IMMIGRATION & Mortgage
10
The Notary
Corner
By Editha Corrales Nelson
Immigration Consultant, Notary
Public, Mediation / Arbitrator
Buying a home does not have
to be painful. It is a very important
and eventful time in life to finally own
a home and to start investing in the
future. Having someone you can
trust assist you in this time will make
it even better in the long run.
Once your home has been
selected and your mortgage has been
approved, you should shop around for
a reliable Notary Public who can assist
you in ensuring that your new home is
yours legally. Your local Notary Public
can make it as painless as possible.
She can explain all of the requirements
and she can do all the work for you.
You merely will need to see her once
to finalize the documents and on the
closing date, your home is yours.
In this day and age, many new
homeowners would like the special
touches and the personal service in
order that the new homeowner would
be able to participate in every aspect
of their new venture. The Notary
Public will be able to discuss many
aspects the new homeowner would
require to know:
Are you a first time
1.
home buyer? You would be exempt
from many fees that normally would
be due from home buyers.
The benefits of using
2.
your RRSP as a new home buyer.
Is the home new or
3.
used? This would affect the GST
imposed on the home.
Are you a Canadian
4.
Citizen or Permanent Resident?
Real Estate
MYLENE LIM
Licensed Mortgage Specialist
There are endless reasons why
a relationship - be it a legal marriage
or a common law partnership - fail.
While no one ever wants this to
happen, sometimes it is inevitable.
With the break-up comes a lot of
negotiating and settling of affairs. But
one of the factors that would need to
be immediately addressed is the home
mortgage if there is one involved.
In this scenario, how do lenders
view the mortgage when the personal
relationship between parties break?
Lenders always take their cue from
the agreement between the parties
involved. If the couple decides to sell
off the property, then the lender will get
paid in full from the proceeds of the
sale. However, in the option wherein
one of the spouse/partner would get
full ownership of the property, there
are some technicalities involved in
transferring or removing the other
spouse/partner from the mortgage.
Most lenders consider the transfer of
property ownership as a sale rather
than a refinance. What this means is
that the existing mortgage would have
to be paid out or one partner would
have to assume the mortgage. In
PHILIPPINE ASIAN NEWS TODAY February 1 - 15, 2019
Buying or Selling a Home
The painless truth and consequence
Again, this would have implications
on further fees imposed by the
government.
Are you buying or
5.
transferring the property from a
relative? This would affect any taxes
imposed.
Are the home buyers
6.
going to be acquiring the property as
joint tenants or tenants in common?
Are the home buyers
7.
obtaining a mortgage? or a second?
Is this a strata property?
8.
There are other fees involved and
imposed by the strata corporation.
There may be some terms you
may not be familiar with and some of
these are defined below which I have
compiled from real estate magazines,
mortgage clauses, etc. These may be
helpful for some of you who wish to
start shopping for their first home or
second or third:
Realtors:
Real
estate
professionals licensed by the Real
Estate Council of B. C. who are
members of the various Real Estate
Boards and the British Columbia and
Canadian Real Estate Associations.
Only these professionals can call
themselves REALTORS.
Variable rate mortgage:
A
mortgage for which payments are
fixed, but whose interest rate changes
in relationship to fluctuating market
interest rate. If mortgage rates go
down, a larger portion of the payment
is applied to the principal.
Statements of Adjustment:
Closing statements in a real estate
transaction which set out the sources
of funds which make up the purchase
price, adjustment to and from the
purchase price, the final amount
required from the purchaser and the
amount due to the seller.
Principal:
The mortgage
amount initially borrowed or the
portion still owing on the mortgage.
Interest is calculated on the principal
amount.
Land Transfer Tax: Payment
to the provincial government for
transferring property from the seller
to the buyer.
Mortgage
Insurance:
Government-backed
or
private-
backed insurance protecting the
lender against the borrower’s default
on high-ratio (and other type of)
mortgages.
Assessed Value: The value of a
property, set by the B.C. Assessment
Authority, and used by the local
municipality for the purposes of
calculating property tax.
High-Ratio Mortgage:
A
mortgage that exceeds 75 per cent
of the loan-to-value ratio; must be
insured by either the Canada Mortgage
and Housing corporation (CHMC)
or a private insurer to protect the
lender against default by the borrower
who has less equity invested in the
property.
Adjustment Date: The day
from which all calculations of interest,
tax adjustment, utility bill adjustment
(if applicable) are made to the credit
of either the buyer or the seller. This
is usually (but not always) the same as
the possession date.
Appraised Value: An estimate
of a property’s market value, used by
lenders in determining the amount of
the mortgage.
Appreciation: The increase in
a property’s value over time.
Rights of Way: Are indicated on
title at the Land Title Office; often for
use of utilities or city or municipality
in order to make repairs to pipes, etc.;
no permanent structure may be built
on a right of way.
Mortgage Prepayment Penalty:
Is a feed paid by the borrower to the
lender in exchange for being permitted
to break a contract (a mortgage
agreement); usually three months’
interest, but it can be higher or it can
be he equivalent of the loss of interest
to the lender.
Conventional Mortgage: A first
mortgage issued for up to 75 per cent
of the property’s appraised value or
purchase price, whichever is lower.
Condominium
Common
Property, or Common Elements:
The portions of a condominium
development owned in common
(shard) by the unit owners, e.g.: pool
exercise room, lobby, etc. A strata fee
is charged to every unit owner for the
use of the common property. •
Having an experienced and
reliable Notary Public can assist you
in acquiring your home in the best
possible and informative and legal
way bearing in mind the taxes or costs
implications.
What Happens To Your Mortgage
When You Get Divorced?
most cases, one partner will buy-out
the ownership share of the property
from the selling partner and in so
doing take out the selling partner from
the mortgage commitment as well as
in the property land title.
The advantage in the way the
change of ownership is viewed by the
lender in the breakup of mortgage
due to a divorce or a separation is
in the loanable amount available to
the buying partner. Whereas in other
refinance situations the maximum
amount a lender will finance is 80%
of the property value, in a divorce or
separation, the maximum amount
is 95%. Therefore theoretically, the
buying partner would have access to
95% of the property value to pay out
the share of the selling partner and
hopefully have some extra funds left
to take care of other expenses and
obligations. The refinance approval
is of course, subject to the buying
partner being able to qualify for the
new mortgage on his/her own.
As is most cases, when ironing
out the terms of the divorce (or
dissolution of the relationship), the
parties would have to consider child
and spousal support (if any). Lender
will take these into consideration when
determining the mortgage amount
the buying partner could qualify for.
A portion of this extra money may be
considered by a lender as an added
income for the recipient of the support
but would generally be deducted in
full as a liability from the giver of the
support. As well, lenders will generally
tend to look at other joint debts and
liabilities of the couple as obligations
by both parties with no distinction
as to which debt belongs to which
partner.
When ironing out the terms
of the divorce (or dissolution of
the relationship), the parties would
have to consider child and spousal
support (if any). For many lenders,
they will determine what mortgage
amount the “buyer” could qualify for
when child and spousal support are
factored in along with the income.
Ideally, one way around child support
is joint custody where it is shared
50/50 and no liability is imposed on
either partner, therefore allowing both
parties to maximize their purchasing
capabilities as they move on with their
lives.
It is imperative that you have
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all these separation agreements to
be legally recorded. Legal separation
documents tell the lenders what
you and your ex’s responsibilities
are in a divorce or separation.
Although some lenders would allow a
statutory declaration citing what your
responsibilities are (especially in cases
of common law separations), most
would be more comfortable where
official legalities are observed when
qualifying you for a mortgage.
Please feel free to contact me if
you have questions or if I could be of
assistance to you.
Cel: 604 783 9097/ Email:
[email protected]/ Web:
www.MyleneLim.ca/ FB: Mylene Lim