mortgages designed for them are good business. And

they’re also welcome news to the growing number of

Canadians who are building their own success in their

own way.

STABILITY IN THE CANADIAN MORTGAGE MARKET

May 2011 Significant Statistics-Report Completed by the Canadian Association of Accredited Mortgage Professionals  (CAAMP)
There is currently $855 billion in mortgages on principal residences and $215 billion in Home Equity Lines of Credit (HELOC)
 Individuals with HELOCs only have an average 65 per cent equity in their homes
 HELOC prevalence is highest among middle age homeowners
 Equity takeouts amount to $26 billion annually, with most funds used for renovations ($9.4 billion), followed by investments ($5.0 billion)
 The average down payment for a home purchased in the last 12 months was 30%, up from 26% for homes purchased two years ago
 Among all borrowers, 63 per cent have fixed rate mortgages, 30 per cent have variable rate mortgages and 6 per cent have a combination of both
 Less than a quarter (22 per cent) of all borrowers have amortization periods longer than 25 years
 34 per cent of those who most recently renewed or renegotiated their mortgages did so before their term expired. The average time to pay off a mortgage is 7.4 years less than the original amortization
 200,000 homeowners paid off their mortgages in the last 12 months
 The average mortgage interest rate discount is 1.44 per cent for those who chose a five year fixed rate mortgage in the last twelve months with the average mortgage rate being 4.04%
 Of those who renewed their mortgages in the last twelve months, 65 per cent are paying lower rates than previously
 66 per cent of all mortgage borrowers can tolerate a monthly mortgage increase of $300 or more
 Among borrowers who took out a new mortgage in the last 12 months, 27% obtained it from a mortgage broker. Overall mortgage broker share stands at 23%
 Canadian appetite for home buying has returned to pre-recession levels, following a slide over the past three surveys. Almost 60 per cent respondents thought that now was a good time to buy
 Optimism is returning to the market with almost half (46 per cent) of those questioned saying that they expect prices to rise

For Sale

Commercial Building for Sale in Rimbey. Asking $225000. For video presentation visit www.rimbeyrealestate.ca.
Business is negotiable but not necessary. Rental income from apartments and Purolator. Additional large storage area as well in basement. Showroom measures just over 3000 sq ft.

New Low Rate

Our best 5 year fixed rate is now only 3.99%.

My best variable is still available at 2.25%.

Possible Costs When Selling or Buying a Home

Home inspection -- A house inspection or property inspection can cost in the $350-500 range for most single-family homes. Home inspections are recommended to identify if there are any other potentially costly expenses – issues not visible to the naked eye – that may impact the costs and upkeep of the home.

Property survey  A land surveyor carrries this out. They measure the property and hopefully obtains a stamp of compliance from the municipality in which the home is located.   With a RPR or Survey, the buyer will precisely know the boundaries. Sellers if one is not in place will in most cases pay for this. It is a requirement when selling a home and if one is not in place then some sellers will provide and pay for title insurance.

Water testing -- for properties not on a municipal water system, most - if not all - financing institutions require the water source to be tested to ensure it meets standards for human consumption.  If I am representing a buyer and helping them purchase an acreage I  will pay for the water testing. The water test is often a "condition" on the Offer to Purchase.

Status certificate fee -- When making an offer to purchase a condominium, it’s a good idea to ensure an offer is conditional upon obtaining and having time to review an Status certificate. This fee (not applicable in Quebec) applies when buying a condominium or strata unit and could cost up to $100.

Land transfer tax- Alberta has no land transfer tax.

Legal Fees --  Legal costs will depend on the complexity of the transaction and the lawyer’s experience.

Prepaid property tax or utility bills- Buyers should be prepared to reimburse the seller for prepaid property taxes and utility bills if say they were taking possession mid year or month depending on the circumstances.

Average Price Per Province for the Month of March 2010 & 2011

Mar 2010 to March 2011 Average Prices for Various Cities