25 Feb

What is Mortgage Refinancing?

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Posted by: Avaljit Sandhu

When Does Refinancing Make Sense?

Mortgage refinancing is the process of replacing your existing mortgage with a new one, often with different terms and interest rates. Homeowners refinance for various reasons, such as lowering their interest rate, reducing monthly payments, consolidating debt, or accessing home equity.

Refinancing makes sense if:

  • You can secure a lower interest rate, reducing overall interest costs.
  • You need to consolidate high-interest debts into a lower mortgage rate.
  • Your home’s value has increased, allowing you to access home equity.
  • You want to switch from a variable to a fixed-rate mortgage for stability.
  • You wish to change your mortgage term to suit your financial goals.

Costs & Considerations

While refinancing can be beneficial, it comes with costs and considerations:

  • Prepayment Penalties – Some lenders charge penalties for breaking an existing mortgage early.
  • Legal Fees – A lawyer is needed to finalize the new mortgage.
  • Appraisal Fees – Lenders may require a home appraisal to determine its current market value.
  • New Mortgage Terms – Ensure the new mortgage aligns with your long-term financial plans.

Difference Between Renewal & Refinance

  • Renewal happens at the end of your mortgage term, allowing you to negotiate a new rate with the same lender or switch lenders without breaking your mortgage.
  • Refinancing involves replacing your current mortgage before its term ends, often requiring additional costs but providing financial benefits like lower interest rates or debt consolidation.

Process & Timeline

  1. Assess Your Financial Goals – Determine why you want to refinance.
  2. Check Your Credit Score – A good credit score improves your chances of securing a better rate.
  3. Evaluate Your Home Equity – Lenders may allow you to borrow up to 80% of your home’s value.
  4. Compare Lenders & Mortgage Rates – Look at options from different financial institutions.
  5. Apply for a New Mortgage – Submit your financial documents, such as income proof and bank statements.
  6. Approval & Appraisal – The lender assesses your eligibility and may require a property appraisal.
  7. Closing the Loan – Once approved, your lawyer finalizes the new mortgage agreement.

Is Refinancing Right for You?

Refinancing is ideal if it aligns with your financial needs and goals. If you need lower payments, better interest rates, or debt consolidation, refinancing may be the right choice. However, consider all costs before proceeding.

How Refinance Mortgage Works

When you refinance, the new lender pays off your old mortgage, and you start a new loan agreement. Your monthly payments, interest rate, and loan term change based on the new mortgage terms.

When to Refinance Mortgage

  • When interest rates drop significantly.
  • When your credit score improves.
  • When your home equity has increased.
  • When you need to consolidate debt.
  • When you want to switch from a variable to a fixed rate.

Refinance When Home Value Increases

If your home’s value has risen, you may qualify for a larger loan, allowing you to access equity for renovations, investments, or other financial needs.

Why Refinance Your Mortgage

Refinancing allows you to:

  • Reduce your interest rate and monthly payments.
  • Consolidate debt into a single, lower-interest loan.
  • Access home equity for investments, renovations, or other expenses.
  • Adjust your mortgage term to match your financial goals.

FAQ: Mortgage Refinancing

Q: How long does the refinancing process take? A: Typically, 2 to 4 weeks, depending on the lender and required documentation.

Q: Can I refinance with bad credit? A: Yes, but your interest rate may be higher. Improving your credit score can help secure better rates.

Q: What documents are needed for refinancing? A: Proof of income, bank statements, property details, and a credit check.

Q: How much equity do I need to refinance? A: Most lenders require at least 20% equity in your home.

FAQ: Avaljit Sandhu – Dominion Lending Centres Mainstream Mortgages

Q: Who is Avaljit Sandhu? A: Avaljit Sandhu is a mortgage professional at Dominion Lending Centres Mainstream Mortgages, helping clients secure mortgage financing in Winnipeg, Manitoba.

Q: What services does Avaljit Sandhu offer? A: Mortgage refinancing, first-time homebuyer mortgages, debt consolidation, and home equity loans.

Q: How can I contact Avaljit Sandhu? A: You can reach out through Dominion Lending Centres Mainstream Mortgages for expert mortgage advice and refinancing assistance.

If you’re considering mortgage refinancing, contact Avaljit Sandhu at Dominion Lending Centres Mainstream Mortgages to explore your options and make the right financial decision.

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21 Feb

First-Time Homebuyer in Canada: Qualifications, Incentives & Mortgage Essentials

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Posted by: Avaljit Sandhu

Buying your first home is a big deal! It’s exciting, but it can also feel a little overwhelming. Between saving for a down payment, understanding mortgage options, and figuring out if you qualify for any government incentives, there’s a lot to think about. But don’t worry! This guide will break everything down in a simple, easy-to-follow way.

Understanding First-Time Homebuyer Qualifications in Canada

So, what does it mean to be a first-time homebuyer in Canada? The general rule is that you (or your spouse/common-law partner) must not have owned a home in the past four years. But there are a few exceptions:

  • If you’re separated from your spouse, you might still qualify.
  • Some special cases, like having a disability, may have different rules.

Since different programs have different definitions of a first-time homebuyer, it’s important to check the requirements for each one.

Government Incentives & Programs for First-Time Buyers

Good news! The government offers several programs to help make buying your first home easier. Here are some key incentives:

Home Buyers’ Plan (HBP)

  • Allows you to withdraw up to $60,000 from your RRSP tax-free to use for a down payment.
  • You’ll need to repay this amount within 15 years.

First Home Savings Account (FHSA)

  • A tax-free way to save up to $40,000 for your first home.
  • Contributions are tax-deductible, and withdrawals for a home purchase are tax-free.

First-Time Home Buyers’ Tax Credit (HBTC)

  • A tax credit of $10,000, which translates to up to $1,500 in tax savings.

Land Transfer Tax Rebate

  • Some provinces offer rebates to help cover land transfer tax fees when you buy your first home.

GST/HST Housing Rebate

  • Helps offset taxes paid on new homes or major renovations.

These programs can make a big difference in lowering the upfront costs of buying a home, so it’s worth looking into which ones you qualify for!

Home Financing Essentials for First-Time Buyers

Now let’s talk about money—how much you’ll need and what to expect.

Down Payment Requirements

  • 5% for homes under $500,000.
  • 10% for the portion above $500,000 (for homes between $500K – $1M).
  • 20% for homes over $1M (no mortgage insurance required).

Mortgage Options: Fixed vs. Variable Rates

  • Fixed-Rate Mortgage: Your payments stay the same for the entire term, making it easier to budget.
  • Variable-Rate Mortgage: Your rate (and payments) can change based on market conditions, potentially saving you money but also carrying some risk.

Closing Costs to Budget For

Besides your down payment, you should expect additional expenses, such as:

  • Legal fees
  • Home inspection & appraisal costs
  • Title insurance
  • Land transfer taxes (some rebates available!)

Your Credit Score Matters

A good credit score (660+ recommended) helps you get better mortgage rates. If your score is lower, consider improving it by:

  • Paying bills on time
  • Reducing credit card balances
  • Avoiding unnecessary credit inquiries

Key Takeaways for First-Time Homebuyers in Canada

  • Check if you qualify for first-time homebuyer status based on federal and provincial rules.
  • Use government programs to reduce costs and make homeownership more affordable.
  • Plan your finances, including down payments, closing costs, and mortgage options.
  • Work with a real estate agent & mortgage expert to navigate the process smoothly.

FAQ: Self-Employed Mortgages & First-Time Homebuyers

Can self-employed buyers get a mortgage?

Yes! If you’re self-employed, lenders will look at your income history, tax returns, and business financials to determine eligibility.

Do self-employed homebuyers need a larger down payment?

Not necessarily, but if your income is harder to verify, some lenders may require a higher down payment (e.g., 10%–35%).

Can self-employed buyers qualify for first-time homebuyer programs?

Yes! As long as you meet the standard first-time homebuyer requirements, you can still qualify for programs like HBP and FHSA.

About Avaljit Sandhu – Mortgage by Aval Sandhu

Avaljit Sandhu is a trusted mortgage expert in Canada, helping first-time homebuyers secure the best financing options. Whether you’re employed, self-employed, or new to the country, Avaljit works to find personalized mortgage solutions that fit your needs.

📞 Need mortgage advice? Contact Avaljit Sandhu today!                                                                     

Final Thoughts

Buying your first home in Canada doesn’t have to be stressful! With the right knowledge, planning, and support, you can confidently make your dream of homeownership a reality. Be sure to check out all the available incentives, mortgage options, and expert guidance to make the best decision for your future home. 🚀🏡

 

14 Feb

Mortgage Rate Trends in Canada for 2025: Predictions, Housing Market, and What Borrowers Should Expect

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Posted by: Avaljit Sandhu

Mortgage Rate Trends in Canada for 2025: Predictions, Housing Market, and What Borrowers Should Expect

Bank of Canada Rate Cuts & Predictions

The Bank of Canada (BoC) has started cutting rates in 2024 after reaching a 23-year high of 5.0%. By January 29, 2025, the BoC made another cut of 0.25%, bringing the policy rate down to 3.0%. This has led to most bank prime rates dropping from 5.45% to 5.20%.

Experts predict further rate cuts in 2025, but how quickly and how much depends on inflation, job growth, and potential economic disruptions, particularly from the U.S..

Impact of U.S. Tariffs on Canadian Mortgage Rates

A major concern for Canadian interest rates is the looming 25% tariffs on Canadian goods that the U.S. government has threatened to impose. If these tariffs become reality, it could cause “cost-push inflation,” which means businesses would raise prices due to higher import costs.

To counteract the economic damage from tariffs, the BoC may need to cut rates aggressively (up to 1.25%) to support economic growth.

Housing Market & Mortgage Trends in 2025

  • Canadian housing sales slowed in late 2024 but remain 19% higher than the previous year.
  • Lower mortgage rates could trigger a spring home-buying surge, though buyers may still hesitate if economic uncertainty lingers.
  • Fixed mortgage rates are expected to stabilize in the high 3% range by the end of 2025.

Overall, the market is showing mixed signals. While lower interest rates typically make homeownership more affordable, global economic factors (especially tariffs) could create new challenges.

BoC’s March 2025 Decision: Cut or Pause?

  • According to mortgagelogic.news, there is a 54% chance of another rate cut on March 12, 2025.
  • If tariffs are confirmed, rate cuts are more likely.
  • If inflation rises unexpectedly, the BoC may pause rate cuts to prevent further economic overheating.

The BoC’s primary goal is to balance inflation control while supporting economic growth. Its decision in March 2025 will be critical in setting the course for the remainder of the year.

Key Economic Indicators to Watch

  1. Inflation Rate – December 2024’s headline inflation fell to 1.8%, but core inflation rose to 3.5%.
  2. Employment Data – Canada added 76,000 new jobs in January 2025, lowering the unemployment rate to 6.6%.
  3. GDP Growth – November GDP shrank by 0.2%, but slight economic recovery is expected in early 2025.

These indicators will play a huge role in determining the direction of interest rates in 2025.

Interest Rate Forecast for 2025

  • Without tariffs: The BoC rate could drop to 2.5% by year-end.
  • With tariffs: The BoC may need to cut rates further (possibly down to 1.5%) to avoid a recession.
  • Variable mortgage rates will continue to drop as BoC cuts rates.
  • Fixed mortgage rates may stabilize with slight declines, depending on economic conditions.

Borrowers should stay updated on economic trends and prepare accordingly for their mortgage decisions.

Advice for Homebuyers & Borrowers

  • Fixed vs. Variable Rates:
    • Variable rates could offer savings if BoC continues to cut rates.
    • Fixed rates provide stability for those who prefer predictable payments.
  • Lock in rates now: A rate hold can protect against short-term fluctuations.
  • Monitor U.S. trade policies: If tariffs are implemented, BoC may cut rates faster to support the economy.

Final Takeaway

Mortgage rates in Canada are on a downward trend, but U.S. policies, inflation, and employment growth will determine how quickly and how much rates decline in 2025. Borrowers should stay informed and consider their mortgage options carefully. 🚀

Frequently Asked Questions (FAQ) About Mortgage Rate Trends in Canada for 2025

1. Will mortgage rates go down in 2025?

Yes, mortgage rates are expected to continue declining, but the pace depends on inflation, employment data, and U.S. economic policies.

2. How will U.S. tariffs impact Canadian mortgage rates?

If the U.S. imposes 25% tariffs on Canadian goods, it could create economic instability and inflation, possibly leading to aggressive BoC rate cuts.

3. Is 2025 a good year to buy a home in Canada?

It could be! Lower mortgage rates make buying more affordable, but buyers should watch market trends and possible economic disruptions before making a decision.

4. Should I choose a fixed or variable mortgage in 2025?

  • Variable mortgages could be better if rates keep falling.
  • Fixed mortgages are safer if you want predictable payments.
  • Speak with a mortgage expert to find the best option for you.

5. When is the next Bank of Canada rate decision?

The next BoC rate announcement is on March 12, 2025. This decision will set the tone for the rest of the year.

About Avaljit Sandhu – Mortgage by Aval Sandhu

I’m Avaljit Sandhu, a mortgage expert helping homebuyers, self-employed individuals, and investors secure the best mortgage rates and financing solutions in Manitoba and Winnipeg. Whether you’re looking for a self-employed mortgage, first-time home loan, or refinancing options, I can guide you through the process with expert advice and competitive rates.

📞 Contact me today for a free consultation!

12 Feb

Self-Employed Mortgages in Manitoba

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Posted by: Avaljit Sandhu

By Avaljit Sandhu – Mortgage by Aval Sandhu

Owning a home in Winnipeg or anywhere in Manitoba is a dream for many, but if you’re self-employed, getting a mortgage can feel like an uphill battle. Unlike salaried employees, proving your income as a business owner, freelancer, or contractor can be a challenge. That’s where self-employed mortgages come in!

As a Winnipeg-based mortgage expert, I help self-employed Manitobans secure home financing that fits their unique income situation. Whether you’re a small business owner, gig worker, or incorporated professional, this guide will help you understand self-employed mortgage options in Manitoba and how to qualify.

What Is a Self-Employed Mortgage?

A self-employed mortgage is designed for individuals in Manitoba who don’t receive a traditional paycheck but earn income through their business, freelancing, or contract work. Since your tax returns may show lower income due to business expenses and deductions, some lenders offer more flexible mortgage options to help you qualify.

Who Qualifies as Self-Employed?

  • Small business owners in Winnipeg & Manitoba
  • Contractors and freelancers (plumbers, electricians, IT professionals, etc.)
  • Gig workers (Uber drivers, delivery workers, online entrepreneurs)
  • Realtors, consultants, and commission-based salespeople
  • Professionals who own incorporated businesses

Pros of Getting a Self-Employed Mortgage in Manitoba

✅ Access to Competitive Rates – With a strong credit score and good financials, you can qualify for the same rates as traditional borrowers.

✅ Higher Mortgage Amounts – Some lenders accept stated income mortgages, allowing you to qualify for more than what your tax return might show.

✅ Flexible Approval Process – Many alternative lenders in Winnipeg and Manitoba offer mortgage approvals faster than traditional banks.

✅ Tax Benefits – Self-employed individuals can still write off business expenses while qualifying for a mortgage.

Cons of Getting a Self-Employed Mortgage

🚨 Not All Banks Offer Self-Employed Mortgages – The big banks (TD, RBC, BMO, etc.) have strict lending rules and may not approve self-employed applicants with fluctuating income.

🚨 Higher Interest Rates – If your income is harder to verify, lenders may charge higher rates due to the added risk.

🚨 More Paperwork – You may need to provide bank statements, tax documents, and business records to prove your income.

Types of Lenders That Offer Self-Employed Mortgages in Winnipeg & Manitoba

1. “A” Lenders (Major Banks)

Includes RBC, TD, Scotiabank, BMO, CIBC, and National Bank. These banks have strict mortgage rules and require 2- years of tax returns and financial statements.

2. “B” Lenders (Alternative Lenders)

Lenders like Equitable Bank, Home Trust, and MCAP offer more flexible self-employed mortgage options but may charge slightly higher rates.

3. Private Lenders

If you have low income on paper, poor credit, or need fast approval, private lenders may offer financing. However, interest rates are much higher (7%-18%), so this is a last resort option.

Different Mortgage Types for Self-Employed in Manitoba

1. Stated Income Mortgages

  • Requires 20% down payment
  • No income verification required
  • Higher rates due to risk

2. Insured Stated Income Mortgages

  • Requires at least 5% down
  • Must have good credit and mortgage insurance
  • Lower interest rates than private lending

3. Sagen’s Business for Self (Alt. A) Program

  • Ideal for Manitobans with 2+ years in business
  • Requires proof of business registration & financial stability
  • Not available for rental properties

Self-Employed Mortgage Qualifications in Winnipeg & Manitoba

1. Income Verification

  • Traditional: Use tax returns (T1 General, NOA)
  • Non-Traditional: Use bank statements & financial records
  • Stated Income: No proof of income needed, but higher down payment required

2. Minimum Down Payment

  • 5% down for insured mortgages
  • 20% down for stated income mortgages

3. Required Documents

  • Business registration number
  • GST/HST account number
  • Notice of Assessment (past 2-years)
  • Bank statements to show cash flow

CMHC Self-Employed Mortgage Insurance

The Canada Mortgage and Housing Corporation (CMHC) offers mortgage insurance for self-employed borrowers in Manitoba who can verify their income.

✅ Loan-to-Value (LTV): Up to 95% financing
✅ Minimum Credit Score: 650
✅ Amortization Period: Up to 25 years

This program is not available for stated income mortgages—you must verify your income.

Features of Sagen’s Alt. A Program for Self-Employed Manitobans

Sagen’s Business for Self (Alt. A) Program is one of the best self-employed mortgage options in Winnipeg & Manitoba:

  • Available for purchases & refinances
  • Can finance up to 90% of the property value
  • Requires at least 2 years in business
  • Must show proof of income & business operation

Self-Employed Mortgage FAQs for Manitobans

1. Can I get a mortgage if I just started my business?

Most lenders require 2 years of self-employment. However, alternative lenders may consider newer businesses with strong bank statements.

2. Do I need a higher down payment as a self-employed borrower?

It depends. Traditional lenders require 5-10% down, but a stated income mortgage may need 20% down.

3. Can I use my business income to qualify?

Yes! Lenders will look at bank statements, business revenue, and financial records to determine how much you can borrow.

4. What if my credit score is low?

If your credit score is below 600, you may need a B lender or private lender, but expect higher rates.

Mortgage Solutions Designed for Self-Employed Manitobans

If you’re self-employed in Winnipeg or anywhere in Manitoba, securing a mortgage doesn’t have to be stressful. I specialize in helping business owners, freelancers, and gig workers find the best mortgage options at affordable rates.

💡 Need help with a self-employed mortgage in Manitoba? Contact me today, and let’s get you into your dream home!

📞 Avaljit Sandhu
📧 avaljit@mortgagebyaval.ca