You work a lifetime building your nest egg, so the thought of losing financial control can be difficult at any point in life. However, having a trusted document like a power of attorney (POA) can bring you and your loved ones peace of mind. Contrary to what some believe, the reality is that your POA does not own your money or property, and they cannot change your will, make a will, or change a beneficiary on an insurance plan. Your POA is there to learn about your life events, needs, or concerns and help make financial or medical decisions on your behalf if you are unable to.

This is a decision that requires careful consideration, and like any financial tool, there are pros and cons:

Pros 

• The document clearly states who is responsible for your money and property, even temporarily, if you need help managing them. Your attorney must manage your money and property responsibly and for your benefit. If questioned, they may be required by law to account for their actions.
• The document can be as flexible or time-sensitive as you would like or as general or specific as you need.
• You can appoint multiple attorneys and request they make decisions in unison or highlight that they can act separately if one attorney is unavailable. You can also appoint an alternate or successive attorney. It may help reduce the chance of fraudulent activity.

Cons 

• There is a risk that if the wrong attorney is designated, you can become vulnerable to financial abuse. It can happen where an attorney makes decisions based on their best interest rather than the interests of the estate they manage.  
• If your document lacks clarity, there is a risk that your finances could result in ways you do not simply agree with.  
• If multiple attorneys are appointed, disagreements could cause problems or delays in managing financial affairs.  

You should always seek independent legal advice to ensure your needs and expectations are met. Appointing a POA is dynamic; it can be changed or revoked at any time.

When you are in the market for a mortgage, it is important to know the requirements for the qualification, also the reasons why you may not qualify. By understanding these reasons, you can make necessary changes and budget accordingly for the future.

Here are the top 5 reasons why you may not qualify for a mortgage:

1. Too Much Debt: This is the most common reason for mortgage disqualification. One of many measurements all lenders use is the Total Debt Servicing ratio (TDS). It calculates any form of debt, such as credit cards, lines of credit, or other loans, which lenders use to assess your eligibility. Ideally, your monthly debt payments should not exceed 42% (if your credit score is between 650-680) and 44% (if your credit score is over 680) of your gross monthly income.

PRO TIP: Reduce expenses, budget a plan, and consolidate debt when possible.

2. Poor Credit History: Credit score is another key factor in mortgage approval. Check your credit rating to determine what you qualify for before house hunting. A poor credit history poses a higher risk, making it harder to secure a mortgage loan.

PRO TIP: Improve your credit score by paying bills on time, avoiding exceeding credit card limits, or applying for multiple new cards.

3. Insufficient Assets or Income: A lack of sufficient income or assets to put towards your loan can make it challenging to qualify for a mortgage.

PRO TIP: Consider saving more money for your down payment, looking at suite income, or alternative lenders to increase your chances of approval.

4. Not Enough Down Payment: Not having enough money for a down payment is another reason for mortgage disqualification. A 20% down payment is required to avoid mortgage default insurance in Canada. You can also purchase a home with less than 20% and factor in the insurance premiums.

PRO TIP: Non-refundable gifted funds from immediate family members OR have a saving plan with government programs such as TFSA, RRSP, and Tax-Free First Home Savings Account (FHSA) if you are a first-time home buyer.

5. Inadequate Employment History: Mortgage lenders typically prefer a consistent 2-year employment history with the same line of work. Obtaining a mortgage may be more difficult if you have a limited employment history or do not have a long-term position.

PRO TIP: Stay with your current employment and do not make sudden career changes during the mortgage process.

Whether you are a first-time homebuyer or looking to move, understanding the factors that impact your mortgage application can help increase your chances of success.

If you have been denied a mortgage before, do not be discouraged. With the help of a trusted mortgage broker and some effort and patience, you can put yourself in a better position to apply again in the future. Contact me to discuss your options today.

When buying a home, it is essential to avoid mistakes to make the process as smooth as possible. Here are five common house-hunting mistakes to avoid before starting your journey:

1. Skipping the Pre-Qualifying Process: The mortgage application with the pre-qualifying process is a crucial aspect of purchasing a home. A pre-qualification will give you a more realistic affordability plan based on your financial situation. Without a pre-qualification, you will not know how much you can afford, which results in wasted time and disappointment.

2. Ignoring Your Budget: It is tempting to look at homes slightly over your budget, but this can lead to financial strain in the future. You should factor in closing costs and long-term financial responsibility when budgeting. Your mortgage broker can help you set a realistic budget and explore different financial options.

3. Not Hiring a Real Estate Agent: Working with a real estate agent can give you special access to the real estate market and provide valuable insights into the home-buying process. A realtor can guide you from the initial viewing to the bidding process and ensure your success in purchasing a home.

4. Focusing Too Much on Aesthetics: While interior design is essential, focusing too much on aesthetics can lead you to overlook the necessary aspects of a home. You can always upgrade the cosmetic components, but location, size, and price are much harder to modify. Look for homes with “good bones” that can improve with minor adjustments.

5. Failing to Think Ahead: Your needs and wants in a home may change over time, so it is necessary to consider your future goals when purchasing a home. For example, will you need more space for a growing family? Will you need to accommodate aging parents? Although buying a home is not a permanent decision (i.e. can sell if necessary), it is always easier to plan so you can grow with—and not out of—your home whenever possible.

If you are looking for a new home, do not hesitate to ask for help. A quick virtual appointment with me can provide you with valuable insights and guidance before starting your home search.

Mortgage brokers provide CHOICE…. if you only approach one mortgage lender, you will only ever know the rates and terms that one bank has to offer. It would be like just looking at one house before making an offer to purchase! Yes, they all have four walls, a roof and some similar features, yet each home has unique differences and details that can prove to be very important. By looking at many homes, you found the one that is just right for you. By considering many available lenders and mortgages, your government licensed mortgage broker can find the one that is perfect for your situation.

What is mortgage broker?

Mortgage professional is an independent mortgage consulting service. Unlike your traditional experience, a mortgage broker can quickly understand your mortgage situation and provide you with the most suitable product.

Why uses a mortgage broker?

1. Save time and money: Rather than going to different banks, setting up new appointments with different banks and potentially lowering your credit score, your mortgage broker is your one-stop shop to resolve all the legwork. Usually you will only need one meeting (in person or a phone call) with your mortgage broker. The rest will be handled in emails. More time saving is more money to your pocket.
2. Lower interest rate: Most mortgage brokers receive volume discounts from their top lenders and this means you can have access to a lower rate.
3. No fees*: In most cases, you do not need to pay additional fee to your mortgage broker. Your mortgage broker is compensated directly from the bank or lender.
4. Unbiased advice: Unlike the banks focus on their best interest, your mortgage broker works for YOU.
5. More options: Not all mortgages are the same and many mortgages require creative yet strategic lenders from outside of your traditional banks. A mortgage broker typically has access to over 20+ lenders (or more, depending on the mortgage firm). This means a mortgage broker can provide more solutions than your existing option and possible with a better rate. (That’s money saving!)

Are you ready for the next step? Call me today and let me show you the options!