There are guidelines that need to be followed but you could re-enter the credit market within months of the formal discharge.

Mortgage Lenders have the requirement that you must be discharged for 2 full years and have at the very least 1 full year of clean re-established credit in the amount of $2500.00 to $5000.00. Now you may be saying, that’s all good and well, but no on will extend credit to me.

Here’s how to begin.

• Set up on-line banking with your regular bank. This will assure that you can pay your bills as soon as you receive them. Remember that late payments after Bankruptcy or Consumer Proposal are not acceptable to future lenders. It also causes you to begin again with re-establishing the credit from the date of the last late payment.

• Next you should apply for a secured credit card. A deposit must be provided, but you will be approved for a small balance of $250.00 to $500.00, even right after your discharge. Companies like Capital-One offer this service and report to the credit bureau.

• Home Trust Company will give a limit of $1000.00 with a deposit of $1000.00 and they report to the credit bureau each month. This helps re-establish a Beacon or credit score right away. After 1 year of impeccable payments you can request a return of your deposit.

• About 4 months after establishing the secured credit card, you should talk to the bank where you have a relationship (avoid asking a bank that was involved in the Bankruptcy or Consumer Proposal) as they will not be permitted to lend to you. You should request an RRSP loan in the amount of $2000.00 or higher if they will allow it. The bank will have the security of the RRSP and you will have a second source of re-established credit with a national institution. Having credit other than a credit card is vital.

• You may also have the need for a car and there are firms that will finance a vehicle post-Bankruptcy or Consumer Proposal, but the fees can be extremely high. As long as the amount of the loan is small it could still be an option. But be wary that you don’t create a new financial difficulty.

Once you have followed these steps you will be back on your financial feet and you will be able to buy a home with as little as 5% down, provided you have provable income and are able to show that you have your closing costs from your own savings. It’s not easy, but why wait for seven long years before taking the first step to credit worthiness?

Elfie Hayes

You wouldn’t hire the first person or company whose name is listed in the phone book without more research, so why do it on the Internet. The Internet allows you to gather a great deal of information from a website that isn’t readily available in a phone book. Secondly you have the ability to cross reference as person or company on the web.

Did you know that Linked-in is the only Professional Networking site on the web right now? Fortune 500 companies register their CEOs and vital employees on the site. Major companies look to Linked-in before hiring new talent. A strong profile for a firm or an individual will give some assurance of the validity of a person or business. Only the person giving a testimonial on Linked-in can post it to the owner’s profile. This means no one can post a recommendation to their own site, making the testimonial more powerful.

It’s good to talk to others who have used the service or product that you are looking for on-line. It’s the way that business is being done, so validating your choice through someone who has had the experience can give you confidence.

I can tell you that in the Mortgage Industry, my industry, more and more people use the web to find a Mortgage Agent. Look at CMHC’s survey that shows 44% of First-time Buyers use Mortgage Brokers. Internet-savvy buyers research before they commit. They know they can get the service and experience of a Mortgage Broker without paying a fee if they have clean credit. You see, Lenders pay the Broker when the borrower has clean credit and a traditional transaction. That’s a big benefit!

You should insist that your Mortgage Broker has an AMP designation through The Canadian Association of Accredited Mortgage Professionals. AMP’s work by a strict code of conducts and participates in mandatory education. You should also ask your Mortgage Agent if they charge Broker fees on all their mortgage approvals. Some do you know? When a non-traditional Lender or Private Lender are part of a non-traditional transaction a Broker will charge a fee as it is the only way for them to be compensated for their work.

When engaging a service or product from the Internet asks if the person is licensed, full-time and if they are part of an association. These questions are key since professions that are licensed are usually regulated, giving you an avenue to remedy a situation that may not be what is offered.

If you search the Internet for a service or product good for you! It’s fast and easy plus you’ll have a lot of information to verify your choice. But do your homework and have a great experience!

Elfie Hayes

Sometimes it’s inevitable. Divorce is the way a relationship will end. When a couple chooses divorce there will be a division of assets including but not limited to savings, investments, pensions and the matrimonial home. The equity of the home minus any existing mortgages will be shared in the prescribed way according to Ontario laws.

There are two ways to manage the division of the property. First, the home can be sold and after all expenses are paid, Real Estate commission, mortgage penalties and legal fess spouses will be awarded their portion. The second method is buying out a spouse. This entails the spouse who wishes to keep the home qualifying for a mortgage to pay out the existing financing, plus the portion that they owe the spouse who is not staying in the home.

Often before couples get to the point of selling or buying one another out the raw emotions of separation and impending divorce may cause lack of co-operation in financial concerns. This is the worst possible way to deal with the situation

This manifests in refusal to pay joint debts. Something that can hurt both parties more than they can imagine. By not making payments or making them late both individuals risk injuring their credit to the point that they may not be able to buy out one another, or buy a new home of their own. Its financial suicide!

A few things that you must consider are:
• Start separating your finances from your spouse, but keep up your obligations.
• If you have joint credit, make arrangements to be removed from as many sources as possible.
• Be sure that your credit is clean by going to Equifax and check your score.
• If your spouse is not co-operative try to keep up payment your self, but document so when a settlement is reached you can be repaid.
• If you have never had credit during the relationship, get some in your own name.
• Attempt to get a separation agreement at the earliest possible date, as lenders will ask for it before approving a new mortgage for you.
• Set out any support payments in the separation as they may be considered as income for your next mortgage application. If you area the one paying support, it will be treated as a debt.
• Get an appraisal if you are buying your spouse out of the matrimonial home.
• If you are the one being bought out, make sure the current lender takes you off title to the matrimonial home. Being off the mortgage is not sufficient.
• If you plan to sell, have a qualified Realtor evaluate the home.

My Staff and I are well versed on both buying out and simply getting approved for another home. Contact us anytime for a confidential discussion of your personal options.

Elfie Hayes

Three key points of change could be:

1) To raise the Minimum down payments of 5% to 7%. Here is an example of how this will affect your down payment (A purchase of $400,000 you will need $28,000 opposed to $20,000).
2) Amortizations cut to 25 years form 30 years. This will lead to higher monthly payments. In turn it will lead to more income required to qualify. Again let use a $400,000 purchase with a 5% down payment. At 30 amortization the income required is $72,946.00, at 25 years the income required is $80,477.00. This will affect the consumer a number of ways. The higher monthly payment will cut into their cash flow per month. If there is not enough income to qualify the consumer will need to decide on whether to put more of a down payment or purchase a home at a lower price point.
3) Higher qualifying standards. ( higher credit rating needed)

One or all of these changes would be implemented to slow the housing market this Spring.

If you are thinking of buying today’s the day! Contact Us!

Elfie Hayes

Enter the Reverse Mortgage. This is a tool designed to make it possible to use that hard- earned equity to stay in the home. Take a dream vacation, maintain the property or any other expense that may be beyond what pension income can provide. You can take up to
40% of the value of your home in a Reverse Mortgage. You and your spouse must both be over the age of 60.

When a client tells me that they would rather stay in their home than downsize or go to an apartment, I truly feel that there may be a real benefit to them by presenting the option of a Reverse Mortgage. Almost half of all independent and bank affiliated Planners and Mortgage Brokers interviewed, in a study commissioned by Canadian Home Income Plan felt they would recommend the “CHIP” program. It’s not a solution for everyone, but it’s also no longer thought of as the option of “last resort”.

Once retirement has begun there is a possibility that taking a traditional mortgage to pay for expenses may be out of the question, due to the payments it can trigger. The Reverse Mortgage has the opposite effect if it is implemented correctly and administered as part of a sound Financial Plan. This is why a Financial Advisor should be included in the decision. There are many ways to manage the funds from a Reverse Mortgage to maximize the benefit and retain the original asset.

Let’s face it people work hard their entire lives to pay off their Mortgage. They can’t exchange the doors and windows to buy a new car, or create a new income stream, so we’re talking about using the equity or money that has accumulated in the house without selling the real estate. Most seniors have 77% of their net worth within their equity. Accessing it can improve retirement and keep them in the family home.

Recently CHIP became a Schedule One Bank so the rates have decreased, making it an even more effective way to keep your home and your lifestyle long into retirement. The best part is you never have to make a payment.

Elfie Hayes

The past few years have brought real estate investors to the table again. The crash of the stock market has many people nervous about investing. It seems even the slightest world event topples the indexes.

This has given way to Investors turning to Real Estate once again! If you held properties during this recent recession you didn’t lose any of the value. That could not be said for mutual funds or other stock market based holdings.

Durham Region is a particularly great area in which to have rentals. The explosion of growth from the Universities and Colleges here in Oshawa offers exceptional opportunity for Student Housing. The downtown core of Oshawa is holding strong appeal due to all the new Campuses located here.

As well Rent to Own has caught on again. Many people negatively affected by job loss and high debts can’t buy a home at this moment, but with guidance they can repair their credit and own a home in 2 years after Bankruptcy or Consumer Proposal. It’s a local industry.

Here’s another less-thought-of way to maximize a rental. Let’s assume you are a First Time Buyer and you have 5% down for a home. What if you bought a house with 2 living units and used the rent from one to offset the higher cost of the mortgage. Yes, you’ll have to have tenants living in the house with you, but what if their rent paid for the mortgage and you only had to pay the expenses would that sound good?

There’s more to this strategy. Down the road a few years, the current house will have increased in value. Now you could take some of that equity to use as a down payment on another home but this time without tenants.

But here’s what’s so great about this. You can buy with 5% down again, rent out the unit you lived in while you owned the first house and now you have a principal residence and a two-unit rental, both bought with only 5% down. The rental house should now carry it’s self so while you’re asleep at night your tenants are paying off your mortgage and you increase your net worth! And you thought investing in Real Estate was hard.

How does this sound to you now? Making money while you sleep. I love this concept!

Elfie Hayes

1. Treat Investing as a business. Keep emotions in check make decisions based on fact

2. Build a strong support team. Buying for investment requires a Realtor, a Mortgage Agent, a Home Inspector, a Lawyer, an Accountant, a Contractor for repairs, an Insurance Agent, a Financial Planner. Wealthy people always hire professionals to help them.

3. Learn your marketplace. Know the house pricing in your market, know the areas that sell well when if you want to flip. Know the areas that appreciate if you intend to hold an investment. Understand the rents in a given area. Know market times, and list to sale ratios.

4. Consider all your up front purchase costs. From acquisition to repair or fees for professional services to cost of selling you must know every detail of the cost to understand if there is a profit in this.

5. Analyze the Deal. Can you buy the investment, make the changes you need to make get the rent or profit that you need. Make sure you have an emergency fund for the unexpected. Ask your team if you aren’t sure if a project is worth proceeding with.

6. Screen any potential tenants. Know your rights, trust your gut, do a credit check, check references and work references. If you do get a difficult tenant, act immediately to rectify the situation.

7. When you make mistakes. Mistakes will happen, you may misjudge, but as long as you learn from you can eliminate them in the future.

8. Join a Real Estate investment group. There are a lot of people who don’t invest but are willing to offer free advice, this may be a time to thank them, but stick with those who are in the game like you.

Elfie Hayes

Elfie Hayes