Refinancing may still be an option

To no one’s surprise The Bank of Canada has left its key interest rate unchanged at 0.5%. After reading the latest Monetary Report, it doesn’t sound like it will raise its policy rate any time soon. Inflation is flat, as is wage and export growth, and there is still uncertainty in the US and globally.

Despite record low interest rates, some new home buyers are finding it challenging to qualify for a mortgage due to a new round of rule changes announced late last year. These changes have also affected existing mortgage holders who may want to refinance to get a lower rate.

While low interest rates and robust regional housing, markets continue to be the norm, Canadians are still burdened with record-high debt loads. The ratio of debt to disposable income rose to 167.3% by the end of 2016. That means Canadians owe $1.67 for every dollar of disposable income, up from $1.66 the year prior.

If you’re sitting with equity in your home yet can’t seem to manage your debt payments, refinancing could still be an option. With credit card interest rates often pushing the 20% range and unsecured lines of credit in the 7% and higher range paying off high-interest debts can make sense.

Let’s review a refinance. Specifically, you are increasing the amount of your mortgage to pay off debt. Your actual mortgage payment may or may not increase, depending on a number of factors, and you may incur a penalty to break your existing mortgage if you are refinancing midterm, but your overall monthly payments should decrease. You could be paying off the refinanced debt at a much lower interest rate, which could save you thousands of dollars in interest in the long run.

Here are some reasons to consider a refinance:

Decrease your overall monthly debt payments by using your equity to pay off those high-interest credit cards or unsecured loans, which can help you better manage your budget.
You can refinance to purchase another property. Using the existing equity in your home can be a great way to buy a rental property which, if done right, can also make the interest you pay tax deductible.
You could also take out some of the equity for investment purposes.
Or you may want to refinance to renovate.

As you can see there are many factors to consider before deciding to refinance. Each individual’s financial situation is different. Call me and we can discuss the options available to you.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at

How to Get a Car Loan with Bad Credit

Bad credit doesn’t mean you can’t get a car and doesn’t mean you can’t apply for a car loan with terms that don’t destroy your monthly budget.

Do you know? Almost 25% of auto buyers are regarded as sub-prime, so this means that they have a credit score below 620.

With just a little preparation, having a car loan with poor credit or even with no credit is feasible. Let me tell you how.

Prepare Yourself

It helps to know in advance that people with poor credit usually face higher interest rates and so, once approved, encounter paying more for their money compared to those with good credit. Thus, it’s extremely important that you use up all your options to be able to discover the best auto financing deal. This can simply save you thousands of dollars over the life of the loan.

Check your Credit Reports

Checking your credit reports will give you an in-depth picture of where you’re, and may help you identify any errors that can appear on the records. After that, you can tackle these errors before you approach loan providers.

The main credit agencies provide free reports once per year.  Checking your credit score can cost a couple of dollars, but it can be of great benefit to get an idea of how the lenders will address you.

Try and Find a Good Lender

Finding out how to get a car loan with bad credit will become easier when you know your choice. Getting a lender that welcomes car loan applications from those with bad or limited credit records is obviously a nice start.

Get in Touch with your Local Bank and Credit Unions

If you get low monthly payments but need to pay the loan back for more than 8 years, it’s almost certainly not worthwhile. You need to look for the loan that can give you the lowest interest rate and the least amount of monthly payments.

Make sure that terms and conditions are final. Some car dealerships will raise the monthly payments on your car soon after a few months. Always read the terms to make sure that you aren’t getting fooled into a more pricey payment situation.


Give Attention to the Terms But not on the Monthly Payments

If you get low monthly payments, but need to pay the loan back for more than 8 years, it’s almost certainly not worthwhile. You need to look for the loan that can give you the lowest interest rate and the least amount of monthly payments.

Make sure that terms and conditions are final. Some car dealerships will raise the monthly payments on your car soon after a few months. Always read the terms to make sure that you aren’t getting fooled into a more pricey payment situation.

Refinance your Loan

After 1 year of making payments for your loan, you should try and get it refinanced. This is particularly beneficial if your financial circumstances and credit has improved. Even reducing the interest rate by 1% will save you a great deal of money in the end.

Final Words

Even though they may require more research and settlement, auto loans for bad credit are certainly not impossible, and you may not need to agree to higher interest rates. If you limit your application to one month period, damage should be minimal, and you’ll be on the way to a profitable auto loan and ideally, much better future credit. You can also check companies as to find more on how to get a car loan, refinancing your loan or how you can transfer your car loan balance.

What’s going on with my appraisals

Changes in mortgage rules for home buyers and insurers certainly have had an impact on the housing market, and those changes have impacted property appraisals as well. Conventional mortgages – up to 80% of the value of the property – historically, were required to have a full appraisal. Now, in many areas of the country, an appraisal may also be required on insured mortgages — 80 to 95% loan-to value.

The decision to approve a conventional mortgage, after all other lending criteria have been satisfied, is made on a property’s fair market value. This is defined as the market value of an interest in land at the highest price reasonably expected, when sold by a willing seller to a willing buyer, after an adequate amount of time and exposure to the market.

So who determines the value of that property? One could argue that the market itself determines the value, which is true, but from a lender’s perspective that number must come from an independent third-party – the appraiser. An appraiser, who is specifically trained and has sufficient experience, will be asked to offer an impartial, written opinion of the property’s value.

Realtors normally use a comparative market analysis (CMA) to evaluate a property’s value based on local market data. Agents analyze listing and sales data for comparable properties in the area to recommend a price to list or to offer. However a CMA is not an appraisal. Although appraisers use the CMA approach, they use it in combination with other factors to determine the value of a property.

The major difference is that appraisals are done for a specific client — the lender. Because real estate is the major security for mortgages, the market value estimate needs to be as accurate as possible. Appraisers use ‘sold’ properties information only and compare similar property types, in close proximity, that have sold within a relatively short period of time – usually 90 days.

Not all residential properties are subject to a traditional appraisal. If the property is in an established area with similar properties then sometimes the price can be validated electronically. This model of appraising property, called automated valuation model (AVM), has become quite popular in the last 10 years.

However, given the nature of the housing market these days, mortgage lenders have moved away, in many areas, from AVMs for conventional mortgages, and for some high-ratio mortgages as well, and are asking for live, full on-site appraisals.

At the end of the day, an appraisal must reflect a property’s realistic true market value and needs to be backed up with accurate data.

So why does an appraisal come in lower than expected?

With the introduction of bidding wars, where, in some areas, prices may be artificially inflated, appraisers are still tasked with coming up with a property’s fair market value. Rapidly changing markets can be very challenging for an appraiser to properly evaluate a home’s worth.

Appraisers will try to get to the purchase price when evaluating a property. However, sometimes the sale is a few weeks ahead of the market. If prices are increasing, it may not show up in their analysis yet and the appraisal will reflect a lower value.

At the end of the day, the appraisal has to be a realistic evaluation of a property’s true market value and be backed up with data.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at

Debt and debt settlement services

The debt-to-income ratio has hit the headlines again. This time the ratio rose to 167.3 % in the fourth quarter of 2016 compared to 166.8% in the third quarter. That means for every dollar of disposable income, consumers owe $1.67. Approximately 63% of that debt is in mortgages.

While this increase worries some policy-makers, studies have shown that consumers have been able to pay their debt relatively easily. Low interest rates have allowed consumers to pay down more of their mortgage principal, with payments split almost evenly between interest and principal in the fourth quarter.

But for some, the debt load is unmanageable and they search for solutions. You are no doubt familiar with advertisements from debt settlement services that promise to settle a consumer’s outstanding debt, for a fee. The caveat is buyer beware. If you’re considering this option, make sure to do your research and find a reputable company to work with. Or, I may be able to refer you.

Before you pay upfront fees or service charges, I may be able to help. Much of what debt settlement services offer can overlap with the services of a licensed mortgage broker.

Here’s how it works. Mortgage brokers can arrange debt consolidation on a mortgage renewal or on a refinance. When arranging a consolidation mortgage loan on a refinance or renewal the amount of the mortgage principal may be increased to pay out the total debt amount. This becomes part of the mortgage commitment and a condition of the mortgage loan. On closing, your lawyer will disburse the funds to your creditors and register the new mortgage.

What you need to know
A refinance alters the terms and conditions of your mortgage; specifically you are increasing the amount of your mortgage to pay off debt. Your mortgage payment may or may not increase, depending on a number of factors, and you may incur a penalty to break your existing mortgage if you are refinancing midterm. Depending on your current mortgage you could be paying off the refinanced debt at a much lower interest rate, which could save you thousands of dollars in interest in the long run.

As with all renewals, it’s always a good idea to review your mortgage with a mortgage broker who can shop the rates for you and get you the best deal, tailored to your particular situation. And, if you decide to switch lenders, there are no penalties at renewal time.

One of these options may be the perfect solution if you’re struggling with debt. Call me today for more information.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at

The Four Types of Creditor Insurance

Home is more than a place you live. It’s your family’s haven from the world. But what if something happened to you? What would happen to the home you’ve invested so much in? You wouldn’t think about owning a home without insuring it, yet the odds of your house burning down is more remote compared to the odds of experiencing a life-changing event such as a job lay-off or a disabling accident.

Mortgage payments don’t stop when you’re unable to work so many home owners opt-in for mortgage creditor insurance. This type of mortgage protection insurance preserves ownership of your family’s home by making sure the mortgage keeps getting paid – even during the most difficult times.

Here are four types of mortgage insurance available:

Life Coverage: Mortgage life insurance provides security to both you and your insured co-borrower. If your co-borrower does not qualify for life insurance, you can still apply. Also known as mortgage insurance or creditor insurance, it’s offered by lending institutions and us. It is a life insurance policy that pays the balance of your mortgage to the lending institution if an insured person listed on the mortgage passes away.

Disability Coverage: This insurance is designed to pay a portion or all a homeowner’s mortgage payment if they become disabled — up to 24 months per occurrence. Individuals who opt to take advantage of this type of insurance need to take care to understand the policy completely. Determine the length of time the policy will pay mortgage payments during an episode of short-term or long-term disability. What dollar amount of the mortgage does the policy pay? Is there a waiting period associated with payment from the policy?

Critical Illness Coverage: What if it happens to you? When you survive a critical illness, you may not be able to return to work and your expenses could increase dramatically. If you are diagnosed with one of the 15 covered critical illnesses, based on our service provider’s criteria, which includes certain types of cancer, your mortgage payments are covered for 24 months, whether you return to work or not. Key questions to ask: What critical Illnesses are covered? What happens if I have an acute heart attack, recover in a few weeks or months, and return to work? Does my disability insurance cover me for living benefits? What cancers are covered? Do I need to take a medical examination? Mortgage Critical Illness Insurance is a benefit you enjoy while you are alive. It builds on your Mortgage Life Insurance to complete your protection.

Accidental Job Loss Coverage: If you are injured or are unable to work or become involuntarily unemployed, your monthly mortgage payments will be covered up to six months per occurrence.

If you don’t have any of these coverages now on your mortgage, we may be able to add them on.

Call me for more information.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at

Alternative lenders go mainstream

For some, getting a mortgage from a bank has become a bit more challenging – even if your credit score is good If you don’t qualify using the benchmark rate, regardless ofwhat mortgage rate and term you opt for – this has been called the” stresstest” — then you may be out of luck. With the introduction of new mortgagerules last year, the Government tightened mortgage lending guidelines inresponse to concerns that some markets in Canada are overheated and thatCanadian debt levels continue to increase.

The new mortgage rules have also had an impact on those who want to refinance their mortgage loan. And at renewal time, if you want to increase your existing loan, change your amortization or shop for a better rate, the rules may have an impact as well.

Despite the challenges, there are solutions. A bank is not the only option for a mortgage. The new mortgage rules have created an opportunity for a variety of specialized lenders to enter the market who are flexible and open to reviewing a variety of situations and has led to a growing pool of mortgage funds.

In a nutshell – they’ve gone mainstream
These lenders are not limited to private individuals with money to lend, either individually or as part of an investment pool. Mortgage brokers still have access to those funds; however, the market is also seeing an increase in the number of Mortgage Investment Corporations (MICs) as well as smaller lenders with products to fill the gap.

Many alternative lenders put more weight on the equity in a property, rather than on the work you do or on the credit challenges you may have.

Smaller institutional lenders in some regions across Canada, like credit unions, however, may offer specialized lending with affordable interest rates, reasonable lending fees and flexible underwriting.

A few benefits of specialized lending:

Quick closings: The key to a quick close is having your financing set up quickly — specialized lending can make that happen.
Terms of the loan: These loans are for short periods of time, usually no more than two or three years.
Great for investors: Because specialized lenders have flexibility, they will look at those fixer-upper rental properties with a keen eye and may fund both the purchase and the home improvements.
Diverse repayment options: This is especially helpful for entrepreneurs. Payments can be structured more creatively and may include interest-only payments and balloon payments at the end of the term or on closing of a sale.
Construction financing: Bank construction financing can be riddled with red tape. Private lending may get the borrower more money, and quicker access to construction draws, which in the end, could save time and money when building a home.

For more information and to find a lender who will meet your needs, call me today!

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at

Let PSCU Take Care of You

The idea of a credit union started simply. People wanted to work together to progress their savings and borrow successfully without using a big bank. Credit unions have been around since the 1940s and are becoming increasingly popular.

What is a credit union?

There are 40,000 credit unions worldwide in over 80 countries. Some countries have recently seen a move towards a majority using credit unions instead of big banks. Based around a community with a shared interest in how they wish to operate their money, credit unions can have any number of members.

All credit unions share similar goals:

  • To provide aid and assistance to members who need financial help
  • To support members on a regular basis
  • To provide lower rates on loans

Credit unions are popular because they want to see members save successfully and prosper in everyday finances.

Public Service Credit Union fits the ideal of a top credit union perfectly. Promoting an active interest in how its members look after their money since 1951, it is recognized as one of the best credit unions in Michigan.

What are the benefits of using Public Service Credit Union?

A feeling of community

In a credit union, you are not just a customer, you are a member of an association. Credit Unions are not-for-profit organizations, where any profits made are passed down to the members. Public Service Credit Union also provides members with a range of benefits to help them manage their finances on a daily basis. These include debt solution advice, insurance programs, and tax management.

Anywhere banking

Public Service Credit Union promotes ‘Anywhere Banking,’ an online system that allows customers to access their accounts from anywhere in the world. This system allows a transferral of funds, viewing account activity, and the ability to apply online for a personal loan.

As well as anywhere banking, Public Service Credit Union has branches located in many parts of Michigan and is available to discuss your financial needs 24/7, 365 days a year. Such a great network gives customers the freedom to speak to someone face to face, online or by telephone as soon as they require assistance.

Lower personal loan rates

One key benefit of Public Service Credit Union is that it offers far lower personal loan rates. A personal loan provides a payday cash advance, allowing the customer access to the funds they need when they need them. Money may be needed in an emergency, for example for bills or accident repairs, and quick loans may be the answer. Public Service Credit Union is more accessible in a difficult money situation simply by providing the option to apply for an online loan. This gives the customer greater freedom to move their financial plans forward without waiting for payday to do so. The lower interest rates also make them a more likely consideration for anyone looking for personal loans in Michigan.

What Checking Accounts Are Available from Public Service Credit Union?

On top of excellent personal loan management in Michigan, Public Service Credit Union also provides a variety of great checking accounts to suit any circumstance. Even the smallest sum of money will be well looked after through secure transactions and identity fraud protection.

  • Basic

The Basic Checking Account has all the features that are expected of a checking account. These include a debit card, 24 hours a day access, and mobile, online, and telephone banking. This account is made for those who need somewhere for their money to go without extras that will not be used. There is a monthly fee, but this is waived if the monthly balance of $250 is met.

  • Direct Advantage

The Direct Advantage Checking Account has all the features of the Basic Account but with a few extras added to it. There is no fee applied, through a monthly direct deposit of $800 is required. The added benefit of the Direct Advantage Checking Account is the 10 free Out of Network PIN transactions available each month.

  • Direct Advantage Plus

The Direct Advantage Plus Checking Account is more advanced than other checking accounts available. Designed to manage a greater income, this account is fee-free and has all the features of the Basic Account and the Direct Advantage Account. Dividends are also paid monthly, and there is free identity theft protection placed on the account. The direct deposit for this account amounts over $1500 each month, with an added expectation of 10 debit card transactions.

So what are you waiting for?

Which account will you choose? It is clear that Public Service Credit provides members with greater benefits and prospects for their money.

So choose Public Service Credit Union in Michigan today! Take advantage of the resources that the big banks provide but with the personal touch of a dedicated, friendly community.

Thinking of buying a vacation property?

When the weather in Canada turns cold and winter sets in, a lot of us think about a blue sky vacation, others think about buying a vacation property in the U.S. sunbelt or even in British Columbia where the weather is milder. Still others enjoy winter and look for a winter vacation property here or in the US.  While the allure of long beach walks, and the idea of hitting the ski hills just outside your chalet is attractive, the question is how to finance the dream. First do your research.

There are other considerations if buying in the U.S.

  • Your purchase could be subject to estate tax. That means, when you die, your heirs will not only have to shell out U.S. estate tax on the fair market value of that home, they would also be hit with Canadian income taxes.
  • Also, if you plan to rent out that property, then you’re subject to a whole host of issues.
  • Use a Realtor who is experienced with US property sales.

If the vacation property is in Canada, you still can refinance your existing home and purchase the property outright if you have the equity or you can use what you have as a down payment. The basic process of applying for and qualifying for a mortgage is the same as for your principle residence; however, lenders will look at many more variables when assessing a property.

Your strength as a borrower is important but equally as important is the property. Lenders will look at the location, its proximity to a major market, year-round access to the property, paved roads, etc.  Most lenders require at least 20% down. The rules changed in 2014 and they have just changed again. But don’t let that deter you if your dream is a vacation home.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at WWW.GUYTHEMORTGAGEGUY.COM

Fintech Gains a National Platform: Federal Regulator Plans To Accept Fintech Applications for Special Purpose National Bank Charters

The primary regulator of the nation’s largest banks, the Office of the Comptroller of the Currency (OCC), said Friday that it is considering issuing special purpose national bank charters to online lenders, payment processors and other financial-technology firms (Fintech).

Under an OCC charter, Fintech companies would be subject to consolidated regulatory review now reserved for traditional financial institutions. Still, proponents look at the move as a way to increase Fintech’s bargaining power and simplify the industry, which currently faces challenges in connection with regulatory compliance and expansion, e.g., in the case of lending requirements, state-by-state licensing and interest rate restrictions. If adopted, this move could have a major impact on marketplace and digital currency companies by providing a regulated national platform from which they may offer their services.

This announcement by Thomas Curry, Comptroller of the OCC, was in line with the Office’s innovation initiative set out in August 2015, which sought to identify ways to keep pace with advances in the financial sector while extending protections to new financial products. “[I]t will be much better for the health of the federal banking system and everyone who relies on these institutions, if these companies enter the system through a clearly marked front gate, rather than in some back door, where risks may not be as thoughtfully assessed and managed,” Mr. Curry explained at a conference at Georgetown University Law Center on Friday. He expounded that in the United States and United Kingdom alone, there are at least 4,000 Fintech firms, and worldwide investment in the sector increased from $1.8 billion to $24 billion in the past five years. This coincides with a new offering with online payday loan application at

OCC’S White Paper Proposal

The OCC’s Proposal outlines its authority to grant special purpose national bank charters,[6] and provides broad guidance regarding a proposed Fintech company’s application:

  • To be eligible, a company must conduct at least one of the three core banking functions: receiving deposits, lending money or paying checks.
  • Entities would have to meet baseline supervisory expectations that would “stress the importance of a detailed business plan, governance, capital, liquidity, compliance risk management, financial inclusion, recovery and resolution planning.”
  • Fintech firms would still be subject to existing state or federal regulatory oversight, where applicable. For example, Fintech chartered firms would not be able to accept government-insured deposits without approval from the Federal Deposit Insurance Corporation (FDIC). To this point, pursuant to state laws, Fintech chartered entities will maintain the same privileges and restrictions, which include preemption provisions added to the National Bank Act by Dodd-Frank, OCC’s preemption regulations, and applicable federal judicial precedent.
  • The chartering process would consist of four phases, which would provide multiple opportunities for the OCC to interface with a respective company and provide both input and impose certain expectations for approval. The phases include: a) pre-filing stage, where potential applicants engage with the OCC in formal and informal planning meetings and prepare a business plan; b) the filing stage, where an organizer submits an application and publishes a notice of the charter application; c) the review and evaluation stage, where the OCC conducts background and field investigations; and d) the decision stage. This final stage is broken into three subparts: 1) a preliminary conditional approval phase (OCC decides whether to grant preliminary conditional approval); 2) organization phase (the bank raises capital, prepares for opening and the OCC conducts a preopening examination); and 3) the final approval phase.

The OCC is expected to receive extensive comment following months of deliberation inside the OCC as to whether it would become the first US regulator to allow nonbank Fintech firms to receive some powers that other full-fledged banks now have.

What the new mortgage changes may mean to you…

What the new mortgage changes may mean to you

Ottawa has announced new rules in response to concerns that some markets in Canada are overheated and that Canadian debt levels continue to increase. These changes are meant to alleviate risk in Canada’s housing market.

Here are the changes in a nutshell:

  • “A Mortgage Rate Stress Test” for all insured mortgages. This means that all insured mortgages will now be qualified at the Bank of Canada benchmark rate, currently at 4.64%, instead of the contract rate offered on their commitment.  For example, if you have a commitment for 2.49% on a five-year fixed rate, then you would have to qualify at the benchmark rate of 4.64%, rather than the commitment rate.  That does not mean your payments would increase to the higher amount, just that you would need to be able to afford the payments as if they were at that higher amount. This change is scheduled to come into effect on October 17, 2016.
  • “Safer Lending”. This means that mortgages insured through portfolio or bulk insurance must now meet the same criteria as those that are high ratio insured.  This change is scheduled to come into effect on November 30, 2016.
  • Closing “loopholes” on taxes. This refers to capital gains exemptions on principal residences that should apply only to residents of Canada.

The broader implications

We don’t know yet how this may affect the number of people who will no longer qualify, whether first time home buyers, those moving up or those who wish to refinance.  From what we know so far, those who already have mortgage insurance policies in place should continue to be qualified at the contract rate going forward and should have no problem at renewal.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at WWW.GUYTHEMORTGAGEGUY.COM