Invis - Richard Batke Mortgage Broker, Wilkins & Associates, Penticton BC - Richard's Blog

Managing your debt is more important now than ever! 

At best, consumer debt limits your real estate purchasing power and reduces your cash flow, and at worst can cost you your home and force you into bankruptcy.

I have recently seen several clients who wanted to consolidate their debt into their mortgage only to find that there is no equity left in their home.  As real estate values decrease, people may find themselves owing more than their home is worth.

Others have tried to qualify for a mortgage, having great income, however, the consumer debt and car loan payments halted their dream until they make the necessary changes in their debt management.

Times have changed!

1. We can no longer assume that our homes will be continually increasing in value over the next few years, giving us the opportunity to consolidate the debt for items purchased now. 

2. New legislation regarding mortgage lending has caused a reduction in the buying power of most individuals.  

This means that if you want to purchase a home today, you will have to be able to carry a larger mortgage payment now than you would have for that same home before April 19 when the changes took effect.

Minimizing your consumer debt load is
more important than ever! 

We need to manage our debt by:

     1.  Adjust our thinking and actions from being overly consumptive to more
          frugal and cost effective. 
     2.  Reduce our consumer debt load and stop paying needless amounts of
          interest.
     3.  Get back to simple financial basics as shown in the video above.

I have access to money coaches, financial advisors and I can also help you beat the debt monster with proven debt management strategies.

It is easier than you think, debt management simply requires a desire to change and the discipline to do it.

In our present economic times, the ones who will be the best positioned to capitalize on the opportunities they bring will be the ones that have successfully managed their debt and are not saddled up with consumer debt payments, those who have equity in their homes and a solid financial foundation and financial plan.

My Wife and I paid our home out in 5 years with some determination and creativity, saving countless $$ in interest payments.

Contact Richard Batke to learn how you can eliminate
your debt as fast as possible. 

Richard Batke - Mortgage Broker

2004 Main St.
Penticton, BC
V2A 5H4

Direct: 250-809-0285
email: richardbatke@invis.ca
web: www.richardbatke.com
map: 2004 Main St., Penticton, BC

Richard Batke
Mortgage Broker

* Purchase * Refinance * Renewals * Debt Consolidation *
* Business Equipment Leasing *

Serving the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC
Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC

According to the 2010 Mortgage Consumer Survey from Canada Mortgage and Housing (CMHC) mortgage brokers continue to enjoy a 45% market share of all first time home buyers, 39% of all real estate buyers and show significant favour for refinances.

Mortgage Broker Use

Mortgage consumers included these benefits of using a mortgage broker:

  - They are able to get the best deal or rate for their
clients

  - They are convenient 

  - They offer time savings when obtaining a mortgage

The necessity of using a Mortgage Broker has
dramatically increased!

The mortgage lending landscape has changed so much recently, that you need to be intimately acquainted with each mortgage lender's policies.

For example:

The value of Rental Income

Most mortgage lenders do not value the rental income as they have in the past, drastically reducing the purchasing power of rental income.

For specific examples, see my previous blog entry: Rental Properties: How the new mortgage guidelines affect your buying power.

Today, there are very few lenders who will give you the full benefit from your rental income, and if you are shopping for yourself, the odds are that you not find the rental policy that you need.

Acceptable Income Types

Each lender has a list of income sources that they allow you to use as income. Some allow the use of Child Tax Benefits, some don't. Some allow Universal Child Care allowance, some don't. The list goes on.

Mortgage Qualification Criteria

Now most First Time Home Buyers will find themselves getting a 5 year fixed rate term as the savings and extra leverage of Variable rate Mortgages have been reserved for those buying a home less than they are qualified for and those with 20% down payment.

for specific examples, see First Time Home Buyer: Your Buying Power Has Changed

When you your purchasing power has been has been reduced, it is vitally important that you can make use of ALL your resources when qualifying for the home you want to buy.

If you have a lending institution who has the most conservative mortgage lending guidelines, they will decline your application.

If you use a Mortgage Broker, you will enjoy not only the best interest rates and mortgage products,
but you will get the maximum benefit from all of your specific resources!

I shop your mortgage to many different mortgage lenders including Chartered Banks, Credit Unions, "Mortgage Only" lenders and much more.

I have creative mortgage products including:

  - Home Equity Line of Credit
    (HELOC)

  - 50 / 50 Mortgage - combined variable
     and fixed rate mortgage

  - Re-advancable Mortgage - not a Line
     of Credit, though the funds can be
re-advanced

  - Simple fixed or variable
    rate mortgages

Richard Batke - Mortgage Broker

2004 Main St.
Penticton, BC
V2A 5H4

Direct: 250-809-0285
email: richardbatke@invis.ca
web: www.thehomefinancecentre.com
map: 2004 Main St., Penticton, BC

Richard Batke
Mortgage Broker

* Purchase * Refinance * Renewal * Debt Consolidation *
* Business Equipment Leasing *

Serving the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC
Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC

Rental Properties: How the new mortgage guidelines affect your buying power, by Richard Batke, Mortgage Broker, Penticton and Summerland BC

Purchasing Power and Rental Properties - How have the new mortgage lending guidelines in Canada affected you?

The Following comparison is using today's mortgage interest rates for all calculations.

Example 1: Non Owner Occupied Rental Property

Before April 19 Mortgage Lending Changes:

For Someone qualified to carry a mortgage payment of $1200/month for a rental property that has $1200/month income:

1. $237 900 purchase price with 5%
    down payment

2. $313 000 purchase price with 20%
    down payment

1. 5% down payment no longer available - 20% down payment minimum

2. $127 500 purchase price with 20% down for most lenders.

3. $313 000 purchase price for a select few lenders.

Summary:

CMHC is no longer participating in the non owner occupied rental market. This means that you must have a minimum of 20% down to invest in real estate.

It is also more important that ever for you to be aware of the lending policies of the many different mortgage lenders.

They can simply tell you that you are not qualified for your purchase because they are one of the vast majority of lenders that no longer allow you to get the maximum benefit from the income of your rental property.

Example 2: Owner Occupied Rental Property

Principal residence purchase with a self contained rental suite. This is also true for a duplex, triplex and fourplex.

Before April 19 Mortgage Lending Changes:

For Someone qualified to carry a mortgage payment of $1800/month:

1. $395 400 purchase price with 5% down
    payment

2. $531 600 purchase price with 5% down
    payment, $800/mo rental income from
    suite

3. $631 250 purchase price with 20% down
    payment, $800/mo rental income from
    suite

After April 19 Mortgage Lending Changes:

1. $395 400 purchase price with 5% down
payment

2. $421 000 purchase price with 5% down
payment, 800/mo rental income from
suite

3. $631 250 purchase price with 20% down
payment, 800/mo rental income from
suite

Summary:

For owner occupied rental properties, your purchasing power has been significantly reduced if you do not have a minimum 20% down payment. This does not negate the benefit you receive by using a rental suite to pay your mortgage down faster! We are evaluating purchasing power only.

In this example, there was over $110 000 reduction in your buying power!

Overall Summary:

The new mortgage lending guidelines are ensuring that those who have equity are the ones who enjoy the maximum leverage from their resources. You need to become one of them, and I can help you get there.

Furthermore, different mortgage lenders evaluate loan obligations differently, some allow child tax benefits and UCC as income, some don't. The days of simple mortgage underwriting are gone, so make sure that you have a well trained and experienced mortgage broker in your corner.

Whatever you do, do not limit yourself to 1 or 2 banks. In order to be sure that you are getting the best mortgage, you need to have access to many lenders. I have access to more than 80.

Now more than ever it is critically important to use the services of a Mortgage Broker who is not only experienced and intimately acquainted with the individual lender's policies but one who has access to the few lenders who will continue to offer the previous rental income model.

This is not an extraordinary change, it is returning to similar guidelines we have experienced in the past, though we can still have a minimum down payment of 5%, rather than the old policy of 20% from years gone by.

The real estate market will adjust to these changes and
the market will find its equilibrium once again.

Richard Batke - Mortgage Broker

2004 Main St. Penticton, BC V2A 5H4

Direct: 250-809-0285
email: richardbatke@invis.ca
web: www.richardbatke.com
blog: www.southokanaganmortgages.com
map: 2004 Main St., Penticton, BC

Richard Batke Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation *
* Business Equipment Leasing *

Serving the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC | Oliver BC
Osooyoos BC | Keremeos BC | Princeton BC

Buying power - How the new mortgage guidelines affect the First Time Home Buyer by Richard Batke, Mortgage Broker, Penticton and Summerland BC

The new mortgage lending guidelines are now in effect in Canada, here is how they affect First Time Home Buyers.

The Following comparison is using today's mortgage interest rates for all calculations.

Before April 19 Mortgage Lending Changes:

Someone qualified to carry a $1 500/month mortgage payment could purchase a home worth:

1. $394 200 with a 2 year term, Fixed
    Rate Mortgage

2. $365 500 with a 3 year term, Fixed
    Rate Mortgage

3. $365 500 with a Variable Rate
    Mortgage

4. $329 500 with a 5 Year Fixed Rate

1. $276 100 for all closed terms less than 5 years, including Variable
    Rate Mortgages

2. $329 500 with a 5 Year Fixed Rate

Purchase power reduction:  $39 000

Summary:

Granted 2 year terms for first time home buyers were not popular for many reasons, the variable rate mortgage was.  The reduction in this example from the 3 year term and variable rate mortgage is $36 000 as compared to the 5 year fixed rate mortgage.

As you can see, the new mortgage lending guidelines have effectively eliminated the variable rate mortgage and all mortgage terms less than 5 years as viable options for first time home buyers with less than 20% down payment.

Said another way, all first time home buyers with less than 20% down payment will likely use the 5 year fixed rate mortgage to finance their home, unless they buy a home that is worth less than the maximum amount they are qualified to buy.

This can be an excellent choice for some people, but that is a topic for another blog entry.

This is not an extraordinary change, it is returning to similar guidelines we have experienced in the past, though we can still have a minimum down payment of 5%, rather than the old policy of 20% from years gone by.

The real estate market will adjust accordingly, and settle down into business as usual.

Richard Batke - Mortgage Broker

2004 Main St. Penticton, BC V2A 5H4

Direct: 250-809-0285
email: richardbatke@invis.ca
web: www.richardbatke.com
blog: www.southokanaganmortgages.com
map: 2004 Main St., Penticton, BC

Richard Batke Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation *
* Business Equipment Leasing *

Serving the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC | Oliver BC
 Osooyoos BC | Keremeos BC | Princeton BC

Variable Rate Mortgages & Short Term Fixed Rate Mortgages

As of April 19 these changes take effect:  All variable rate mortgages and fixed rate mortgages with terms of less than 5 years, CMHC insured (i.e. less than 20% down payment purchase or more than 80% Loan to Value refinance), will all be qualified at the current 5 year POSTED rate.

This means, that your money will not go as far for high ratio mortgages.

Someone who would qualify for a $200 000 mortgage now would qualify for $156 600 under the new rules for mortgages.

5 Year Fixed Rate Mortgages

5 year fixed rate mortgages for purchases will remain unchanged.  Today, and under the new changes on April 19, the you would still qualify at the contract rate. 

Today's 5 year fixed rate is 3.69%.

The Stated Income Program will only be available for those who have been in business LESS than 3 years.

If you have been self employed LESS than 2 years, your business must be in the EXACT line of work as your previous employment.  Otherwise, the BFS Stated Income available for a window of less than 1 year, between your second and third year of self employment.

CMHC feels that after 3 years, business owners should be producing enough taxable income to qualify for their mortgages.

The maximum loan to value for the Stated Income Program has also changed:

Purchases need 10% down minimum, and

Refinances can go as high as 85% loan to value.

Be sure to plan ahead if you are self employed!

Richard Batke - Mortgage Broker 2004 Main St. Penticton, BC V2A 5H4 Direct: 250-809-0285
email: richardbatke@invis.ca
web: www.thehomefinancecentre.com
blog: www.southokanaganmortgages.com
map: 2004 Main St., Penticton, BC

Richard Batke Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation * * Business Equipment Leasing *

Serving the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC

Variable Rate Mortgages:

Borrowers must qualify at the current 5 year fixed rate, instead of a 3 year fixed rate, which is lower. This will end the ability to qualify for a larger mortgage by choosing a variable rate mortgage.

Rental Properties:

Houses with basement suites are also a great option.

Refinances:

Taking the equity out of your home will be limited to a maximum of 90% Loan to Value, from the current 95%LTV. Although this will impact some borrowers, it is not that great of a change, and it does protect you if the value of your home decreases.

If you are wanting to access your equity, one of the most versatile ways to do it is through one of the Home Equity Line of Credit products that I have available with a revolving portion at Prime +0.5%, with a free legal and appraisal package. 

This option allows you to pay your equity take out faster and allows you to re-advance at will. Please feel free to contact me with any questions, and remember that if you will be affected by any of these changes, now is the time to act as the changes will be in effect on April 19, and some lenders may change their guidelines before that time.

Richard Batke - Mortgage Broker

2004 Main St.
Penticton, BC
V2A 5H4

Direct: 250-809-0285
email: richardbatke@invis.ca
web: www.thehomefinancecentre.com
map: 2004 Main St., Penticton, BC

Richard Batke
Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation *
* Business Equipment Leasing *

Serving the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC
Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC

Richard Batke, Mortgage Broker:  Mortgage payments from $852/ mo with 5% down!  Victoria Place Condo Development is for sale in downtown Summerland BC featuring six 1 and 2 bedroom floor plans to choose from.

Victoria Place Condo Development has the features including:

• 6 Open Floor Plans
• 2 Bedroom or 1 Bedroom and Den
• 9' Ceilings
• Stainless Steel Appliances
• Granite Countertops
• Quality Finishing throughout
• Secure Parking
• Great Location!
• Walk to all amenities.

Contact Richard Batke today to get pre-approved and discuss your financing options!

*  Based on 5% down payment, P&I pmts including CMHC fee.  Property taxes and strata fees not incl.  Rates subject to change without notice, OAC, E&OE

Raymond Maaske, Realtor

Phone: 250-488-8764
email: raymondmaaske@gmail.com
web: www.okanaganstar.com

Richard Batke - Mortgage Broker

2004 Main St.
Penticton, BC
V2A 5H4

Direct:  250-809-0285
email:   richardbatke@invis.ca
web: www.thehomefinancecentre.com
map:   2004 Main St., Penticton, BC 

Richard Batke
Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation *
* Business Equipment Leasing *

Mortgages and Leasing in the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC
Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC

Is a variable rate mortgage right for you?  Richard Batke, mortgage broker with Invis explains the variable rate mortgage to help you find out! 

The interest rate on a variable rate mortgage is tied to the lender's prime rate either by a premium or discount.

VRMs are available in 3 and 5 year terms.

How Does It Work?

Payments can be either a fixed constant amount, or the payment can change with the interest rate, depending on the mortgage lender and your preference.

You have the option to lock in your rate in to the current fixed rate for the remaining term, should you choose to do so. Individual lenders have slightly different lock in policies, so be sure to understand the terms of your contract, which your mortgage broker can explain to you.

Lower interest rates.  I have clients that have been enjoying a mortgage interest rate of 1.5% for the last year. They have gained tremendous equity in their homes since a good portion of their payment is paying down the principal, instead of interest.

What are the Risks?

When you go to lock in your variable rate, you run the risk that fixed rates may be higher than you had anticipated.

Is a Variable Rate Mortgage Right for Me?

When variable rate mortgages may not be a good choice:

2.  If your income is likely to remain constant and you want to have a constant mortgage payment.

When variable rate mortgages may be a good choice:

1.  If you are comfortable with changing interest rates and want to be involved in managing your mortgage, or

2.  If you are considering a short term mortgage, for example 2 year term, a VRM would also make sense.  Prime rate would have to increase by over 1% in 2 years to negate the savings enjoyed with the VRM.  This is not likely to occur, and if it was occurring, you could still lock in at a current fixed rate.

Richard Batke - Mortgage Broker

2004 Main St.
Penticton, BC
V2A 5H4

Direct:  250-809-0285
email:   richardbatke@invis.ca
web:www.thehomefinancecentre.com
map:   2004 Main St., Penticton, BC 

Richard Batke
Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation *
* Business Equipment Leasing *

Mortgages and Leasing in the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC
Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC

Richard Batke is a Mobile Mortgage Specialist in Penticton, BC serving the South Okanagan. Book your appointment now: 250-809-0285 or visit www.thehomefinancecentre.com.

I represent you!  I do not work for, or represent any lender, my only goal is to connect you with the mortgage product and lender that fits you best, at the lowest rate available.

I work for you and negotiate in your best interests only!

• Chartered Banks
• Credit Unions
• Regional Lenders
• "Mortgage Broker Only" Lenders
• Private Lenders

• Home Equity Line of Credit:
  
  I have several lenders offering HELOC's, each with different qualification criteria and options. You can protect yourself from rising interest rates by segmenting your mortgage balance into any combination of variable or fixed rates and have access to the equity in your home through a revolving line of credit!
  
  
• 50/50 Variable / Fixed Rate Mortgage:
  
  Not sure if you want a variable or fixed rate? You can have both. This allows you to take advantage of today's historically low fixed interest rates and have the other half in a variable rate that can be locked in at any time. It is a great option to take advantage of today's low interest rates and minimize the risk associated with a variable rate mortgage!
  
  
• 3 year term variable rate mortgages:
  
  Variable rate mortgages are typically offered with 5 year term, however I have lenders offering exceptionally low rates for 3 year terms!
  
  
• Rate specials and Quick Close offers.

• I save you time:
  by sourcing mortgage for you
  
  
• I save you money:
  by negotiating your mortgage for you
  
  
• Convenience:
  I can meet with you at a time and place that fits your schedule
  
  
• I give you more options:
  a very wide variety of lenders
  
  
• I preserve your credit score:
  I need only one copy of your credit report to shop all available lenders

Richard Batke - Mortgage Broker

2004 Main St.
Penticton, BC
V2A 5H4

Direct:  250-809-0285
email:   richardbatke@invis.ca
web:   www.thehomefinancecentre.com
map:   2004 Main St., Penticton, BC 

Richard Batke
Mortgage Broker

* Purchase * Refinance * Renew * Debt Consolidation *
* Business Equipment Leasing *

Mortgages and Leasing in the South Okanagan, including:

Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC
Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC