Secrets to Mortgage Freedom ...

While a recent poll reveals that on average, Canadians believe they will be mortgage-free by the age of 55, those who have already achieved that goal have some advice: make a plan and be prepared for sacrifices. Read More ...

West Lincoln Memorial Hospital Rally

In 2012 budget, the government announced the cancellation of the project to rebuild the West Lincoln Memorial Hospital despite the ongoing efforts of the community in raising funds to replace the ageing facility and equipment. This hospital has served the 65,000 residents of West Niagara for over sixty years. A Rally has been organized to demonstrate the need for a new WLMH in this growing community. Citizens are invited to attended the rally on Wednesday May 2, 2012, 7:00pm at Grimsby Secondary School.  The rally kicks off the campaign by providing us with the opportunity to come together and exercise our responsibility as citizens to reinforce the role we all can play in changing the outcome for a new WLMH.

Visit www.wlmhrally.com for more detail!

Mortgage Fraud Awareness

The promise of a quick profit in real estate can be hard to resist. But consumers who misrepresent information when buying or refinancing a home could end up being responsible for any shortfall when the property is sold. If the misrepresentation is intentional, they could also be held criminally responsible as accomplices to mortgage fraud. The most common form of mortgage fraud, called straw buying, occurs when someone with good credit is convinced to put their name on a mortgage application for a home that someone else will be buying, usually in return for the promise of a quick profit. To protect your name, credit and family, Canada Mortgage and Housing Corporation (CMHC) offers the following tips on how to avoid becoming part of a mortgage fraud scheme:

• *Never accept money, guarantee a loan or add your name to a mortgage unless you fully intend to purchase the property. If you allow your personal information to be used for a mortgage, even for a brief period, you could be held responsible for the entire debt even after the property is sold.
• *Always know who you're doing business with. If you're buying or selling a home, use only licensed real estate agents/brokers and other industry professionals. And never sign anything until you know exactly what you're signing.
• *Determine the sales history of any property you're thinking about buying, and consider having it inspected and appraised. Ask for a copy of the land title search, and find out if anyone else has a financial interest in the home. If a deposit is required, make sure the funds are held "in trust" by the vendor's realty company or lawyer/notary.
• *Get independent legal advice from your own lawyer/notary. Talk to your lawyer/notary about title insurance and other alternative methods of protection.

To protect yourself from identity theft, never give out your personal information until you know who you're dealing with and how your information will be used. Review your mail, bank statements and other financial statements on a regular basis for inconsistencies. Shred or destroy all personal and financial documents before you throw them away. And inspect your credit report on a regular basis by contacting Equifax Canada at www.equifax.ca and TransUnion Canada at www.transunion.ca. Most important, be wary of anyone who approaches you with an offer to make a quick profit in real estate. Remember: if a deal sounds too good to be true, it probably is. If you suspect that you or someone you know has been the victim of real estate fraud, contact your local police department immediately. For information on fraud prevention or any other aspect of owning, maintaining or buying a home, visit the CMHC website at www.cmhc.ca.

Clarifying Mortgage Penalties

Last month, the federal government published a Mortgage Prepayment Code to ensure borrowers are better informed by lenders (federally regulated institutions) when it comes to situations where mortgage prepayment penalties may be charged – namely, for the purpose of clarifying interest rate differential (IRD). This is a positive step, because IRD calculations and penalties have traditionally been very confusing to borrowers. IRD is a charge many borrowers face when paying off a mortgage prior to its maturity date, or by paying the mortgage principal down beyond the amount of annual allowable prepayment privilege limits. And IRD penalties can prove quite costly depending on the remaining mortgage term. IRD is based on: 1) The amount that is being prepaid; and, 2) An interest rate that equals the difference between the original mortgage interest rate and the interest rate that the lender can charge today when re-lending the funds for the remaining term of your mortgage. Most closed fixed-rate mortgages have a prepayment penalty that is the higher of three months' worth of interest or IRD. The new code requires that lenders "provide the information in language, and present it in a manner, that is clear, simple and not misleading."

The Code requires lenders to provide, among other things:

1. Annual Prepayment Information. This includes such things as prepayment privileges that the borrower can use to pay off their mortgage faster without having to pay a prepayment charge. Examples include making lump-sum prepayments, increasing the regular payment amount and increasing the frequency of the payment to weekly or bi-weekly. Lenders must also inform borrowers of the dollar amount of the prepayment that the borrower can make on a yearly basis under the terms of their mortgage without having to pay a prepayment charge. As well, an explanation must be provided on how the lender calculates the prepayment charge for the borrower's mortgage (for example, a certain number of months' interest or IRD). 2. Information Provided When Borrower Faces a Prepayment Charge. If a prepayment charge applies and the borrower confirms to the lender that the borrower is prepaying the full or a specified partial amount owing on their mortgage, the lender will provide, among other things, a written statement to the borrower including the applicable prepayment charge and a description of how the lender calculated the prepayment charge (for example, whether the lender used a certain number of months' interest or IRD). If the lender used IRD to calculate the prepayment charge, the lender will inform the borrower of: the outstanding amount on the mortgage; the annual interest rate on the mortgage; the comparison rate that was used for the calculation; and the term remaining on the mortgage that was used for the calculation. 3. Enhancing Borrower Awareness. To assist borrowers in better understanding the consequences of prepaying a mortgage, lenders will make available to consumers information on the following topics: differences between various types of mortgages; ways in which a borrower can pay off a mortgage faster without having to pay a prepayment charge; ways to avoid prepayment charges (for example, by porting a mortgage); how prepayment charges are calculated, with examples of the prepayment charges that would apply in specific circumstances; and actions by a borrower that may result in the borrower having to pay a prepayment charge. Click here for full details of the code requirements from the federal finance department. As always, if you have questions about mortgage penalties, or other mortgage-related questions, I'm here to help!