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Federal Budget 2019 Offers Help For First Time Home Buyers

In the Housing section of Canada's federal budget released on March 19, 2019, the greatest emphasis is on the affordability of housing for first time home buyers. First, the straight-forward news: effective this year, the Home Buyers' Plan that allows Canadians to withdraw funds from their RRSP to buy a home will be increased to a limit of $35,000. If you've been diligent in using this saving product, it could work to your advantage when it's time for your down payment.

Find Financial Flexibility With an Interest-Only Mortgage

Are you looking for a mortgage that will give you flexibility with your finances, have lower payments during the term, and provide you with extra monthly cash flow?

Are Rental Suites Still Mortgage Helpers?

As the price of property in Canada has continued to rise, many home buyers have turned to purchasing a house with a rental suite to help with mortgage payments. Over the past few years, we've worked with many folks who were only able to qualify for a mortgage if they had rental income to supplement their household earnings. But if you're planning on your tenant completely taking care of your mortgage payments, is that really the case?

B.C. Budget Home Speculation Tax Details Released

The provincial budget originally announced the introduction of a new speculation tax on residential property in BC aimed at property owners – both foreign and domestic – who don't pay taxes to the province. But buried in the "Homes for B.C." housing plan, one of several plain-language documents that accompanied the budget, is the idea that "the Province will also introduce a non-refundable income tax credit which will allow those who pay income tax in B.C. to offset the property tax." This apparent contradiction led many people to ask who exactly will be paying the tax.

5 Questions to Ask About Closing Details When Buying a Home

  1. What type of legal representative do I need to complete the purchase of my home?

    British Columbians are some of the lucky few in Canada who have a choice when it comes to selecting their legal representative to complete their purchase, sale, or refinance transaction. They have the choice between a lawyer and a B.C. notary public.

    Both lawyers and notaries can assist in several aspects of the home buying process such as complex paperwork and legal contracts, overall their main goal is to make you aware of special considerations and assist you with the closing process. For a more in-depth understanding of what each roll entails, read Lawyer vs. Notary Public: What’s the Difference.

  2. What is Property Transfer Tax?

    If you’re a first time buyer in British Columbia and you’re purchasing a property under $500,000, there’s no property transfer tax. Between $500,001 and $524,999 you may be eligible for an exemption of the property transfer tax on a sliding scale.

    There is also an exemption on newly built homes up to $750,000, with a sliding scale of reduced property transfer tax up to $799,999.

    However, if this is not your first home and it is not a new build, you’ll be paying one percent on the first $200,000, and then two percent on the portion of fair market value greater than $200,000 and up to and including $2,000,000. So, on a $600,000 house, you’re looking at $10,000 property transfer tax. If this cost is an issue for you, we do have some cash back mortgage options to assist with the payment, provided you qualify.

  3. What makes up closing costs?

    There may be closing costs customary or unique to a certain locality, but closing costs are usually made up of the following:
  • Lawyer/Notary fees
  • Property taxes/Levees and fees
  • Interest adjustment (paid from closing to 30 days before first monthly payment)
  • Title insurance
  • Homeowner’s insurance policy (plus fire and flood insurance if applicable)
  • Any documentation preparation fees
  1. What happens prior to closing day?

    At Auxilium we will thoroughly review your file 14 days before you take possession of your new property to ensure that your file is in order. During this time we will also make sure that your lawyer or notary has received instructions from us in order to ensure that your mortgage closes on time, without problems.

    Around a week before your closing date you will need to meet with your lawyer or notary to sign the mortgage papers. Prior to the appointment, you must ensure that the following items are taken care of:
  • The balance of your down payment funds must be accessible, as you will need to provide the lawyer/notary with a certified cheque to cover the down payment and other closing costs. Your lawyer or notary will contact you in advance with these details.
  • House insurance with the loss payable to your chosen lender must be arranged.
  • Have read the lawyer’s/notary’s paraphrased documents prior to your meeting as they are lengthy and you will not have time to read them while in their office

    When meeting with your lawyer or notary, you'll present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, utilities, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

    Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan.
  1. What can I expect to happen on closing day?

    On closing day, your lawyer or notary will be in contact with your lender to ensure they are being funded. Once the money is received, they will begin the process of transferring the money to the appropriate parties, and registering the title in your name if you are purchasing. The lawyer or notary will work to inform you of their progress on that day, and in most cases transactions are completed by midafternoon.

The Auxilium Team offers a complimentary consultation to start your home buying process; contact us today at 250-590-6520 (toll-free 1-855-590-6520). You can also visit us at 307 Goldstream Avenue during regular business hours. We can arrange an appointment evenings or weekends to work with you.

2 Questions to Ask About Insurance When Buying a Home

  1. What is mortgage insurance?

    There are two types of mortgage insurance. The first is a policy that protects lenders against losses that result from defaults on home mortgages, and it's required for borrowers making a down payment of less than 20 percent. If this insurance didn’t exist, lenders would not lend to that loan-to-value, which is the amount of the mortgage loan compared to the value of the property. Thus why insurance was created: To allow more people into the market.

    Like home or auto insurance, mortgage insurance requires payment of a premium for protection against loss, and is used in the event of an emergency. If a borrower can't repay an insured mortgage loan as agreed, the lender may foreclose on the property and file a claim with the mortgage insurer for some or most of the total losses.

    The second kind of insurance is what you take out in the event that something happens to you. This type of stand-alone insurance is a good idea because your mortgage is probably your single biggest liability, and if something were to happen to you, your partner, or both of you, you want to make sure that no one has to deal with that additional stress. Contact Auxilium Mortgage for more details.

  2. Do I need homeowner’s insurance?

    Yes. Home insurance is a key requirement for your mortgage. The Auxilium Team is happy to provide you with a referral to our trusted partners for a consultation and quote. 

The Auxilium Team offers a complimentary consultation to start your home buying process; contact us today at 250-590-6520 (toll-free 1-855-590-6520). You can also visit us at 307 Goldstream Avenue during regular business hours. We can arrange an appointment evenings or weekends to work with you.

5 Questions to Ask About Working with a Mortgage Broker

  1. I found the perfect home, what steps need to be taken to secure a loan?

    If we have not already done a hard pre-approval for you, then the first step is to complete a loan application. This can be done online, over the phone, or in person. Regardless of which way we do it, we’ll need documentation from you. One of our team will assist in advising you what specific documents will be required. During the application process we will also order a report on your credit history, complete a thorough credit application, and then review all your options with you. We'll make it easy, promise!

  2. How do I choose the best loan for me?

    Your personal situation will determine what type of loan is best for you. There are a few questions you can ask yourself to help narrow down your options.
  • Do you expect your finances to change over the next few years?
  • Would fluctuations in your monthly mortgage payments trouble you?
  • Do you want to own more than one property in the future?
  • Are you planning to live in this home for a long period of time?
  • Do you wish to be free of mortgage debt as your children reach college or as you hit retirement?

    Your answers to questions such as these will help us decide which loan best fits your needs
  1. How do you determine the best loan amount for me?

    We consider your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include long-term debts such as car or student loan payments, alimony, or child support. We take those numbers and correlate an affordable mortgage amount, but more importantly, one that’s comfortable for you. Once again, this is something that is done during the hard pre-approval stage.

  2. What happens after I’ve applied for my loan?

    Once we have completed the application and gathered the supporting documents, we assess the best lender and submit your application to them. Response time is usually anywhere from one day to one week depending on how busy the lender is and the complexity of the application. If we require further information, the sooner you can provide it, the faster your application can be approved and subjects removed. Once we have an approval, we will set up an appointment to review it with you and ensure that you are satisfied.

  3. What is an Appraisal Review?

    Whenever a property has less than 20 percent down and is CMHC or government insured, the insurer will pay for the appraisal. However, when you have more than 20 percent down, a lender is more than likely going to ask for an appraisal, and that’s a cost you’re going to have to cover.

The Auxilium Team offers a complimentary consultation to start your home buying process; contact us today at 250-590-6520 (toll-free 1-855-590-6520). You can also visit us at 307 Goldstream Avenue during regular business hours. We can arrange an appointment evenings or weekends, to work with you.