Mike's Spruce Grove Mortgage Blog


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HomEquity Bank Reverse mortgage ad, with Kurt Browning

Tuesday, October 18, 2016

posted by MIke Toporowsky at 3:58 pm - 0 comments

HomEquity Bank myths debunked. Call Mike at 780-940-0604

Tuesday, October 18, 2016

posted by MIke Toporowsky at 3:57 pm - 0 comments

October 17th mortgage rule changes in Canada (one example)

Friday, October 7, 2016

October 17th Mortgage Rule Changes in Canada (one example)

Most of you have heard about the changes coming to the Canadian mortgage underwriting guidelines.

Here  is one way the change will affect you if you were in the market to purchase a condo townhome for $339,000

First, we have to assume that you have zero additional debt.

5% down with a 2.39% 5 year fixed rate, down payment is 5% ($16,950), CMHC premium $11,593.80, total financing is $333,643.80

Before October 17th 2016, you need to qualify your mortgage with 2.39% for 5 years. That means you can qualify with a payment of $1476.40/m principal and interest plus $300 condo fees plus $200 heating and electrical plus $208.33 for property taxes. Total payment is $2184.73/m   You need to earn $81,927.36 to qualify.

After October 17th 2016, you need to qualify with the current bank posted 5 year rate of 4.64%. That means you need to qualify with a payment of $1872.68.  The rest of the numbers are the same but that brings your total monthy qualifying payment to $2581.02. You need to earn $96,788.16 to qualify for the same mortgage on that same home. 

You will only be paying 2.39%, but the Federal Finance department wants to ensure that your mortgage is stress tested, in case the rates go up and you need to prepare for a higher payment.

If you have additional debt, like credit lines, credit cards, car payments, student loans, be prepared to either pay them off first or earn a higher income or qualify with an additional income or buy a home in your income range or live with your folks or continue renting.

As interest rates go up, so will the qualifying rate. It seems like it got tougher to buy a home, but if you have been around for a few decades, you will remember inflationary interest rates of 21% for a mortgage.  It will take some more planning.  If you want to become a home owner, you probably will find a way to qualify. 

You need a mortgage professional now more than ever to find your way through the process.

Mike Toporowsky AMP

Real Mortgage Solutions


posted by MIke Toporowsky at 3:38 pm - 0 comments

7 Efficiency Tips for Real Estate Closings, From a Spruce Grove Lawyer.

Wednesday, July 27, 2016

7 Tips for Efficient Real Estate Closings from a Law office in Spruce Grove

Below, you will find a very timely list of things you can do to ensure timely and efficient closings this busy real estate season.  It also gives an idea on how to save costs at closing. I would like to thank lawyer Frank DeAngelis for this contribution.

LUCK. We all wish we had more of it.  Closing transactions for your clients ON TIME ™ doesn't need to rely on luck.  Here are Main Street Law LLP's stop seven tips for keeping your clients extremely happy by assisting us in closing their real estate transactions ON TIME ™:

1.      Do not schedule the closing date on the 1st, 15th, or end of the month. If you do schedule a closing date for these days, you're having your clients compete for the time of their lawyers, bankers, movers, utility providers, etc. with everybody else who tries to move on these days. Unless it needs to be one of these days for a specific reason, any other date is a better choice.
2.      When scheduling that alternate date, choose a Tuesday, Wednesday or Thursday closing when there is less demand for the resources of the service providers.
3.      Make sure the Real Property Report and Compliance Certificate are in order regardless of whether you are acting for the buyer or the vendor.  If acting for the vendor, start addressing this issue when taking the listing. Do not wait to address the Real Property Report and compliance issues until a late date as failing to address this issue early is probably the number one reason for late closings.
4.      If the Real Property Report and compliance certificate are not ready at the time the contract is entered into, consider title insurance as an alternative.  Be clear in the contract that title insurance is to be provided instead of a real property report and compliance if this is how the transaction is to proceed.
5.      Do not schedule closings for June 27th or 28th, schedule your closing to close the 24th, 25th, or 26th of June or July 3rd or 7th instead.
6.      Allow three weeks' time between condition waiver and the closing date. Note that a $400.00 RUSH closing fee is charged on any transactions that are scheduled to close with less than 10 working days' notice.
7.      Ensure that your office's assistants are instructed to send Conveyancing instructions immediately upon the transaction going unconditional.  Additional closing information, if needed, can be acquired at a later date.
The partners, our associates and all the Main Street Law LLP staff look forward to working collaboratively with you to ensure stress-free, "ON TIME" closings for you and your clients.  More information on our People and what we do can be found on our Web Site at mainstreetlaw.ca.
Best Regards;
Frank C DeAngelis
Barrister and Solicitor
Main Street Law Offices
Box 3407, 115 Main Street
Spruce Grove, Alberta T7X 3A7


posted by MIke Toporowsky at 9:45 am - 0 comments

Educate yourself before you buy a condo

Wednesday, July 27, 2016

Educate yourself before you buy a Condo


There are a few extra things you need to do before purchasing a condominium.  Home ownership comes in different packages and your lifestyle will help you decide what type is best for you.

A condo can look like a single family home, a manufactured home, a town-home, a cottage home, a walk-up apartment or a high-rise.  A condo plan usually means that the land around he buildings are common area and are maintained by the owners cooperatively either directly through a condo board or a property manager.  Decisions regarding snow removal, roof repairs and general maintenance on the exteriors are made by the elected boards.  If you own one unit you have a vote and you can also put your name forward to serve on the board.

Your lifestyle might include lots of travel and a condo lets you leave without having to worry about snow removal, garbage removal and lawn maintenance.  Or you might simply want a smaller place with less maintenance.

All condos in Alberta are required to do a reserve fund study every 5 years. This is a report completed by condominium experts (building engineers, contractors etc) to determine the state of repair of the condos roof, heating systems, drainage, siding etc.
They determine if the required reserve fund is adequate to cover any major or minor upcoming maintenance.

When you are looking to purchase a condo, you should always be allowed to review the reserve fund study report plus a number of other items that will give you a history of what the owners are reporting.

When looking you should ask to review...
  • a copy of the registered condominium plan
  • a copy of the current bylaws of the corporation
  • a copy of the most recent financial statements, if any, of the corporation
  • a copy of the budget of the corporation
  • A statement setting out the monthly contributions (condo fees) and the basis on which that amount was determined
  • A copy of any minutes of the proceedings of a general meeting of the corporation or of the board for the past 12 months
  • a copy of any special resolutions, if any
  • a copy of the insurance certificate
  • a copy of any lease agreement or exclusive use agreement with respect to the possession of a portion of the common property, including a parking stall or storage unit
  • the particulars of, or a copy of, any subsisting management agreement
  • the particulars of, or a copy of, any subsisting recreational agreement
  • a statement setting out structural deficiencies the the corporation has knowledge of at the time of the request in any of the buildings that are included in the condo plan
  • a statement setting out the amount of the capital replacement reserve fund
  • a copy of the most recent reserve fund report
  • a copy of the most recent reserve fund plan
  • the particulars of any post tensioned cables located anywhere on or anywhere within the property
  • a statement setting out the amount of contributions due and payable in respect to a unit
  • the particulars of any action commenced against the corporation and served on the corporation
  • the particulars of an unsatisfied judgment or order for which the corporation is liable
  • the particulars of any written demand made on the corporation for an amount in excess of $5000 that, if not met, may result in an action being brought against the corporation

While not all these documents will be applicable these are all items to consider before purchasing your new home.

Take the time to read these through or have your real estate associate review them for you.  This is the due diligence process that may save you some future shock of a special assessment amount levied against you for major repairs. This is a major reason for utilizing the service of a Realtor.  They do not charge you a commission as your buying associate, so you have nothing to loose.  Your second line of defense is your mortgage broker, who will also ask for these items to provide to the lender. If there is anything of concern that is read from the checklist, they will alert you before you remove that financing condition from your offer to purchase. 

Recently I ran across a reasonably priced document review service.  It was started by a person who was faced with  two consecutive "special Assessments".  The service will review the entire condominium document package (usually a large bunch of papers that require nerves of steel to stay focused while you are reading).  Sometimes the lending underwriter will insist on reviewing the documents or expect that the lawyer closing the file will review them.  If the lawyer is expected to review them, they will most likely have a significant increase in their fees or they will send it out to a similar contract service provider.  If you are lucky enough to have a lawyer in the family, they can also be called upon to help you understand the condo docs. 

When you are given the condo documents, as required by the real estate act and if you make the condo purchase without properly review this document, if you receive a special assessment, you alone are responsible. 

Once you are into your condo, there is no turning back. So make sure your condominium home ownership experience is enjoyable.

Share your Condo experiences with us

posted by MIke Toporowsky at 9:42 am - 0 comments

Things to consider before you apply for a mortgage, in Alberta

Wednesday, July 27, 2016

Things to consider before you apply for a mortgage.

Down Payment

1) do I have at least 5% of the purchase price of my new home? Can I make it 10% and save significant CMHC premiums?

2) Do I have a 90 day history of the funds in one account? If I moved funds around, can I show a clear path to the lender? To do this you need bank statements or RRSP statements that show the name of the bank, the account number, your name and the dates of the transactions.  Often we pull a 90 day bank statement from the internet.  That is fine, as long as you can prove that account belongs to you, with a statement tying it all together.

3) If the down payment is a gift, I will need a gift letter, stating the gift is a true gift and not a loan. I will also need to show the funds in the gift giver's bank account (90 days not required) and a statement showing the funds transferred into your own account.

4) If I am selling an asset, I will need to show the bill of sale and the funds being deposited into my account.

5) If part of my down payment is from recently received funds,like a tax refund or an insurance settlement or an annual bonus at work, I need to show both the source of the fund and the deposit into my account.

Credit and Character

1) contact Equifax.ca and request your free credit bureau.  Do not buy the score that it will ask you to buy.  The report needs to be reviewed annually to ensure that it is accurate. There are sometimes errors, so don't be caught unaware.  Deal with errors prior to your mortgage application, not during a purchase.

2) sometimes underwriters will search the internet for items of public domain, if they are looking for character references. Keep that in mind.  It is the same thing that occurs when you are applying for a job, so much is already public.

3) Deal with collections and other negative credit issues and have documented proof and some historic facts for the credit issue.

4) 3% of an unsecured credit line balance will be used against your debt service calculations, so even if you are paying interest only, you may not qualify for a mortgage if your $20,000 mastercard balance is showing as a $600/month payment against your income.

5) do not buy large ticket items during the time you are applying for a mortgage. If you are forced to buy a vehicle, make sure you clear it with your broker and they will work with the lender to make sure you still qualify. This is especially important after you remove conditions of finance.

6) read all condominium documentation or have a professional condo expert read them and advise if the condo is going to have major expenses that are not covered in the reserve fund.

Income and Stability (3 year history)

1) If you are employed, please have a copy of the last 2 t4s, the last 2 NOAs a recent pay stub and a letter of employement that states your name, your employment date, your position and your annual base income.

2) If you are self employed, but not incorporated, please have your last 2 T1 generals, your last 2 NOAs, your bank statements for the past 3-12 months, invoices or any other record showing regular income ready to present.  Not all banks ask for all of these, but it is good to have them ready.

hint. If you don't have your Notice of Assessments from CRA, please log in and register for the online records.  This takes a couple weeks for them to send you your password through Canada post, then you can print off your CRA records any time you want. 

3) If you are self employed and have a corporation, you will need your last 2 NOAs, you last T1 generals, your corporate financial statements, your Corporation documents, showing how long you have been incorporated and who your director and shareholders are. If you have 100% of your company, is is less complicated than if you are a partner or a lesser shareholder, so make sure you provide proof.

4) Think about your longer strategy.  If you plan to buy a home and have children, you may not want to qualify for a huge mortgage based on 2 incomes. At least know your plan and avoid disappointment. 


posted by MIke Toporowsky at 9:41 am - 0 comments

Mortgage applications are getting very detailed

Monday, July 25, 2016

Mortgage applications are getting very detailed.

After 35 years in the industry, I thought I saw all that could be seen. After all, business is normally in cycles.

This past few years CMHC, OSFI and the Canadian Federal Government have continuously tapped the brakes on a previously robust mortgage industry. I actually agreed with some of the tightening, because I want to see this industry remain strong.

Lately, however,  I have run across some of the more bizzarre examples of details.  Things like pulling titles on every address shown on your history on the credit bureau, just to prove you are not responsible for the mortgage on a prior address or that the number of homes you have declared owning are accurate. That is an extremem example, but it has recently happened to one of my clients.

I agree with gathering details that are more specific than stating somebody has $300,000 in RRSPs. Remember that everything you declare may be scrutinized and approved.  Somethimes the underwriter accepts your numbers, but if you tell your broker you have $300,000 in RRSPs you better be able to back that stament if called on.  Banks are asking for specific investment amounts and places that the funds are invested.

Lessons learned from the US subprime mortgage meltdown have the entire worldwide credit industry cleaning up their act. We are all responsible to help it improve.  Canada has always been strong, but we are not immune to downturns.

Just be prepared to dot your i's cross your t's and be patient.


posted by MIke Toporowsky at 5:17 pm - 0 comments

Credit Bureau scores have changed effective June 4th 2016

Monday, June 13, 2016

Your credit bureau score just changed on June 4th 2016.

It was an upgrade called ‘Beacon 9’ and it is meant to better reflect your payment and credit habits.

Here is some good news; If you have great payment habits, never come near your credit limits and don’t constantly create inquiries on your credit bureau, your score probably took a healthy increase.

If, on the other hand, you are late with payments, missed payments within the past 2 years, are constantly seeking credit, were over your limit on credit lines or consistently close to your limit, your score will probably reflect a lower number.

If you wish to apply for credit (for a mortgage or a credit card or vehicle purchase) and you are aware of some of the above problems, you need to take some steps to prepare.

1)    Pay down your credit card to less than 50% of the limit and treat it like your limit is half of the actual limit.
2)    If you can’t pay down the limit, ask the lender to increase your limit to create a space between your balance and your limit. Again, do not go any higher than your current balance.
3)    Do not seek credit or give permission to pull bureau reports to anybody, unless totally within the framework of your credit/purchase strategy.  Limit your permission to 3 times a year, maximum.  Equifax says they will not penalize for similar credit pulls within 45 days, but they may not be aware of the vehicle purchase connection with a bank vs a car finance place.
4)    Allow 2 calendar months for any adjustments of balance or limit to have an affect on your credit report. 
5)    Make sure all payments are up to date and even set up payments on an automatic debit plan.  This goes for phone plans too.
6)    This is important.  If you have a dispute over a balance, with a creditor, do not simply ignore your payment.  If you miss your payment (agreed or not) they win.
You need to communicate with somebody in authority to resolve the issue, no matter if it means waiting your turn in line or on the phone. Get your resolutions emailed to you or mailed to your.  Make sure it is in writing and make sure you get names.


posted by MIke Toporowsky at 4:22 pm - 0 comments

Getting equity out of a property where you have a common interest

Tuesday, May 31, 2016

Getting equity out of a property where you share a common interest

Banks normally won't touch a deal like this.  Private investors see the common sense where there is sufficient equity to allow one of the title holders to borrow equity from their portion of the property value. 

I was approached in a divorce case by the lawyer of a man who needed to access a portion of his half of the matrimonial property. The properties were being tied up while the divorce abttle raged on. There was proven sufficient equity on both sides and it was not a question as to the soon to be ex-husband owning at least half of it. 

The discussions between the man's divorce lawyer and the private investor's lawyer were required to set up a framework for the type of loan and land titles registration to make this happen.  This first deal was delayed at first, because Alberta Land Titles was not satisfied with the legal verbage used on the registration request.  It was quickly resolved after a discussion and the loan went forward.

I had never seen a deal like this cross my desk in 35 years in the industry, but right after that first deal was closed I received a call from a man looking to get equity out of a property, that he owned jointly with a foreign investor. 

The circumstances and the needs were different, but again we proved his co-title to the property and determined his share of the ownership.  Recently we closed the second deal using the same private investor (because the investor became confident with this type of investment).

We used the same lawyer of the second deal too, because the legal verbage was precise and land titles registered without further incident.

If this sounds like something you need, please let me know and we will see if you qualify.

Mike Toporowsky   



posted by MIke Toporowsky at 10:47 am - 0 comments

Mortgage after Bankruptcy 101

Thursday, May 26, 2016

Mortgage after Bankruptcy discharge...here's how.

After 30 plus years of lending mortgages, I can honestly say that there is no day that goes by that I have not learned something new about mortgages.

Today's lesson comes after helping a customer obtain a mortgage, after she was discharged from her bankruptcy.

Karen (not her real name) called me from a small town in Alberta. She was discharged from bankruptcy since early 2011 and had been working on re-establishing her credit.  Karen had a full time career and was now making a decent income.  Every effort to erase her bankrupt past had been taken, except the bankruptcy will remain on her credit bureau for 7 years.

Without taking an initial application, I promised her that I would call around to different lenders, asking for ways of helping Karen with her dream of being a home-owner.  I called 5 different underwriters and found that most were not interested, because it was a combination of issues, including the fact that the town did not have a large population base.  I finally located one bank rep who was not convinced that it would fly, but they wanted to get my business. He asked me to at least take an application and send it in.  So the application and credit bureau were done and a live offer to purchase were sent in to the lender.

The result was a conditional approval at a rate that was not deep discount, but it was still lower than bank posted for a 5 year term.

Now the work began.  I needed a letter from Karen with a reason (in her words) that she went bankrupt in the first place. She advised the underwriter that she was in a past relationship and had the stronger credit, so she was asked to sign loans and credit accounts for her past common-law.  The relationship ended and her ex common-law immediately went bankrupt.  Karen tried her best to honour the loans, but her income at the time was not sufficient. She was insolvent.  She declared bankruptcy and was absolutely discharged a year later. 

Next, Karen provided me with her income documentation, with a recent pay stub, proving she had been established for 2 years in her career.  She now needed to provide me with proof that she could come up with a 5% down payment. She had an RRSP through her employer that had about $4000 in cashable funds (they need to be in place for at least 90 days).  She was short about $10,000 overall, so she asked her mom for a gift. Her mom signed the gift letter and she showed the funds being transferred to her account. The gift included enough to cover the $3000 (1.5% of the purchase price) for closing costs.

Her credit bureau needed to show re-established credit with 2 creditors over 2 years.  The credit limits needed to be higher than $1500 each.

The underwriter had included in her notes that she wanted to have a copy of the bankuptcy discharge and the statement of affairs.  This is where the problem started, because the documents were in storage in another town, in a moldy old banker's box.  She could not access the records.  Karen was getting nervous and frustrated with the process and actually told me that I could have done a better job, by advising her that these documents were going to be needed, earlier in the process. (That was lesson number one).

The bankruptcy trustee would not be of assistance, because the file was archived and would take 60 days to produce the copies she needed.  I asked her to contact the courthouse in Edmonton and ask the bankruptcy administration clerks to provide her a copy. They would have charged $60 and would take at least 2 weeks to find the records.  I called a friend of mine who is a bankruptcy trustee. She helped me to locate a file number located with the superintendent of bankruptcies.  Karen was given the contact information and called the superintendent's office.  Her obsolute discharge summary and statement of affairs were forwarded by email immediately (at no charge).

The bank told me they were looking to make sure that they were not a part of her past bankruptcy, that there was no home-ownership involved in the last bankruptcy and that this was the one and only time that Karen had been bankrupt.

Everything fit.  Karen was now able to remove the 'subject to financing' on her offer to purchase. 

Lesson number two came today when I was happily believing that I made Karen my biggest fan. She was upset and called me up because she had received a call from her lawyer asking for the entire down payment in trust in two days.  She had the gift cash, but was wondering why I didn't tell her to begin the process of RRSP withdrawl.  She had no idea how to go about it and the lawyer was not too patient when demanding it.  I was able to track down her RRSP fund manager and set them on the trail of an RRSP withdrawl (special CRA withdrawl forms are required).

Every situation is going to be different and I felt pretty good about helping Karen, when all indicators were strongly against success.  I am sure that Karen will find her new home just wonderful.


posted by MIke Toporowsky at 7:17 am - 0 comments

About Mike Toporowsky AMP

Mortgage industry experience ... since early 1981

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  • 780-940-0604
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