presents TERMS YOU NEED TO KNOW - 101 TRANSLATING MORTGAGE INDUSTRY TERMS INTO EVERY DAY LANGUAGE
Jun 13, 2015
presents
TERMS YOU NEED TO KNOW - 101
TRANSLATING MORTGAGE INDUSTRY TERMS INTO EVERY DAY LANGUAGE
A little about Geoff Lee…
√ Co founder and Director of the Imani Orphan Care Foundation – www.imaniorphancare.com
√ Over 22 years of real estate experience and investment
√ Ranked amongst the top 3% mortgage brokers in Canada by CMP magazine
√ Finalist in 2014 CMP Canadian Mortgage Awards for Best Customer
Service from an independent office
LET’S RECAP…
CREDIT 101
• What a credit score is…
• All you really need is 680 – 800 to get the best mortgage rate…
• How the credit score is calculated…
• How to fix your credit problems…
MORTGAGE QUALIFICATION 101
• How to qualify for a mortgage either self-employed or employed…
• Stated Income…
• Gross Debt Service Ratio and Total Debt Service Ratio
• Mortgage Insurance
GIVE IT TO ME IN ENGLISH PLEASE!
So what are the terms you need to know???• High Ratio Mortgage
• You are putting less than 20% down
• Requires mortgage insurance
• Conventional Mortgage• You are putting more than 20% down
• Generally does not require mortgage insurance
GIVE IT TO ME IN ENGLISH PLEASE!
• Subject Property• What you are buying
• Non Subject Property• Other properties that you own
GIVE IT TO ME IN ENGLISH PLEASE!
• LOAN to VALUE (LTV)• What you owe on your “loan” to what to what the property is valued at
• SECURED and UNSECURED Lines of Credit• Secured
• “Tied” to something you own – collateral
• Unsecured
• Not “Tied” to anything – no collateral
•
GIVE IT TO ME IN ENGLISH PLEASE!
• Amortization• The length of time it takes to pay off your mortgage
• Affects your monthly payment at times much more than the rate
• Fixed term mortgage• Locked in for a “fixed term” you have chosen
• 1 -1 0 years
• Penalty if you break the “fixed term”
GIVE IT TO ME IN ENGLISH PLEASE!
• Variable Rate Mortgage (VRM)• Can be Open
• No penalty if you break
• Can be FIXED TERM
• Penalty if you break.
GIVE IT TO ME IN ENGLISH PLEASE!
• FLEXDOWN• Using untraditional sources for your down payment
• Borrowing from
• Employer
• Credit Cards
• Unsecured Lines of Credit
GIVE IT TO ME IN ENGLISH PLEASE!
• STATED INCOME – self employed (BFS)• What you report as income to Canada Revenue Service vs what you “STATE” your income to be to
the Lender.
• REFINANCING• To take the money that you owe and take out a new loan to pay off.
GIVE IT TO ME IN ENGLISH PLEASE!
• RENTALS• ADDBACK (subject and non subject properties)
• To take a % of the rental income from investment properties and ADD it BACK to your income
• OFF SETS
• Reduces the rental expense add balance back to Gross Income
GIVE IT TO ME IN ENGLISH PLEASE!
• NET RENTS (non subject properties)• Taking the 2 year reporting average from your T1 Generals (Statement of Rental Activities)
• Determine if there is a surplus/loss
• Input that surplus/loss into the application
• Do not include any NON SUBJECT properties debt into the file
GIVE IT TO ME IN ENGLISH PLEASE!
• DEBT CALCULATION RATIOS (DCR) (subject and non subject properties)• Calculate the NON SUBJECT and SUBJECT property debt
• Determine if there is a surplus/loss
• Input that surplus/loss into your application
• Do not include NON SUBJECT and SUBJECT properties debt into the application
“The ONLY thing constant in life is change…”
Anonymous
“Lasting Quote….”
Get in touch with us….
www.geoffleemortgage.comTwitter: @geoffleecaLinked In: http://ca.linkedin.com/in/geoffleemortgage/Email: [email protected]: 1.778.552.3489
Thanks so much for attending the GLM Mortgage Group workshop – MORTGAGE QUALIFICATIOM 101.
If you have any questions please call me at 778.552.3489 or email me at [email protected].
“We specialize in getting you the fastest “YES” at the SHARPEST RATE… GUARANTEED!”
- Geoff Lee