Lowering Payments and Freeing Up Cash During the Pandemic

Welcome to an uncertain time in global history! No one imagined that 2020 would be the Year of the COVD-19 pandemic and we’re all trying to cope. We at the Wilson Team of mortgage professionals hope you are staying healthy and taking proper precautions to remain safe.

We also want to talk to you about ways to reduce your monthly expenses and free up some cash for the days ahead. It’s especially important now, given all the business that are shuttered and the people who are losing their jobs as the economy slows.

Mortgage professionals have been deemed an essential service and we are here to lend a helping hand in any way we can. We are available by phone and you can read our blog and join our Facebook community to keep abreast of the economic changes and obtain practical information about financial issues.

If you’re in a challenging situation, we want to help. If you aren’t, this is probably a good time to re-evaluate all of your finances to determine where the gaps lie. So, stay in touch!

Relaxed Mortgage Qualification Rates Cancelled by Federal Government

As Canadians experience economic uncertainty during the COVID-19 pandemic, many prospective home buyers looked forward to one piece of relief that has since been cancelled.
Bill Morneau, the federal finance minister, announced in February that Ottawa was relaxing mortgage qualification rates for insured mortgages, those where the homeowner had made a down-payment of less than 20 per cent. The new policy was slated to come into effect April 6, a bright spot in a bleak landscape that was eagerly awaited by many clients of the Wilson Team of mortgage professionals.

However, then came the pandemic. The federal finance department had planned to set up a new benchmark interest rate for use in determining whether potential homeowners qualified for an insured mortgage. The benchmark rate would have been based on actual borrowing costs, rather than on the rates being advertised, making it more responsive to changes in lending interest rates. It would have been calculated at the weekly median five-year fixed rate from mortgage insurance applications, plus two per cent. The current stress test refers to the Bank of Canada’s average posted interest rate, or the mortgage applicant’s contracted
rate plus two per cent, whichever is the higher. Buyers seeking both insured and uninsured mortgages are subject to the current stress test.

In a statement, Morneau said, “For many middle-class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market.” Unfortunately, after the Bank of Canada cut its interest rate by 50 basis points on March 13, the second
cut made by the bank in nine days, the Office of the Superintendent of Financial Insurance (OSFI) announced that the planned change will be suspended indefinitely. In addition, OFSI has suspended all consultations about the possibility of changes to a stress test for uninsured mortgages.

No indication has been given about when the change to the stress test will come into force. “Suspending the change to the stress test is a disappointment for many prospective homeowners,” says Kelly Wilson, co-founder of the Wilson Team of mortgage professionals. “During this precarious time, any type of financial relief is welcome news for buyers, and they will be even more frustrated if lenders’ rates don’t reflect the rate cuts made by the Bank of Canada.”

Despite the suspension of changes to the stress test, the Wilson Team is committed to helping prospective homeowners find the best possible mortgage rates during the pandemic.
“The real estate market continues to be active despite the pandemic,” says Wilson “and the Wilson Team is working diligently to ensure that our clients obtain the best mortgage rates possible given the regulations that are in place.”

How Much is Money Costing Me? Are Mortgage Deferrals Right For Me ? What Other options do I have ?

We hope everybody is doing okay and hanging in there! We wanted to highlight some quick pro tips that you can look into for your own situation to see if there are any changes that you can make to better help your situation until we all get through this on the other side.

We are trying to connect with every one of our clients every day to check in and see how you’re all doing, if there's anything that we can do to assist you and get your finances in better alignment. There has probably never been a better time to reevaluate your finances and figure out where you have some gaps and holes. We want to be able to close the gap and put you in the best financial position that you've ever been, so that when something like this happens, again, whether it be with a pandemic or even just a job loss or illness, that you guys are so well prepared to take this on financially, that you can weather any storm that comes at you.

In the video, we use a standard $400,000 mortgage, which is the average mortgage in Canada. We also use an interest rate of 3% and a 25-year amortization. We touch on the following topics:

Deferred mortgage payments

Re-Extend Your Amortization

Property tax deferral:

Accelerated Bi-Weekly to Monthly

Variable Rate Mortgage


If you are taking advantage of the deferred mortgage payment options, we have to recapture the money back within the end of the term – Example – you are one year into your mortgage term, you have signed a 5-year mortgage and you want to defer your payments for 6 months. That means that at the end of the 6 months, you will have 3.5 years left on your term. The banks/lender is then going to take the 6 months of non-payments and are going to collect it back over the next 3.5 years. With the mortgage example that we are using, your mortgage payment would go up approximately $300/mth for the next 3.5 years. Another option of repayment is by putting it at the end of the loan and can stretch it out over the amortization and your monthly payments could go up as little as $20/mth.

The second option is extending the amortization. This does require you to connect with your bank to see if they are offering this option. In this particular case; $400,000 mortgage, 3% interest rate, 25 year amortization, the monthly payment would be $2160. Now, if they want to re-extend their amortization back up to the 30-year temporarily, this would bring their monthly mortgage payment down to $1680 – that puts nearly $500 back into your pocket each month. If you have just bought a house and you have paid CMHC, you have not built up the equity in the property just yet, so you may not be able to take advantage of this option.

Another option that you have if deferring your property tax payments.  You will need to connect with your city or township and see if they are allowing this at this time – it will be different for each township/city. If you are paying your property taxes twice in a year, you may be able to defer one of the payments or change your payment to one lump sum at the end of the year. If you pay your property taxes with your mortgage, you pay be able to set something up with your bank to hold off on that payment for now. Talk with your city, talk with your lender/bank and they may be able to help you out with this option.

You can speak with your lender and see if you are able to add money to your mortgage that you can use immediately. For example, if you take out $50,000 on your mortgage, that would put $50,000 in your pocket that you can use to pay down or off debts to eliminate monthly payments, use it to help out a family member, etc. With this option, it would increase your monthly mortgage payments by approximately $230/mth once it is stretched out on your amortization period. We just increase the amount - we don't re-extend the amortization, just increase $50,000. You can always lower the monthly amount if you make the amortization a little longer, but again, everybody has got a unique situation.

You can change your mortgage payments from accelerated bi-weekly to monthly. I know Canadians love paying off their mortgages. If you had the same scenario here, and you're on an accelerated bi-weekly and you wanted to drop it down to monthly, then you're looking at a reduction of your mortgage payment at $160. That frees up $160 a month just by going accelerated to monthly.

If you have a variable rate mortgage, one of the most exciting things that happened was that the Bank of Canada dropped their interest rates 1.5% in a matter of one month. This is huge for people that are on variable. If you're on variable rate, your mortgage payment dropped $300 a month as of April 1. Be sure you are paying attention to what that new monthly payment would be if you have anything wrapped around a variable rate for any lending.

We are encouraging you to connect with us through this. Even if you're not a client of ours, feel free to give us a call because everybody has a unique situation and we are happy to help you navigate your finances through all of this. We are here to help. It's about learning how to make your money work for you, and putting your money to work, and learning the best opportunities that you have in order to create more cash flow in the future to be able to reach your goals.

Let’s Talk Mortgages: The Details About Deferral

In the midst of the COVID-19, the economy is stalling and a lot of you are affected. Your cash flow or paycheques may have slowed or stopped altogether and you’re wondering how to keep a roof over your head or food on the table.
One easy way to cut back on your expenses during this crisis is to defer your mortgage payments. Yes, you heard me – and you’re reading it here in black and white! It may be contrary to everything you’ve ever been told, but the Government of Canada has made it possible for borrowers to defer their monthly mortgage payments – with the help of their lenders – for up to six months during this crisis.

Skeptical? Perhaps hearing it from the Canadian Mortgage and Housing Corporation (CMHC) will convince you (Link to https://www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/the-resource/covid19-understanding-mortgage-payment-deferral) CMHC says, “Homeowners facing financial stress may be eligible for a mortgage payment deferral up to 6 months to help ease the financial burden.”

So, consider this a gift from your government and go for it! Even if you have the money right now, a deferral might be wise. You don’t know how the economy will behave in the coming weeks. Put the payment into your savings account in case you need it. Or, if you’re flush, you can use it to pay off high-interest credit cards instead.

As you proceed, here are 10 things you should know:

1. Your lender makes the call. A mortgage is a contract between you and the lender, so allowing for a deferral is their call.

2. Be proactive. You need to have approval for deferring a payment before one is missed.

3. Apply online. The major banks are being inundated by calls from worried homeowners, as well credit card holders. You may wait on hold for hours in order to get through to a live person. Making your application online is quick and generally painless.

4. Terms will vary. Each lender can decide how the deferral process works. Some may approve a six-month deferral right away; others may prefer a month-by-month process. Don’t fret – whether you have to be approved once or six times, it will still be worthwhile.

5. Interest will be applied. There’s no escape. You’ll still need to pay interest, although, now, it will be rolled into the principal later.

6. The pain will be minimal. The additional interest on each $100,000 in your mortgage balance will be about $175 over 3 ½ years – assuming your remaining mortgage term is 42 months. For a $400,000 mortgage balance, which is what an average Canadian has, that’s a total of $700 over the term of your mortgage, compared to the approximately $12,000 you’ll save by deferring your $2,000 mortgage payments for six months. There’s no comparison!

7. Your credit score should be safe. You may want to confirm this in writing, just to feel comfortable. However, RBC has reported that it is working closely with the credit agencies, who have said that “there will be no material impact on credit scores they calculate.”

8. Other payments are still required. Your lender is only responsible for your mortgage. You will still be required to pay your homeowner’s insurance and your property tax, unless holidays are declared on those payments, too. You’ll need to touch base with your insurer or your municipality to inquire about being late.

9. There are additional options. You can ask your lender to refinance your home at today’s lower rates; you can request restoration of your original amortization to lower your payment; you can ask for a reduced payment for a specific time period; or you can ask that a payment be held while your income is temporarily suspended.

10. Consider all your properties. You should consider deferring the mortgages on any property you own, including vacation homes or investment properties. Scotiabank, for example, will defer as many as four mortgages per client. Always keep in mind that deferred payments are not eliminated, erased or cancelled. You will still be required to repay the amount of skipped payments, both principal and interest. The CMHC notes, “The interest that hasn’t been paid during the deferral period continues to be added to the outstanding principal of your mortgage. This can affect the total amount you owe in accordance with the original payment schedule.” You will need to work closely with your lender throughout the deferral period to determine how repayment will work.

Remember: Staying in your home is your ultimate goal. Don’t let worries about a relatively small amount of extra interest prevent you from deferring your mortgage!

The Wilson Team is here to help you navigate your way through a mortgage deferral or a potential refinancing. Don’t hesitate to come to us with your questions and concerns.

Homeowner Assistance

COVID 19 And Your Mortgage.

Lenders and Insurers are stepping up to help Home Owners. The 3 default insurers which are CMHC, GENWORTH and Canada Guarantee have come to the table to offer deferral of mortgage payments up to 6 months for those who qualify for the assistance program if you have an insured mortgage. Please note that this is not about free money. This is about deferring mortgage payments or interest until the end of the term.

Please review the references that we have put together in a link below for homeownership assistance. This will also include contact information for each financial institution and customer service. Please note to contact the banks directly for your options.

Please be patient because there will be overwhelming congestion with the Banks and Financial Institutions. There is an announcement that will be made tomorrow with more information and we will continue to keep you updated and posted. We are still waiting to see what the plan is regarding non-insured, private and alternative loans.

If you do not qualify then we can always look at what it means to refinance your mortgage in order to get liquidity increase cash flow or lower the rate and extend the amortization.

This can be possible if you are still working and you have built equity in your home. Equity means that the value of your has gone up and your mortgage is less than 80% of the value of the home.

Contact us directly for more information.

Helping Homeowners In Need

Genworth Canada's Homeowner Assistance Program is designed to help homeowners who are experiencing temporary financial difficulties as the result of an unexpected life event, which may put their mortgage at risk. If your customer has a Genworth-insured mortgage, they might be eligible for our Homeowner Assistance Program at no cost. This program enables you to work in partnership with us to establish alternative arrangements to help your customers stay secure in their home when times get tough.

How we can help

Options available

We will consider a variety of solutions that may alleviate the temporary financial burden of the homeowner. Each situation is assessed individually to determine if a workout is possible, and what the ideal workout solution is. Some common options that can be considered are:

  • Capitalize arrears
  • Increase amortization period
  • Partial or shared payment plan
  • Deferred payments
  • Restructure mortgage

For more information visit www.wilsonteam.ca

Here is the list of lenders and customer service numbers. You may find that some lenders already have a skip a payment option in the prepayment privileges.

  • Alterna: 613-560-0100
  • Bank of Montreal 1-877-895-3278
  • B2B Bank: 1-800-263-8349
  • Bridgewater Bank: 1-866-243-4301
  • CHIP: 1-855-207-4110
  • CIBC 1-800-465-2422
  • CMLS: 1-888-995-2657
  • Community Trust: 416-763-2291 x 513
  • Desjardins: 1-855-688-2433
  • DUCA: 1-866-900-3822
  • Equitable Bank: 1-866-407-0004
  • First National: 1-866-557-5509
  • First Swiss: 416-227-2000 x 1016
  • Fisgard: 1-866-382-9255
  • Haventree Bank: 1-855-272-0050
  • HomEquity Bank: 1-866-522-2447
  • Home Trust: 1-877-903-2133 x 5901
  • ICICI Bank: 1-866-726-0825
  • IC Savings: 416-784-0200
  • Laurentian Bank: 1-800-252-184
  • Lendwise: 1-877-637-4911
  • Magenta Mortgage Corp: 613-267-4434
  • Manulife Bank: 1 877 765 2265
  • Marathon: 1-855-503-6060
  • MCAP: 1-800-265-2624
  • MCC Centric: 1-877-943-0342
  • Meridian: 1-866-592-2226
  • Merix: 1-877-637-4914
  • Optimum: 1-866-441-3775
  • Pillar Financial: 1-877 279-2116 x 109
  • Radius: 1-866-550-8227
  • RFA: 1-833-228-5697
  • RMG: 1-866-809-5800
  • Royal Bank 1 800 769-2511
  • Scotiabank: 1-800-267-1234
  • Secure Capital: 905-709-8633
  • TD Canada Trust: 1-866-222-3456
  • Wealth One: 1-866-392-1088
  • Westboro MIC: 1-844-729-5764
  • XMC: 1-877-775-2970

Consolidating Debt

I help a lot of homeowners with debt consolidation through a home equity loan as an Ottawa mortgage broker. It's a step that can be beneficial when done in the right circumstances. This is why it's important to talk to a broker before you choose this option. You want to make sure you are choosing the right package for your needs. You also need to be disciplined and committed if you want the most benefits from your debt consolidation.

How Does Debt Consolidation Work?

The goal behind debt consolidation is to take all of those high-interest credit accounts and combine them into one lower interest payment. High-interest debts are your unsecured loans, credit cards, car loans, and student loans. These tend to have a much higher interest rate than a debt consolidation/home equity loan. All of the outstanding balances of your debts get rolled into one mortgage refinance loan with a low-interest rate to help you save money.

Pros and Cons 

It's important to look at the pros and cons of debt consolidation to understanding what the advantages and disadvantages are.


  • You can pay off your debts and secure a much lower interest rate
  • It will reduce your monthly payments
  • It helps to raise your credit score


  • With an extended mortgage period, you end up paying more over a full term
  • If you default it will put your assets and home in jeopardy
  • This type of loan tends to have a higher rate of failure to pay

Saving Money 

If you have a steady and stable income, and decent credit history, it can make sense to take out a debt consolidation loan. Let's say you have 5 credit cards that have interest rates ranging from 20% to 25% and all of those credit accounts are near their limit. It will take you ages to pay these off and you will be paying a huge amount of interest over time.

If you took all of those debts and moved them into one home equity loan with an interest rate ranging between 4% and 8%, you will be paying less interest that can then be put towards the principal of the loan, which means you can pay it off faster.

Improve Your Credit Score

When you consolidate your debt in this way it helps to lower the percentage of the credit that you are utilizing, which is positive for credit scores. The big mistake many people make, however, is to consolidate their debt and then run those credit cards up again. So now, you have those high-interest rate cards to pay off as well as the new home equity loan, putting in worse shape than you were before you took that loan out.

For debt consolidation to work, you have to be committed and keep to your payment plan. You need to create a budget and get your spending under control so that you don't put yourself in the same position you were in. When done the right way, it can make a huge difference to your monthly payments and help you save over time.

If you are thinking about taking out a home equity loan for debt consolidation, give our Ottawa mortgage broker team a call today at (613) 440-0134.


Different Pre's of the Mortgage Process

Part of my job as an Ottawa mortgage broker is to educate people on the mortgage process and how they can make it go more smoothly. One area we see a lot of confusion with is between pre-qualification and pre-approval. While both have some similarities, such as showing sellers that they are serious about buying a home, they still have some major differences. Let's take a look at what is similar, different, and which is better.


With both the pre-qualification and pre-approval, you get an estimate of how much you qualify to borrow for your mortgage. They both help to narrow down your search list to homes that you can reasonably afford. To sellers and real estate agents, they both show that you are committed to buying a home, and shows them that your chances of being approved for that amount are very good. That's pretty much where the similarities end though.


The confusion comes in when lenders use these two terms interchangeably. The problem is, one gives you a much stronger foothold than the other, and here's why:


To get a pre-qualification a lender will do a brief review of all of your financial details. This is how they determine the maximum amount of money they are willing to lend you, based on your affordability. They will check your credit score, debts, income, and assets. However, they don't do any in-depth research for a pre-qualification, and there are some situations where they don't even check your credit score. So your interest rate given for a pre-qualification is just a roundabout guess.

The issue here is that you could take a pre-qualification, start the mortgage process, and then, once the actual research starts, find that you don't qualify for the amount or rates given. It can mean losing out on the home you made an offer on at the last minute. In some cases, a seller or real estate agent won't accept a pre-qualification.


With a pre-approval, lenders do a more in-depth review of your finances. You will be required to provide documentation proving your employment, income, debts, and assets. They also run risk analysis and do other checks. This is why a pre-approval holds more weight than a pre-qualification. Sellers and real estate agents take it more seriously. Once you get that pre-approval, you are given a document that shows you have qualified for, and been approved for a specific amount gives a more accurate rate of interest.

Another difference between a pre-qualification and pre-approval is that with a pre-approval you have certain conditions and requirements that will need to be met at the time of closing. These are set out by the lender. For example, one condition may be that there is no major change in your credit report from the time the pre-approval is done to the time of closing. Some people make the mistake of making major changes, such as changing jobs or taking out a new line of credit before the mortgage process is done. This can cause them to not get the original pre-approval because they didn't meet the conditions any longer.

If you are looking to get a pre-approval letter or want to know more about the process, give our Ottawa mortgage broker team a call today at (613) 440-0134!

Why Use an Experienced Buyer Agent When Purchasing a Home?

Why Use an Experienced Buyer Agent When Purchasing a Home?

Buying or selling a home is one of the biggest financial transactions most people make during their lives, so it’s important to do it right – and that means tapping into the expertise of someone trained in the field: A Buyer Agent.
You wouldn’t do your own dentistry or try to remove your own appendix; you’d turn to someone specially trained to do the job. The same holds true for a real estate transaction: you want to be able to rely on someone with knowledge and skills you don’t have to ensure the result is a
positive one. A Buyer Agent is your real estate “surgeon,” guiding you through the proper steps to purchasing the property you want with no unpleasant side effects.
Of course, there are a lot of Buyer Agents in the marketplace, and you want a skilled one. But what, exactly, does that mean? Here’s what a good Buyer Agent will provide:
 Quick access to the MLS system. A Buyer Agent sees the listings posted on the Multiple Listing System (MLS) before they arrive in your inbox. They can stay ahead of the game and identify those properties that require quick action so you don’t lose out on a dream home. In a hot market, time matters.
 A proactive approach. A good Buyer Agent will be out knocking on doors in desirable neighbourhoods, looking for opportunities that may not have appeared on MLS yet. They can alert prospective sellers that there are interested buyers just waiting for an opportunity to invest in the property. As the saying goes, “If you don’t ask, you don’t get.”
 Negotiating skills. Buyer Agents negotiate for a living. Can you say the same? They know your needs and your limits, and they are skilled at assessing the seller’s perspective, too. Add to that their knowledge about the selling landscape in your market and you have an advocate who can help you reach your ultimate goal: obtaining your dream property while negotiating a deal that both parties view as a win-win situation.
 The big picture. Skilled Buyer Agents know their customers’ needs, wants and goals, both long- and short-term. While you may get excited by a property with all the bells and whistles, it’s the agent’s job to keep a level head and remind you that, for example, the property won’t appreciate enough during the three years you plan to keep it for you to pay the asking price. They aren’t swayed by the emotion and excitement you may feel for a property that doesn’t meet your needs. Consider your agent as a valuable sober second thought.
 Knowledge of the landscape. Would you want someone from Halifax to sell you a home in Vancouver? It’s unlikely. You want a Buyer Agent who knows and understands the local marketplace. They are familiar with the neighbourhoods, the school system and the public transit options. They can recommend a good family doctor and a great sushi restaurant, or point you to a great cycling path or a spacious park. They speak from experience.
 Trusted feet on the ground. If you’re buying an investment property from a distance, you want a Buyer Agent who will be your eyes and ears. They’ll know what you’re seeking and they’ll have the judgment to determine if a property meets your needs. You can surf the Internet all day, but there is nothing like having someone available to view the property in person and decide whether there are concerns that don’t show up online.
 An understanding of new builds. If you’re buying directly from a builder, there are details you may overlook or intricacies that escape you. A skilled Buyer Agent knows how the purchase of a new home differs from choosing an existing property, so he/she will ask the right questions and defend your interests.
 Proper packaging. In a competitive market, a good Buyer Agent will know how to get your offer to the front of the line so it will be noticed. It requires someone who is well- connected and has good working relationships with other agents and someone who knows what makes a good offer.
 Contracts done correctly. When you use a Buyer Agent, you can be confident that the contract and paperwork you sign will protect you from any problems that might arise. They know real estate contracts backward and forward and know which clauses are essential to a contract to ensure that you aren’t surprised by hidden issues or expenses. Don’t leave the details of such a purchase to amateurs, like yourself. As mortgage brokers, we at the Wilson Team have worked with numerous agents, both skilled and not-so-skilled. We want to match you with the cream of the crop. Are you willing to do what it takes and set up the plan in order to get the property on? Are you willing to do the work you put yourself in front of everyone else? If so, you might be the right fit for us. Please start with filling out this questionnaire and we will have one of our experts reach out to you.

HELOC vs. Cash-Out Mortgages: Which Is Right for You?

HELOC vs. Cash-Out Mortgages: Which Is Right for You?

If you’d like to have some cash on hand for renovations, travel or paying off debts, why not take advantage of the equity you have in your home? After all, you’ve put your hard-earned money into your property for years; you deserve to benefit from your investment.
The Wilson Team of Mortgage Specialists will work with you to decide whether a home interest line of credit (HELOC) or a cash-out mortgage is best for your needs; then, we’ll help you to get the ball rolling.
What is a HELOC?
A home equity line of credit, or HELOC, is a secured form of credit that uses your home as a guarantee that you’ll pay back the money you borrow. It is a revolving line of credit that is unrelated to your mortgage. It allows you to borrow money up to your approved limit, pay it back and borrow again. The maximum credit allowed is 65 per cent of the purchase price or market value of your home at the time
you are approved for the HELOC.
HELOCs have a draw period during which you can access the money that has been approved for you and a repayment period, during which you must repay the principal and interest accrued. Yes, interest: a HELOC works like a credit card. Each time you withdraw funds, you must pay them back with interest – and that interest rate can be variable. Generally, minimum monthly payments are required once you borrow money.
The term for a HELOC varies, depending on the lender; some can last up to 30 years with a 10-year draw period and a 20-year repayment period. The Wilson Team can help you find the most advantageous terms.
Remember, you are using your home as collateral, so failure to make payments could result in the loss of your home, so discipline is essential.
What is a Cash-Out Mortgage?
A cash-out mortgage refers to a new mortgage that pays off your existing mortgage and provides additional cash that you can use for other purposes. Be aware that the terms of your mortgage will change; you’ll likely have a new repayment schedule and rate. Since you’ll owe more than you do currently, you’ll either need to make higher monthly payments or amortize payments over a longer time period. However, if the interest rate is more favourable now than when you first financed your home, it can work to your advantage.
When you sign on the dotted line for this refinancing loan, you receive your money in a lump sum. The
money is first used to pay off your existing mortgage, as well as closing costs and prepaid items such as home insurance. The remainder is yours to use as you see fit over as long a period as you wish. Obtaining a HELOC Banks and a variety of lenders offer HELOCs. In order to qualify, you’ll need to:

  • Provide proof that you own your home
  • Provide mortgage details, such as the current mortgage balance, term and amortization period
  • Allow your lender to assess your home’s value

You will also need to register your home as collateral, using the services of a lawyer, a title company or,
in Quebec, a notary.
Closing costs for a HELOC are minimal, but there may be annual fees and transaction fees.
Obtaining a Cash-Out Mortgage
A cash-out mortgage is a new mortgage, so you’ll have to reapply for mortgage approval. Remember,
you’ll need at least 20 per cent equity in your home before you can even consider refinancing.
You’ll need to provide your lender with documentation for:

  • Your credit score
  • Proof of income
  • Company financial statements, if you own a business

You’ll also need to be prepared for closing costs similar to those you had for your original mortgage.
If you know that you’ll need a specific amount of money for a particular renovation project or a dream trip, a cash-out mortgage might make the most sense, since it is a structured plan. If your needs are less predictable, but you anticipate needing more money periodically than you have on hand, the flexibility
offered by a HELOC may be best for you.
Once you obtain either a HELOC or a cash-out mortgage, you can spend the available money at will.
However, the Wilson Team of Mortgage Specialists advises you not to enter into either of these
transactions lightly. Have a plan for the money you’re borrowing and create a repayment schedule and
stick to it.
Let us help you determine which of these options is best for your individual needs. The Wilson Team is here to help you make your dreams come true while accessing the best possible terms.

An Alternative to Residence Halls: Buying a Home for Your Post-Secondary Student

An Alternative to Residence Halls: Buying a Home for Your Post-Secondary Student As your child prepares to head off to college or university away from home, it’s likely that your emotions aren’t the only thing that are suffering – your bank account is probably in shock, too. After all, in addition to the hefty sum you’ll be doling out for tuition, room and board will also eat into your bank balance.
Buying a home for your child to share with other students – and their monthly rent cheques -- is one alternative to saving money on residence costs. The Wilson Team of mortgage professionals understands the ins and outs of buying and managing a rental property and we’re here to help you decide if owning student housing is the right move for you to make.
Many parents today are purchasing homes for their children to live in during their university or college years. Before jumping on the bandwagon, consider some of the positives and negatives of purchasing as second home and renting it to students:
The Good:
 Student housing can cost as much as $30,000 annually. If you purchase a home and rent some of
the rooms, rents can generally cover the mortgage, saving you housing costs in the long term.
 You’ll also save on the cost of campus meal plans; buying food and cooking at home is generally cheaper.
 If more than one of your children attends university/college in this locale, you’ll be far ahead on housing costs. Holding the property longer can also affect resale value – in a positive way, if all goes well.
 Solid rental properties in student-friendly locations can reap monetary rewards long after your child graduates.
 You and your child will become experts in property management.
 If you choose wisely, the property will appreciate in value prior to resale.
The Bad:
 You may not want the hassle of being a property manager.
 Students can cause property damage or get behind on their rent.
 If the market changes, the resale value may not increase.
 Fixing up the property for resale may cost more than you expected. OTHER CONSIDERATIONS:
If you are seriously considering purchasing a home for your child to occupy during his/her post- secondary years, give some thought to these additional points:
 Location, location, location. Proximity to the university/college and/or to public transportation is essential to attracting and retaining tenants.
 Know the market. Is property in the area increasing in value or decreasing? Is the value of homes in the area inflated? Would this be a good investment in the area?
 Bedroom bonanza. The more bedrooms there are, the better the home’s earning potential.
 Vacancies, begone. Avoid or minimize vacancies by requiring a 12-month lease, if feasible, or give students a “hold-the-room” rate to hold their rooms during the summer when they return home.
 Calculate costs. Make sure you understand what your costs will be, including the down payment, mortgage, insurance and property taxes. Determine if the benefits will make it
financially worthwhile.
The Wilson Team will be with you every step of the way as you make your purchase. From a mortgage perspective, here is some useful information:
 If the home is a single-family home and your child doesn’t pay rent, it can be considered a second home for tax purposes. This would make your eligible for CMHC mortgage insurance,
reducing your down payment to as little as five per cent.
 If any mention of rent is made, rental purchasing rules apply, requiring a minimum down
payment of 20 per cent.
 Projected rents can be used to help you qualify for a mortgage.
 Rents must be declared on your tax return.
 If you need/want to spruce up the property, you can obtain funding for some of those improvements through the mortgage process.
 You can claim some of your expenses, including mortgage interest, on your tax return.
If you decide to take the plunge, the Wilson Team has your back. Rely on us to help you obtain the best possible mortgage for your purposes.