How to Talk to Your Parents about Reverse Mortgages.

General Trish Pigott 26 Apr

Some more good information about Reverse Mortgages from the Dominion Lending Centres House Blog. 

Talking about money is one of the last taboos and can make people feel very uncomfortable – a feeling that’s only amplified when it comes to talking about your parents’ money. However, when a conversation is difficult, that normally means it’s worthwhile having; and getting transparency on your parents’ financial situation can help you help them make the best financial decisions for their future.

If you think a reverse mortgage would be beneficial to your parents, we’ve put together some top tips to help you broach the topic with them.

Sensitivity is Key

Your parents may feel uncomfortable talking about their finances with you, especially if they have any worries regarding their situation, so be sure to approach any financial talk with sensitivity. Listen to them, show empathy, give them the space to speak, and show your willingness to help them find the solution that works for them.

You might also want to reassure them that you have no expectations regarding inheritance and that you’d rather they live their retirement the way they’ve always wanted.

Choose the Right Time

Conversations around finances mustn’t be rushed so set a date for the conversation when you both have plenty of time. If possible, meet up face to face and give the conversation your full attention – don’t do chores as you talk.

Start the Conversation Right

There are several ways of broaching the topic of reverse mortgages with your parents. If you’re comfortable being direct, you could simply ask: “Mom, are your finances ok?”.

If you’d rather be more subtle, you could start the conversation in a more roundabout way. Perhaps you could ask about the house and whether there’s anything they’d like to update, or maybe you ask about their retirement and whether they’re able to do all the things they’d like to.

These conversations can lead naturally into a discussion about monthly income, assets, and savings and provide an opportunity to explore how the reverse mortgage can help them increase their cash flow and boost their standard of living – all while staying in their own home!

Come Prepared

While you don’t need to prepare an entire script, it’s a good idea to think about what you’ll say beforehand. Do some research on the CHIP Reverse Mortgage and get a clear idea of how it would benefit your parents. Think about the questions they might have and come up with some answers.

It’s also a good idea to bring resources with you such as a CHIP Reverse Mortgage brochure or our new book Home Run: The Reverse Mortgage Advantage, which takes a deep dive into using reverse mortgages as a strategic retirement tool.

Follow Up the Conversation

Don’t ask for a reaction or any kind of decision right away. Give your parents time to digest what you’ve spoken about, re-read any information you’ve given them, and think about any questions they have. Don’t expect one chat to accomplish everything, follow up in the next few days with a call.

Talking about finances is difficult at the best of times – even more so when the finances in question are your parents’. But hopefully, with the help of these tips, it’s a conversation you’ll now find easier to have. ~ This article was provided to DLC from Sue Pimento

If you have any further questions about reverse mortgages, or would like to see if this would work for you and your family, you can contact us at 604-552-6190, email us at support@primexmortgages.com or CLICK HERE to book a free call with Trish!

Trish & The Primex Team 

 

How to provide a tax-free gift to your children with the CHIP Reverse Mortgage.

Home Tips Trish Pigott 19 Apr

The current economic landscape can be challenging for young Canadians to navigate as they face uncertainty with heightened interest rates and inflation.

This can be frustrating as they are just starting to build their career, considering buying a home or starting a family. If you are a parent, you may be thinking about how you can help your child during this period.

The CHIP Reverse Mortgage by HomeEquity Bank is a sound financial solution that can help you support your loved ones by providing a tax-free gift.

The Gift of Early Inheritance 

As a parent, you may want to provide an early inheritance to see your adult children use the funds to improve their lives in a time of need.

By giving an early inheritance, you can avoid probate fees (estate administration tax) and save money by bringing you to a lower tax bracket (*HomeEquity Bank requires all clients to receive independent legal advice to review the mortgage contract and ensure they fully understand the terms and conditions). With an early inheritance, your children can pay for their wedding, start a business, pay off student loans, make a down payment on their home, and much more.

Speak to your tax specialist for more details.

How the CHIP Reverse Mortgage Works

You may have heard of people using a home equity line of credit (HELOC) or liquidating their investments to give an early inheritance. However, there are disadvantages associated with loss of earnings or tax payable when it is time to sell their investments.

The CHIP Reverse Mortgage by HomeEquity Bank allows you to unlock up to 55% of the equity in your home without any of these challenges. With the CHIP Reverse Mortgage, your investments remain intact, and no monthly mortgage payments are required. Therefore, your income is not affected, and best of all, the money you get from the CHIP Reverse Mortgage is tax-free!

Interested in giving a gift to your children or would like to know more about eh CHIP Reverse Mortgage? Contact us at 604-552-6190 to find out if this product is right for you and your family.

You can also CLICK HERE to book a free call with Trish to review your mortgage!

Trish & The Primex Team 

Bank of Canada’s April Announcement & What This Means For You.

General Trish Pigott 12 Apr

The Bank Of Canada announced this morning to keep their key overnight rate of 4.5%. As the Bank is still waiting to assess the impact of its previous eight consecutive rate hikes.

Previous Bank of Canada announcement also decided to keep the current interest rate. But It was threatened that it was conditional, making it clear that they will be ready to raise interest rates further if inflation doesn’t come down quickly enough.

Most forecasters expected the Bank to leave its key lending rate at 4.5% this Wednesday morning. Investors seem to agree, with trading on the overnight swaps market indicating less than a 10% chance of a change. But CIBC chief economist Avery Shenfeld says the bank may add cautionary language to its announcement that it could restart its inflation-fighting rate hikes again.

The Bank of Canada says they expect the annual inflation rate to fall to around 2-3% by mid-year. However, the poll suggests that inflation is still running at 5.2%, well over twice the BoC’s 2% target.

In March, the BoC became the first major central bank to stop its aggressive hiking cycle and is currently on a conditional pause. A majority of forecasters in the Reuters poll, 23 out of 31, believe that the rate will remain unchanged for the rest of 2023.

The BoC Deputy Governor Toni Gravelle said the Canadian banking system had a well-earned international reputation for stability, suggesting that policymakers are more focused on inflation and how the economy is performing.

Have questions about today’s announcement? Don’t hesitate to contact us at the office at 604-552-6190. Or you can CLICK HERE to book a quick call to review your mortgage!

Trish & The Primex Team 

Are you 55+?

General Trish Pigott 5 Apr

Are you 55+? Or are your loved ones retired?

Did you know that there is a great product for those 55+ to access their home’s equity tax free and not make any mortgage payments?

A reverse mortgage is a versatile and flexible financial solution for Canadians in their retirement years. Homeowners 55+ are unlocking their home equity for tax-free funds that don’t have to be repaid until they decide to sell their homes.

Contrary to popular belief, with a reverse mortgage the homeowner will remain on the title and ownership of the home. It will also pay off your conventional mortgage along with any other secured debt, and requires no monthly payments as long as the homeowner is living in the home. But HomeEquity Bank can secure up to three properties for a client.

Consider these four reasons Canadians 55+ turn to the CHIP Reverse Mortgage by HomeEquity Bank:

  1. Alleviate the stress of debt.

You are struggling with mortgage payments and credit card bills, prefer not to tap into savings or investment portfolios, or are incurring more debt due to unavoidable expenses.

  1. Pay for unplanned expenses.

You are faced with unexpected home repairs such as a leaky roof, retrofitting for mobility reasons, or need to hire in-home healthcare to assist with day-to-day.

  1. Want to live life to the fullest.

You have more time to do the things you want – but not the funds. For example, you want to purchase a summer property or take your dream vacation.

  1. Maintain a standard of living.

You are experiencing a shortfall in your retirement funds while trying to maintain the lifestyle you and your family are accustomed to.

 

If the above relates to you, don’t hesitate to contact us to find out what a reverse mortgage could do for your household.

You can contact our office at  604-552-6190 or you can CLICK HERE to book a call with Trish!

Never hesitate to contact us if you have any questions at all!

 

Trish & The Primex Team 

The New Tax-Free First Home Savings Account

General Trish Pigott 29 Mar

The Government has confirmed that as of April 1, 2023, financial institutions will have the ability to start offering the new Tax-Free First Home Savings Account (FHSA). This program allows prospective first-time home buyers the ability to save $40,000 on a tax-free basis and, like a Registered Retirement Savings Plan (RRSP), contributions will be tax deductible. When a client makes a withdrawal from the plan to purchase their first home, that withdrawal is non-taxable, just like a TFSA. This plan includes an $8,000 annual contribution limit and a $40,000 lifetime contribution limit.

For those purchasing with a partner/spouse who is also eligible under this program, both applicants will have access to the $8,000, thus doubling their lifetime contribution limit to $80,000.

Program Highlights

  • The FHSA and HBP (Home Buyers’ Plan – RRSP down payment program for First Time Buyers) can now be combined on the same qualifying purchase.
  • Applicants must be a resident of Canada and between the age of 18 and 71 years old.
  • Must be a first-time home buyer, defined as someone who has not owned a home in which they have lived at any time during the calendar year before the account is opened, or at any time in the preceding four years.
  • Owner of the plan would have the ability to hold a broad range of investments, just like an RRSP or TFSA.
  • Unlike an RRSP, contributions made in the first 60 days of a calendar year cannot be applied to the previous tax year.
  • Home buyers have up to 15 years from their first contribution or until their 71st birthday, whichever comes first, to use the funds to purchase a home.
  • Home buyers can carry forward unused portions of their annual contribution (up to max. $8,000) to subsequent years, as long as they do not exceed the lifetime limit of $40,000.
  • Funds that are not withdrawn from the plan to purchase a home can be transferred to an RRSP or RRIF on a tax-free basis.
  • Non-qualified withdrawals from the plan are permitted but will be subject to a withholding tax, just as they apply to taxable RRSP withdrawals.

For complete information, please click the link to view the Government Tax-Free First Home Savings Account web page.
If you have any questions on what this means for you, never hesitate to contact our office. Or you can click here to book a Mortgage Consultation call with Trish 🙂
Trish & The Primex Team

 

4 Key Things to Know about a Second Mortgage

General Trish Pigott 22 Mar

A second mortgage is a mortgage that is taken out against a property that already has a home loan (mortgage) on it. Generally people take out second mortgages to satisfy short-term cash or liquidity requirements, have an investment opportunity or to pay off higher-interest debts (such as credit cards and student loans) that a second mortgage might offer.

If you are considering a second mortgage for any reason, here are a few key points to keep in mind:

Second Mortgages and Home Equity: Your second mortgage and what you can qualify for hinges on the equity that you have built up in your home. Second mortgages allow you to access between 65 and 80 percent of your home equity, depending on your qualifications.

For example, if you seeking 80% Loan-to-Value loan (“LTV”):

House Value =                                                  $850,000

80% LTV (maximum mortgage amount)           $680,000

less: First Mortgage                                           ($550,000)

Amount Available Through Second Mortgage     $130,000

Second Mortgages and Interest Rates: When it comes to a second mortgage, these are typically higher risk loans for lenders. As a result, most second mortgages will have a higher interest rate than a traditional first mortgage. There is also the option of working with alternative and private lenders depending on your situation and financial standing.

Second Mortgage Payments: One advantage when it comes to a second mortgage is that they have attractive payment factors. For instance, you can opt for interest-only payments, or you can select to pay the interest plus the principal loan amount. Work with your mortgage broker to discuss options and what would work best for your situation.

Second Mortgage Additional Fees: A second mortgage often comes with additional fees that you should be aware of before going into the transaction. These fees can vary widely but often range from 1-2% of the mortgage amount.  These fees are in place as they are higher risk loans that do not make you qualify with the stress test guidelines with traditional mortgages. Other fees to consider include appraisal fees, legal fees to set up the second mortgage and any lender or broker administration fees (particularly with alternative or private lenders).

Second mortgages are a great option for many homeowners and, in some cases, may be a better solution than a refinance or a Home Equity Loan (HELOC). This allows you to keep more favorable terms in place with your current mortgage and avoid penalties to access your equity.

If you are interested in finding out if a second mortgage is right for you, contact us at Primex Mortgages today! We are more than happy to crunch numbers to figure out what would work best for you.

Trish & The Primex Team

 

Do you need title insurance for a new-build home?

General Trish Pigott 15 Mar

The housing supply shortage is one of the top issues in Canada’s real estate market. But, cities are seeing a massive boom in new-build housing.

New construction offers many advantages, like more energy-efficient heating and cooling systems. Their titles can also feel less risky to transfer. After all, if the land was previously vacant, there’s no chance of unpermitted work from a previous owner causing losses for new buyers.

But did you know that new builds carry most of the same title and off-title risks as existing homes? Here’s why.

The home may be new, but the land isn’t

Even unimproved land belongs to someone. The land for the new construction may have changed hands several times before the developer bought it. Every transfer of the land can add defects to the title. Those defects can cause losses for the people who buy homes built on that land. On top of that, both the municipality and the developer might make a mistake or miscommunicate, which can end up causing a problem with the property.

Here are just some of the issues that can cause losses for owners, even on new constructions:

  • Zoning mistakes, which can happen on either the municipality or the developer side.
  • Setback agreements the developer didn’t know about, which results in homes built too close to the road.
  • Pre-existing liens, for example from property tax still owed by the previous owner.
  • Errors in the registration of the title.
  • Pending legal action against the property that the developer didn’t know about.
  • Builders’ liens, if the developer wasn’t able to fully pay a supplier or contractor.

Subdivisions can add extra complications

When an owner buys a property in a subdivision, they’re getting the title to that specific property. But all the land in that subdivision would have been under one original title before it was parceled out. The problem is, if someone has a claim against that original title, every property in the subdivision could be subject to it.

If the land for the subdivision was assembled from existing properties, that can add complications to the title of the assembled land. Those issues can then impact the new properties parceled out of that assembled land.

The developer could also make mistakes setting the property lines in a subdivision. If that happens, or if there are issues with the Real Property Reports/surveys conducted for any of the properties, the owners of those properties could have to deal with the consequences down the road.

How can title insurance help new housing starts?

Title insurance is a great solution for new construction because it can cover homebuyers for the risks associated with all properties, risks introduced by subdividing land, and even title fraud. A title insurance policy protects the insured for as long as they have an interest in the property. It also works as a better closing solution than Western Conveyancing Protocol alone, or gap-only insurance.

Builders help with some of the risks of new construction by issuing a Real Property Report to the owner. It’s a useful document, but it has a limited scope and doesn’t offer owners any recourse if an issue comes up. It also becomes obsolete if an owner puts up a new exterior structure, like a fence or a deck. A title insurance policy covers the outside elements of a property as well as the home itself, which means it still provides protection to future buyers if the current owner adds structures.

Post construction endorsement

FCT, The First Canadian Title Company, offers more protection on new construction with our Post Construction Endorsement. It advances the policy date by one year for 14 covered risks, including encroachments, work orders and zoning bylaw violations.

That means the policy covers any later improvements to the property the developer had contracted for before the closing date. Owners can take possession of their new-build home knowing that FCT is here to help handle surprises down the road.

If you have any questions on how this may affect your home, don’t hesitate to contact us! Our job is to ensure your mortgage process goes smoothly.

Trish & The Primex Team

 

Bank of Canada Announcement and What This Means For You.

Latest News Trish Pigott 8 Mar

Earlier this year we expected a .25% increase at the January announcement and saw exactly that. This next rate announcement is expected to not increase or decrease. After 8 consecutive rate hikes over the past year, the Bank of Canada is expected to leave rates unchanged. The Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases.

 

This morning, March 8th, it was announced exactly what was widely expected by economists. They have decided to hold the rate at 4.5% for the first time in a year, while reiterating its wait-and-see approach. The Bank of Canada says it still expects the annual inflation rate to fall to around 2-3% by mid-year.

 

Which leads economists to question what is going to happen after the March announcement.

 

“The U.S. Federal Reserve is probably going to be tightening at least two more times, if not more. For the Bank of Canada, if inflation remains sticky and if the economy does not break down, are they going to be able to sit there with the policy rates they have and pause as they suggested?” said Robert Kavcic, director and senior economist at BMO Capital Markets.

 

Since March of last year, the bank has raised its rate from near- 0% to 4.5%, the highest it’s been since 2007. Making it the fastest rate tightening cycle in its history, in hopes of tamping down on inflation. Although they announced this pause in rate hikes, they stressed it was conditional, making it clear that they will be ready to raise interest rates further if inflation doesn’t come down quickly enough.

 

“They wouldn’t want to announce a pause and then immediately not go through with (it),” said Karyne Charbonneau, CIBC’s executive director of economics.

 

Most recent inflation data suggests that the country is inching closer to normal price growth. Canada’s annual inflation rate slowed to 5.9% in January, down from its peak of 8.1% it reached last summer. With interest rates now at a 16-year high, most economists anticipate a mild recession sometime this year.

 

The market is a little volatile so our advice is that anyone shopping for a home currently, should get a pre-approval to hold today’s rate for up to 120 days. This will allow you to secure today’s rate, and if rates were to drop any further, you will still be eligible for lower interest rates. Don’t hesitate to reach out to us at Primex if you have any questions or concerns regarding your mortgage.

 

Trish & The Primex Team

 

What to Know Before You Sell Your Home

General Trish Pigott 1 Mar

So, you are thinking about selling your home? Whether you are down-sizing or upgrading, selling your home can feel like a big project – that’s where we come in. To help make this process as smooth as possible, we have put together a list of a few things to consider before you sell:

Improve Your Curb Appeal: When it comes to selling your home, first impressions matter. If a potential buyer first sees overgrown weeds, clogged gutters or cracked concrete, they may have a negative first impression of the home, making it harder to impress them once they are inside. Investing into your landscaping, any outdoor maintenance or repairs will go a long way in making your home more appealing. A pressure wash and new coat of exterior paint can also do wonders to give your home a facelift!

Get Rid of Clutter: In addition to updating your home’s curb appeal prior to sale, you also want to ensure that you are decluttering, and depersonalizing your space. Removing personalized photos, collectables, memorabilia and other knick knacks will help open things up and allow potential buyers to envision their own belongings in those spaces. Major renovations are not necessary, but fixing any minor repairs and a fresh coat of paint will also help to ensure the best first impression!

Set a Reasonable Asking Price: One of the most important aspects for the successful sale of your home is to price accordingly. Even though it can be difficult, when selling your home it is vital to avoid emotional decisions or anchoring your listing price to your home’s previous value.

Choose the Right Real Estate Professional: A real estate agent can help you maximize the sale of your home by working to get you the best asking price and help you walk through the sales process. Once you have a realtor in mind, it is best to conduct an interview to ensure they are the right fit for the job and that their interests align with yours. We have some great ones we work with and would be happy to connect you.

Understand the Costs: Before you get to the point of reviewing a purchase offer, you should have a reasonable understanding of potential gains (or losses) within your acceptable price range. To do this, you need to understand the costs of selling your home, which include: real estate sales commissions, closing fees, title charges, transfer and recording charges, additional settlement charges if applicable, and debt obligations related to existing mortgages.  We have some great tools in our office and are happy to provide you with these numbers.

If you’re looking to sell your home and need mortgage advice, or want to get pre-approved for your next home, be sure to reach out to us first. We will get you started with all the numbers you need to make the best choice.

Trish & The Primex team 

Change of Address Checklist.

Home Tips Trish Pigott 22 Feb

So, you’re moving! Before you hunker down in your new home, there are a few things you will want to take care of regarding your new address.

Personal Contacts

First and foremost, if you haven’t yet, make sure to tell all your personal contacts about your address change, including:

  • Relatives
  • Friends
  • Employer
  • Schools, colleges, universities, daycares
  • Landlord (if necessary)
  • Clubs, associations and charities

Healthcare Professionals

For the purposes of keeping your health care records up to date, make sure to update your professional contacts:

  • Doctor(s)
  • Dentist
  • Veterinarian
  • Other healthcare specialist(s)

Creditors and Services

If you haven’t yet reached out to your services, you will want to do so as soon as possible for a smooth change of service from your existing address to your new address. These services include:

  • Phone, cable, internet, mobility company
  • Electricity / hydro
  • Natural gas
  • Heating fuel company (ask if you receive a deposit refund)
  • Financial institution
  • Credit card companies
  • Insurance companies / broker(s)
  • Lawyer / notary
  • Subscriptions (e.g., newspapers, books, music, loyalty programs)

Government Services

Lastly, it is vital to inform the federal and your provincial/territorial government if your address changes to ensure all your data and ID cards are updated:

  • Driver’s license
  • Health Card
  • Vehicle registration
  • Canada Post
  • Canada Revenue Agency
  • Canada Pension Plan / Quebec Pension Plan
  • Old Age Security
  • Employment Insurance

Friendly reminder that The Primex Team is always here for you! Our goal is to make the mortgage process as stress free as possible during the crazy times of moving. If you have any more questions, don’t hesitate to reach out!

 

Trish & The Primex Team

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