When it comes to mortgages, insurance is necessary to protect the lender on these types of loans, which deal in large sums of money. There are three different tiers relating to insurance, which all have different minimum down payment amounts and varying premium insurance fees.

1. Insured mortgages typically have a less than 20% down payment and are insured with mortgage default insurance through one of Canada’s mortgage insurers: CMHC, Sagen or Canada Guaranty. In these cases, the premium is based on a percentage of the loan amount, which is added to the mortgage and paid monthly.
2. Insurable mortgages typically have a 20% or higher down payment and do not require mortgage insurance, though they can qualify for it. In these cases, the homeowner wouldn’t have to pay an insurance premium, but the lender can if they choose to.
3. Uninsurable mortgages do not meet mortgage insurer requirements; some examples of these types of mortgages can include: refinances, mortgages with an amortization longer than 25-years or mortgage files where the real estate is more than $1M in value and/or purchase price. No insurance premium required.

While insured and insurable mortgages are more common and typically more cost-effective when it comes to lending money, therefore clients who opt for these mortgages often get better rates.

When it comes to an uninsurable mortgage, this means that the lender is providing their own funds to the client without the protection of insurance, and have to commit to the loan for the entire term. Due to this, uninsurable mortgages tend to have higher interest rates as they are a higher risk loan.

Typically, uninsurable mortgages require a minimum of 20% down on the loan and are available for up to 30-year amortization. It is also important to note that an uninsurable mortgage will often require a higher Gross Debt Service (GDS) and Total Debt Service (TDS) ratio to indicate that you can carry the loan without high risk.

While some lenders may offer more flexibility when it come to an uninsurable mortgage, if you are looking to refinance or change to a longer amortization period, it is best to discuss with your DLC mortgage expert before making any changes to your mortgage.

written by DLC Chief Economist Dr. Sherry Cooper

You work a lifetime building your nest egg, so the thought of losing financial control can be difficult at any point in life. However, having a trusted document like a power of attorney (POA) can bring you and your loved ones peace of mind. Contrary to what some believe, the reality is that your POA does not own your money or property, and they cannot change your will, make a will, or change a beneficiary on an insurance plan. Your POA is there to learn about your life events, needs, or concerns and help make financial or medical decisions on your behalf if you are unable to.

This is a decision that requires careful consideration, and like any financial tool, there are pros and cons:

Pros 

• The document makes it clear who is responsible for your money and property, even temporarily, if you need help managing them. Your attorney must manage your money and property responsibly and for your benefit. If questioned, they may be required by law to account for their actions.
• The document can be as flexible or time-sensitive as you would like or as general or specific as you need.
• You can appoint multiple attorneys and request they make decisions in unison or highlight that they can act separately if one attorney is unavailable. You can also appoint an alternate or successive attorney. This may help reduce the chance of fraudulent activity.

Cons 

• There is a risk that if the wrong attorney is designated, you can become vulnerable to financial abuse. It can happen where an attorney makes decisions based on their best interest rather than the interests of the estate they manage.
• If your document lacks clarity, there is a risk that your finances could be managed in ways you do not simply agree with.
• If multiple attorneys are appointed, disagreements could cause problems or delays in managing financial affairs.

You should always seek independent legal advice to ensure your needs and expectations are clear. Appointing a POA is dynamic; it can be changed or revoked at any time.

Contact your Dominion Lending Centres mortgage expert for more details on how HomeEquity Bank will review and confirm your POA for the mortgage transaction.

written by DLC Chief Economist Dr. Sherry Cooper

Are you looking to sell your home? We have a few tips to help you make the most of the spring season!

1. Hire an Experienced Realtor: Before preparing your home for the Spring market, you will want to hire an experienced realtor! A good realtor will serve as your guide through the entire sales process, helping you get your home ready for listing, showing potential buyers and finalizing the eventual sale. This is even more important given the changing landscape in relation to additional safety protocols with viewings and even virtual viewing options. Now, more than ever, the expertise of a realtor will help you navigate the sales process.
2. Prioritize Repairs and Improvements: Before listing your home, it is important to go through room-by-room and address any issues such as chipped paint, small holes in the wall, broken fixtures, old appliances, etc. Correcting these minor issues will help your home truly shine when buyers walk through.
3. Clean and Stage Your Home: Now that you have made the necessary minor repairs, you can start staging your home! Start with the exterior of your home and ensure you tidy up the yard, remove any junk and wash your windows! When it comes to the interior of your home, you will want to declutter and do a deep clean (a professional cleaning service can come in handy for this!). Once your home is decluttered and clean, your real estate agent can help you stage it so that it appears spacious and inviting.
4. Consider a Pre-Listing Inspection: Once you are ready to list your home, it can be a good idea to consider a pre-listing inspection. The inspector would conduct a complete visual inspection of all interior and exterior elements (including HVAC systems, wiring, ceiling, chimneys, gutters, etc.), which would help put prospective buyers at ease.
5. Organize The Paperwork: There is a lot of paperwork when it comes to selling your home. Having all of these documents organized and together for potential buyers will help to speed up the process and allow them to address any questions before the deal is finalized. Permits, renovation or repair receipts, warranties, rental agreements and copies of your utility bills are all good records for potential buyers.

Whether you are looking to buy or sell, it is important to work with a trusted real estate and Dominion Lending Centres mortgage expert to ensure the best outcome for you and your family!

written by DLC Chief Economist Dr. Sherry Cooper

The housing supply shortage is one of the top issues in Canada’s real estate market. To address it, cities like Calgary 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 alberta’s 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 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.

Enjoy more protection for new-build home purchases with a residential title insurance policy from FCT.

written by DLC Chief Economist Dr. Sherry Cooper