Toronto Mortgage Source

Mortgages for the Self Employed

If you are one of the more than 7 million Canadians who are either self employed or are paid on a 100% commission basis, then you may be wondering what mortgage options are available to you. Specifically, you may be wondering what proof of income is required given that the nature of running a business sometimes entails the understatement of your take home pay. Fortunately, there are some great mortgage options available to you that do not require the statement of any type of income. In other words, proof of income is not required for the self employed. Under the programs available, the self employed are still able to enjoy the lowest interest rates on the market, and can apply down payments of as little as 5%. There are a few details and requirements to consider when investigating such a mortgage strategy, however. Here are a few:

-         Must have full Canadian citizenship status.

-         At least two years of self employment proof is required.

-         No income tax arrears.

-         Credit score is a major consideration, especially in relation to the amount of down payment:

o       5-10% Down Payment  - 700 Minimum

o       10-15% Down Payment – 650 Minimum

o       15-25% Down Payment – 620 Minimum

For more details on the types of self employed programs available and how they can apply to you, contact me at your convenience.

How Mortgage Brokers are Benefiting Consumers

 Most Canadians still attain their mortgage from their local Bank. Although more individuals are shopping around for better terms and rates, the majority of Canadians do not receive their best possible mortgage. By using the services of a Mortgage Broker, consumers can be confident that their interest, not the Banks, is kept at the forefront, and that they will be provided the best possible rate and terms in the market, because the services of a Mortgage Broker represent all lenders in the mortgage market.

A Canadian Institute of Mortgage Brokers and Lenders (CIMBL) survey quantifies the value that mortgage brokers add with several interesting statistics. 

Some notable points include:

• Mortgage brokers, in part, have assisted Canadians negotiate roughly 1.38% off typical posted bank rates in the last year.
• The number of Canadians using mortgage brokers has jumped 24% since 2005.
• Among those who renewed or refinanced over the past 12 months, 84% remain with the same lender, most likely a mistake given the intense competition out there.
• 88% of Canadians say they are happy with their mortgage terms.   

So even if you are in talks with your Bank about attaining a mortgage, consider comparing the Bank’s service with that of a Broker. Mortgage Brokers focus on only one financial service, Mortgages, and this focus can help save you thousands of dollars over many years and lead to much a faster pay off.

Brent Richardson

Mortgage Identity Theft and How to Prevent It

Identity Theft

The mortgage industry has become a hot area for fraud. This, unfortunately, makes sense since such large amounts of money are involved. The central medium that fraudsters use for the achievement of their crimes is Identity Theft. Moreover, some Mortgage Brokers and Agents employ sloppy client privacy policies that help contribute to this problem. Put simply, a fraudster can steel your identity, take out a mortgage in your name, and ultimately ‘abscond’ with much of that money. This happens to the tune of over $1 Billion per year in Canada. What makes things even worse is that these fraudsters are very difficult to catch, and in many cases, it is very easy to accomplish. It’s one of those things that doesn’t happen to everyone, but it does happen to some. After reading this article and applying the advice, you can be more assured that it will not happen to you  

What, more specifically, is Identity Theft?

According to the Canadian RCMP website, identity theft is, “… the stealing, misrepresenting or hijacking the identity of another person or business and provides an effective means to commit other crimes”. For it to be accomplished, “vital information such as name, address, date of birth, social insurance number, and mother’s maiden name need to be acquired... The identity thief can take over the victim’s financial accounts, open new bank accounts, transfer bank balances, apply for loans, credit cards and other services, purchase vehicles, take luxury vacations, and so on”.

 

How do I prevent it?

In order to prevent Identity Theft and the resulting nightmare it would cause for you, follow this advice:

- Do not carry your SIN card in your wallet. This card is equilivant of your financial DNA, and if it gets into the wrong hands, unimaginable damage can be done to you. Memorize the number or keep the card at home.

- Shred your sensitive documents before putting them in the trash. Fraudsters are likely to check your garbage for letters that carry personal information when preparing to steal your identity.

- Sign all credit cards when you receive them and cancel ones that you don’t use.

- Never leave receipts around, destroy personal info that you don’t need.

- NEVER give your SIN or banking info over the phone.

- Ensure that the Mortgage Broker, or any one else that handles your personal information, has a good privacy policy and privacy control measures. Don’t be afraid to ask questions about how your information is treated.

 

This last part about ensuring that your partners in finance use the same, or better, diligence that you use is very important. Not all Mortgage Professionals use high levels of diligence and this is contributing to the over $1 Billion in fraud found yearly in Canada. Feel free to post any questions or comments below, or give me a call for more information on how to protect yourself against identity theft.