Archive for June 2009

In these challenging mortgage financing times, it can be difficult for self-employed, investors or those with damaged credit to purchase homes. Lenders have become very restrictive in their lending practice, thus keeping people from home ownership. The Calgary, Alberta mortgage agents at MBN Mortgage (associated with Mortgage Intelligence) have aligned themselves with the MBN Group of Companies to find a way to solve these financing challenges.

We have a solution!

MBN Finance Ltd. is continually sourcing new methods of assisting our members with new property acquisition and moving them closer to their financial goals.  Our Option Program is one of the most innovative and secure means of increasing your portfolio in today’s tight mortgage climate.  Informed real estate investors acquire property in all types of markets; rising, falling or flat.  We do all of the ground work for you so controlling another piece of property can be done in less than 48 hours.

In a nut shell our Option Program allows you to lease a rental property or principal residence at below market rents with the option to buy it at today’s price any time over the next 4 years.  Through MBN Finance’s corporate guarantee your lease option purchase is 100% guarantied.

Our team of property locators is constantly sourcing new product from the rental market, the resale market and the new home sales market.  We only secure properties in good neighborhoods with excellent rental potential.  The program was created to benefit all MBN members and provide them with another method of increasing their holdings.  Below is the Option Program timeline.

• MBN Finance secures the property with a 4 year lease with the option to buy it at today’s price at any time over the 4 years.  Various caveats are registered on title to protect MBN’s interest and ultimately an MBN member’s interest in the property.
• MBN members have the opportunity to view the property with the MBN Real Estate Team.
• An Option Interest Acquisition Agreement is signed by the member wishing to control the property (the price of these options can range between $35,000.00 and $60,000.00 depending on the property).
• All contracts are reviewed by the Sutton Altawest Broker to ensure they comply with the Alberta Real Estate Act.
• The MBN member takes possession of the property and can rent it out or live in it.  Any equity gain over the life of the lease option benefits that member.
• At the end of the 4 year term the member, or the member’s company, places a mortgage on the property for the originally agreed upon purchase price. The down payment is shown as the option price, the total amount of rent paid and any difference between the appraised value minus the above 2 items.  This allows for conventional financing, thus avoiding mortgage insurance fees.

Through our Option Program MBN Finance is assisting our members in acquiring properties in 4 years time at today’s market price with what amounts to between 5% and 9% down.  Despite the current mortgage climate our members are continually increasing their wealth.

For more information on how to take advantage of these opportunities for home ownership in Calgary, Okotoks, Airdrie, Cochrane, Edmonton and Red Deer, call 1-866-955-9662 or email bgavin@mbnltd.com.

There’s more to a mortgage than just a low rate

Make sure all the features fit your needs

 While some mortgage rates have been increasing in recent weeks, overall, interest rates are the lowest we’ve seen in a generation.  Homeowners and first-time buyers getting a mortgage in the months ahead will likely enjoy a rate that will keep their borrowing costs low for the next few years.  Indeed, borrowers who have renewed or refinanced a mortgage in the past year now pay interest rates that are nearly one point lower than their previous rate, according to an April report by the Canadian Association of Accredited Mortgage Professionals (CAAMP).

But while securing an attractive interest rate may be the top priority for most borrowers, some low-rate mortgages available today offer limited flexibility. For example, “no frills” mortgages offer favourable rates, but may limit your ability to pay off your mortgage sooner. In addition, “quick close” financing deals offer attractive rate discounts, but many require a closing date within 30 days. This may not provide enough flexibility for sellers or buyers.

When it comes to choosing a mortgage, getting a good rate is just the tip of the iceberg. To ensure smooth sailing, you have to be aware of all the other features that may lie below the surface.

The features of a mortgage should fit a homebuyer’s personal goals, both now and down the road. Borrowers need to understand what they’re signing up for – a mortgage is the largest debt most consumers will ever take on.

Below are five tips prospective mortgage holders may consider when choosing a mortgage:

1. Consider an assumable mortgage 

A few years from now when you decide to sell your home, your low-rate mortgage could provide an extra selling point. If your mortgage is assumable, meaning it can be transferred to another borrower, it allows the purchaser to take on your mortgage’s terms and payments as part of the sale. This can be an attractive incentive, particularly in a higher rate environment.  

2.  Review refinancing penalties 

Given the low rates available today, many homeowners are weighing the benefits of refinancing. When choosing a mortgage, keep in mind that penalties are often the equivalent of three months’ mortgage payments, or based on an interest rate differential, which is the difference between your current rate and the new rate.  If you consider refinancing, a mortgage broker can help you decide whether the long-term savings outweigh the up-front penalties. 

3. Evaluate pre-payment options

Many borrowers are taking advantage of low interest rates by accelerating payments on their mortgages. For example, many lenders allow you to double up payments periodically, or make lump-sum payments of up to 20 per cent of the principal once a year. When negotiating your mortgage, make sure you understand the size and frequency of payments your lender allows.

4. Review skip-a-payment options

Some lenders offer an option to skip a payment without penalty, which may come in handy in today’s economy.

5. Consider portability

Many mortgages have a portability feature that allows you to transfer your existing mortgage over to a new property, but not all portability terms are the same. Some lenders allow as long as 120 days to transfer the mortgage, but others only allow for a few days or a week.

Choosing the right mortgage involves considering where you are now, and where you may be three to five years from now. Working with a mortgage professional can help you make sense of the many options available to you.  For your financing needs contact your Calgary and Southern Alberta MBN Mortgage Specialists at 1.866.955.9662.

Thinking of buying your first home now that rates have gone down?  The federal budget introduced earlier this year contains new incentives to help first-time homebuyers. 

• Closing costs can be a sizeable expense when buying a property, and the budget also provides up to $750 in tax relief to help with the purchase of a first home
• Under the popular Home Buyers’ Plan, first-time buyers will be able to access up to $25,000 (or $50,000 per couple) from their Registered Retirement Savings Plan for a down payment to purchase or build a qualifying home – that’s a $5,000 increase.

Call your Southern Alberta and Calgary Mortgage Specialist to discuss what these incentives mean for you.  Reach your MBN Mortgage Specialist at 1.866.955.9662.

MBN Mortgage // Mortgage Intelligence