Mortgage Solutions Canada

DIY Landscape Architecture

Wed, 31 Dec 1969 17:00:00 -0700

With the long weekend upon us, you’re not alone if you have gardening on the brain – especially if your landscaping fantasies involve waving a magic wand and transforming the patch of weeds you currently call a “lawn” into a wistful and relaxing oasis.

If you’ve been thinking that this is the summer you turn your backyard dreams into a reality, you may want to check out this site on landscape design. If you can’t afford a landscape architect, this is definitely the next best thing – loaded with plans of all different styles, and for all different backyards, that are sure to inspire you.

Our favourite is definitely the kid-friendly backyard – complete with a sandbox and tricycle trail. It also offers a list of kid-friendly plants. How cool is that?

Turning the notion of "home" on its head

Wed, 31 Dec 1969 17:00:00 -0700

If you've ever turned your house upside down searching for something (your car keys, your passport...your cat), you might feel at home at Austria's newest tourist attraction.

The country's Upside Down House , located in Terfens, was created by Polish architects Irek Glowacki and Marek Rozanski and is essentially a house turned on its head. When you walk in, you'll be walking on the ceiling -- with furniture, appliances and clutter above you.

While it's an interesting concept, we're not sure it's worth the airfare to Terfens.

When a closed mortgage is okay

Wed, 31 Dec 1969 17:00:00 -0700

Smart mortgage consumers know that there’s more to a good mortgage than just rate. Flexibility – and features that will ensure you’re not stuck in a mortgage longer than you want to be –should also be considered when finding the mortgage that’s right for you.

So when looking for the utmost flexibility in your mortgage product, should you opt for an open or closed mortgage? Well, as usual, it depends. Basically, an open mortgage allows you to completely pay off your mortgage before maturity with no penalty – but it comes at a higher rate. A closed mortgage, on the other hand, usually allows you to prepay a portion of your mortgage – usually about 25% of your original principal amount, per year – and increase your payments, but if you want to fully pay off your mortgage, you’ll have to pay three months’ interest or the Interest Rate Differential (IRD), whichever is greater. While the calculations used to determine the IRD differ from lender to lender, it basically equates to how much money they would lose as a result of you paying off your mortgage earlier than agreed upon.

If you think you might pay off your mortgage completely before your agreed-upon amortization – or if you’re contemplating selling your home in favour of renting at some point – then an open mortgage would make more sense for you.

If paying off your entire mortgage quicker than the 25% prepayment privileges will allow is not an option for you, then it might make more sense to take the lower rate and the closed mortgage. Just make sure it’s portable – so you can take it with you, should you choose to move anytime soon.

Decoding MLS listings

Wed, 31 Dec 1969 17:00:00 -0700

House hunting can be a frustrating experience for a number of reasons – not the least of which is the well-staged online listing. You know the type – the MLS listing that features beautifully-staged photographs that make the home in question look like Spelling Manor, while in reality it’s nothing more than a 400 square foot shoe box.

To save you a bit of time – and grey hairs – below are a few tips for determining whether that listing really is reflective of your dream home:

Placement of furniture

This is a huge one. Envision your furniture – and then see if there are similar-sized items in the pictures. If the living room only features a love seat and a single decorative chair, it likely won’t be able to fit your three-seater couch. Same goes for the bedrooms – if they’re photographed with single beds, they likely won’t fit your King.

The fish-eye lens

Beware of photographs that look distorted. If they’re stretched or fish-eyed, you know there’s probably a reason.

Room dimensions

Get to know your ideal room dimensions – either by measuring your own home, or memorizing the room dimensions on a listing that you actually went to see. If you know how big you like your bedrooms, kitchens and living areas, it will be easy to filter the good listings from the bad.

The missing wall

Sneaky real estate agents will take pictures of a home’s best features – such as an exposed brick wall or beautiful fire place – and ignore the rest of the room. Try to keep the missing wall in mind and try to figure out where it stands in relation to the rest of the room. If it’s impossible to tell – and if there’s only one pic of each room – there’s probably a reason.

More mortgage tightening?

Wed, 31 Dec 1969 17:00:00 -0700

The Office of the Superintendent Financial Institutions (OSFI) recently proposed a draft of guidelines that, if adopted, would change the way banks underwrite residential mortgages.

For the most part, the proposed changes are things you would expect the banks to be doing anyway -- and many of them are. Putting these rules on paper would simply require all lenders to do them. A few of the other proposed changes are a little more controversial -- specifically those rules surrounding Home Equity Lines of Credit (HELOCs).

Below is a summary of some of the proposed changes:

 The borrower’s identity, background and demonstrated willingness to service their debt

obligations on a timely basis (Principle 2);

 The borrower’s capacity to service their debt obligations on a timely basis (Principle 3);

and,

 The underlying property valuecollateral and management process (Principle 4)he borrower’s identity, background and demonstrated willingness to service their debt obligations on a timely basis (Principle 2);  The borrower’s capacity to service their debt obligations on a timely basis (Principle 3); and,  The underlying property valuecollateral and management process (Principle 4).

- Mortgage default insurance (mortgage insurance) is often used as a risk mitigation strategy. However, mortgage insurance should not be a substitute for sound underwriting practices and should not be considered a substitute for conducting adequate due diligence on the borrower, or for using other risk proxies such as the minimum down payment.

- Loan To Value ratio should not be relied upon solely to assess the borrower’s demonstrated willingness and capacity to repay a mortgage.

- In addition to income and debt service coverage, a lender's assessment of a borrower’s capacity to service their debt obligations should include, where possible, substantiation of the borrower’s: Assets (e.g., savings, mutual funds and other investments); Current and anticipated living expenses (taking into account the composition of the household); Property ownership expenses (e.g., maintenance costs); and Recourse to repayment capacity from other sources, including guarantees, income, insurance or social support payments.

- When it comes to HELOCs, lenders should expect full repayment over time, and monitor the borrowers’ credit quality. The HELOC component of a residential mortgage should not be more than 65 percent of the value of the home (the current maximum is 80%).

- HELOCs should have clearly articulated amortization requirements in place for all outstanding HELOC balances. This could either include clearly-defined period (e.g., 5 years), after which the outstanding balance of the HELOC converts to a fixed-term with a reasonable amortization period; or a set percentage of the outstanding balance of the HELOC due each month that equates to a reasonable amortization period.

Basically, OSFI thinks it should be a lot more difficult to obtain a HELOC -- and banks should thoroughly scrutinize all residential mortgage applicants. For the full report, visit http:www.osfi-bsif.gc.caappDocRepository1engguidelinessoundguidelinesb20_dft_e.pdf .