Jessi Johnson | FIRST HOME INFO

LTV (loan to value)

Sun, 07 Mar 2010 20:38:30 +0000

Loan-to-value ratio (LTV) is the amount of the mortgage loan (liability) compared to the value of the property. This ratio is calculated by the lender prior to providing the loan. The results of this calculation help to determine whether or not the applicant will qualify for a loan and whether the application, if approved, will [...]

Broker discounted rate

Sun, 07 Mar 2010 20:38:30 +0000

The mortgage broker discounted rate is that wonderful rate you can obtain for your mortgage which is generally 1.5% less than the bank posted rate. Share and Enjoy:

Presale purchase

Sun, 07 Mar 2010 20:38:29 +0000

Purchasing presale is when you buy a property before it’s built. If you are planning on selling this property before completion to make a profit, than that would be a perfect example of buying on speculation. Share and Enjoy:

Debt servicing ratios (GDS / TDS ratios)

Sun, 07 Mar 2010 20:38:28 +0000

Debt servicing ratios are the ratios used to calculate debt owed by someone looking to obtain a mortgage. Gross Debt Service Ratio (GDS): The percentage of the borrower’s income that is needed to make all payments for costs associated with housing. There is a maximum amount associated with this ratio to ensure that borrowers can afford [...]

Buying on speculation

Sun, 07 Mar 2010 19:08:21 +0000

High ratio mortgages

Sun, 07 Mar 2010 19:08:21 +0000

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Qualifying rate

Sun, 07 Mar 2010 19:08:19 +0000

When qualifying for a mortgage, the lender will require you to be qualified for a specific rate regardless of the term or product you take. The concept of a qualifying rate is to reduce the amount of Canadians who are over-leveraging themselves. In the event you have 20% or greater down payment on purchase or [...]

Bank posted rate

Sun, 07 Mar 2010 19:08:16 +0000

The bank posted rate is the rate banks would previously attempt to sell you until mortgage brokers came into play. Now most banks have smartened up and seldom insult ones intelligence with such high rates. Generally a bank posted rate is about 1.5% higher then a broker discounted rate. Share and Enjoy:

Buying on speculation

Jessi — Sun, 07 Mar 2010 18:36:30 +0000

Certainly not the safest real estate investment concept but one that was been very successful for people in the past. Buying real estate on speculation essentially means you plan to make your capital (sale revenue) from the equity growth of the property, rather than obtaining a tenant and waiting for the years to pay off the mortgage. Purchasing pre-sale, waiting a few years and selling before completion is a perfect example. You are required to pay the deposit up front but that’s it. This has proven to be lucrative at times but quite the opposite when the property values decline. Remember to always be prepared (qualified) to complete the saleand be cognizant of the fact that the property value could decline instead of increase.

Episode 131 – Tax deductions on rental properties

Jessi — Sat, 06 Mar 2010 02:53:08 +0000

Do you have a rental property or are considering purchasing one? Make sure to seek advice from your accountant (hopefully a good accountant) regarding this type of real estate ownership. I am by no means an accountant but know a few good tricks. Did you know that the interest portion of your mortgage on a revenue property is tax deductible? Almost every expense you may have with regards to the revenue property is a write off. When you are purchasing or simply owning this type of real estate property, here are some examples:

Lawyer, inspection and appraisal costs when purchasing
Annual property tax (please don’t quote me, I am not positive about this)
Strata fees (if applicable)
Mortgage interest
All upkeep and repairs
Advertising costs for renters
etc.

Remember that owning a rental property is like owning a business. Make sure to take advantage of this. If the government is going to tax you for the rental income, you want to write as much of that off as you can. It’s much better to have the larger mortgage on your rental properties then on your principle residence. Unless of course the mortgage on your principle residence is used for a revenue property. Then this too would be tax deductible.

I am always listening for your opinion so please feel free to comment below and check out my other blogs on this site. I am a Vancouver mortgage broker working with everyone from first home buyers to investors. At the same time I do my best to education the public on how to be more financially savvy over all. If you would like to learn more about mortgages and over all real estate, please check out www.jessijohnson.ca. To subscribe to my vblogs, please click here: www.firsthomeinfo.ca/blog