Tag Archives: female home owners

Home insurance basics

Getting ready to buy your own home? There are a lot of boxes new homeowners have to tick off, and one of the most confusing can be insurance. Certain types of insurance are mandatory and others are optional…. but highly advisable. Here are 5 types of insurance the experts want every homeowner to have.

HOME INSURANCE

While not legally required, it’s nearly impossible to get a mortgage without proof of home insurance. But why would you want to leave your biggest investment unprotected? Home insurance covers the rebuilding or replacement value of your house, detached structures such as a garage, your contents, plus personal liability if anyone gets hurt on your property.

Be sure to read the fine print and find a plan that works for you. Standard policies may not include things like earthquakes, termite damage, or certain types of flooding. If these are relevant to you, look into additional coverage.

The cost: Varies depending on coverage, home value and additional factors

CONDO INSURANCE

Many condo owners think their condo corporation’s commercial condo insurance covers their unit, too. This is not the case. It is limited to common areas like the building structure, its exterior and shared spaces like the lobby or elevators. You’ll need a personal condo policy to protect your own unit, its upgrades and contents (including those stored in your locker).

Personal condo insurance isn’t legally required, but most mortgage lenders consider it mandatory. You should too, says Steve Totani, a real estate broker with Zolo Realty in Toronto.

Totani provides the example of a small condo building that experienced massive flooding as the result of a plumbing problem. Owners’ homes were ruined as were their belongings. “Once the units were repaired, they each got an empty unit with four dry walls. Property insurance would have brought a condo owner’s unit back to how it was, for example, granite countertops and better appliances. Just relying on the condo’s [building] insurance is a big mistake. Paying $20 or $30 a month extra can save you tens of thousands of dollars in that sort of situation,” explains Totani.

The cost: Varies depending on coverage, condo value and additional factors

TITLE INSURANCE

A property’s title is the legal proof of its ownership. When you buy a home, the owner signs the deed over to you. Title insurance protects you against challenges to your ownership or issues relating to your home’s title, such unpaid liens, encroachment issues, fraud, and other issues that could prevent you from selling, leasing or mortgaging your property. (You can read more details here.)

Toronto real estate lawyer Bob Aron writes that “most real estate lawyers today regard title insurance as a critical component of the [real estate] transaction and will usually not close a purchase without it.” Likewise, most lenders make it a requirement for financing.

The cost: A one-time premium based on the value and location of the property, generally in the $225 to $325 range.

MORTGAGE DEFAULT INSURANCE

Mortgage default insurance (also known as “mortgage insurance”) is mandatory on all high ratio mortgages. Those are mortgages with a down payment of less than 20 percent of a home’s purchase price.

This insurance protects lenders in return for qualifying borrowers with as little as 5 percent down, making it a win for both parties. Without mortgage insurance, homeownership would be impossible without a sizeable down payment.

The cost: Between 2.8% to 4% of the mortgage amount. This can be rolled onto the mortgage so it’s not an out-of-pocket expense.

LIFE INSURANCE

“Life insurance is the type of insurance that’s overlooked the most often” says Totani, the Zolo Realty broker.

“People ask about mortgage rates, property tax, property insurance, and their monthly payments, but I hardly ever hear anyone asking, ‘Should I top up my life insurance policy?’ to ensure their mortgage is paid off and their family is not going to be out of their home,” in the event of a tragedy, says Totani.

Totani advises checking your policy and upgrading it if needed, to reflect your homeownership situation. The peace of mind this provides will be worth the effort. 

The cost: Varies depending on life insurance type, coverage, and personal factors.

Source: by 8Twelve Mortgage

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COVID-19 pandemic: Tips to remain ‘sane and safe’ during social distancing

social-distance.jpg

Photo: Crystal Eye Studio/Shutterstock

Muncie, IN — Maintaining a routine, helping others and taking time to focus on self-care are among the tips one Ball State University professor is sharing to help people stay “sane and safe” while practicing social distancing during the COVID-19 pandemic.

Jagdish Khubchandani, a health sciences professor, has 15 recommendations to “counterbalance” the physical and psychological effects of social distancing, which involves reducing close contact with others in an effort to help stop the spread of the disease, per guidance from the Centers for Disease Control and Prevention.

Khubchandani’s tips:

  • Maintain a routine. As much as possible, social distancing should not disrupt your sleep-wake cycle, working hours and daily activities.
  • Make social distancing a positive by taking time to focus on your personal health, training, diet, physical activity levels and health habits, as well as reassessing your work.
  • Cook for yourself and others in need. Add more fruits, vegetables, vitamins and proteins to your diet. (Most U.S. adults don’t consume enough fruits and vegetables). Eat two or three meals a day.
  • Go for a walk or exercise at home. “Definitely go out in nature as much as possible. Only half of American adults today get enough exercise.”
  • Don’t let anxiety or being at home lead to binge eating or alcohol and drug use. Don’t oversleep, but try to sleep at least seven hours a day.
  • Know that social distancing can cause anxiety and depression because of disruption to routines, isolation and fear over a pandemic. If you or someone you know is experiencing either, help is available.
  • Make the best use of technology to finish your work, attend meetings and engage with co-workers with the same frequency required during active office hours. “The good news: Working from home can make people more productive and happier.”
  • Small breaks during social distancing are also good times to reassess your skills and training – consider taking an online course, pursuing certification, undergoing training or personality development, or learning a new language.
  • Engage in spring cleaning, clear clutter and donate household items. Home clutter can harbor pollutants, lead to infections and result in unhygienic spaces.
  • Social distancing shouldn’t translate to an unhealthy life on social media. Although you can certainly become a victim of myths, misinformation, anxiety and fearmongering, you can also inadvertently become a perpetrator, creating more trouble for communities.
  • Based on the Bureau of Labor Statistics’ American Time Use Survey and leisure-related time-spending patterns worldwide, “too much time” is spent on screens. Except for one to two times a day to watch, read or listen to national news for general consumption and local news for updates on the spread of COVID-19 in your community, you’re likely overconsuming information and taking away time for yourself and from friends and family.
  • Reach out to others and offer help. Social distancing should help reinvest in and recreate social bonds. Consider providing for and helping those at risk or marginalized (e.g., the elderly, disabled and homeless; survivors of natural disasters; and people living in shelters). “You will certainly find someone in the neighborhood who needs some help.” This can be done from a distance via a phone or by online activities, as well as giving.
  • Check your list of contacts on email and your phone. It may be a good time to check on your friends’ and family members’ well-being. This will also help you feel more connected, social, healthier and engaged. “Be kind to all; you never know who is struggling and how you can make a difference.”
  • Engage in alternative activities to keep your mind and body active. For example, listen to music or sing; try dancing or biking, yoga or meditation; take virtual tours of museums and places of interest; sketch or paint; read books or novels; solve puzzles or play board games; try new recipes; and learn about other cultures.
  • Don’t isolate yourself completely – social distancing shouldn’t become social isolation. Don’t be afraid, don’t panic and do keep communicating with others.

“Social distancing can be tough on people and disrupt the social and economic fibers of our society,” Khubchandani said. “Given the existing crisis of isolation in societies — with probably the loneliest young generation that we have today — social distancing can also take a personal health toll on people, causing psychological problems, among many others.”

Source: Safety & Health The Official Magazine – March 18, 2020

 

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Deferred Mortgage Payments: A Credit Score Gamble?

Last week, the President of the Canadian Bankers Association announced that all six major banks would offer deferral payments on their mortgages and other credit products. Just like many public announcements over the last couple of months, many were left with more questions than answers.

One question that still has yet to be answered is, how deferred mortgage payments might affect your credit score? Equifax recently announced, “In the event that a [lender] makes a credit relief or payment deferral program available to its consumers to opt out of making monthly payments during the pandemic, Equifax’s expectation is that the [lender] would take actions on its system to ensure that it does not report any derogatory/missed payment information to the credit bureaus that is misaligned with the program it has implemented.”

millennials in debtScott Hannah, B.C.-based CEO of the non-profit Credit Counselling Society, was quoted in the Globe and Mail as saying, “I don’t see creditors punishing consumers for being as responsible as they can under circumstances beyond their control.”

Many financial professionals have been posting messages online and sending emails to reassure the public and their clients that a deferral payment will not affect their credit score.

I agree that Canadians should not have their credit affected by deferred payments, although I predict a much different reality for consumers starting April 1. Lenders update the payment history of each credit account electronically to Equifax and TransUnion.

In order for these deferred payments to not be reported to the credit reporting agencies as late, as Equifax alluded too, the lender would need to “take actions on its system to ensure that it does not report any derogatory/missed payment information to the credit bureaus.”

Lenders big and small have been bombarded with phone calls that have put pressure on their personal and electronic systems. Are you willing to gamble your credit score and assume that every lender has updated its reporting system?

Millions of Canadians have found errors in their credit reports. For over a decade, I personally have received thousands of calls from consumers stating that a customer service rep told them one thing, only to find out that it was reported incorrect on their credit report.

In reality, it doesn’t matter what the customer service rep, the government, or what the industry experts tell you. If the lender’s internal system sees it as a late payment, that is how it will report. No one will know for sure if all these deferred payments will report correctly or not.

might a mortgage payment deferral affect your credit scoreWe can all agree that the amount of deferred payments over the coming months is unprecedented. For this reason, I expect an increase in the amount of mortgage, loan and credit card payments reporting incorrectly on Canadian credit reports.

Even with the chance that a deferred payment will show up as a late payment, many Canadians will still need to take advantage of such programs being offered by banks.

For those that don’t really need to defer their payments this month, I suggest you wait until it is necessary. A deferred payment is not free money. You will have to pay the lender back with interest.

Any delay is just going to increase the amount on future required payments. My hope is that, going forward, underwriters or those reviewing credit applications will be lenient on any late payments during the COVID-19 pandemic.

However, I am positive that the credit scoring system will not show much sympathy. On average, one late payment will drop your score 20 to 40 points.

A low credit score, regardless if it was caused by an error or not, will make it much more difficult to qualify for best-rate financing, renting, some employment opportunities and discounted insurance premiums. This is not to say your life will be over, but it will take at least 6 to 12 months for your credit to recover.

For those who have no choice but to request a deferred payment, here are some ways to protect your credit.

  1. Request electronic or written confirmation that the payment is being deferred.
  2. Ask for the employee number or service rep’s name that confirmed your deferred payment.
  3. Write down the day and time you talked to the customer service rep.
  4. Place all supporting documentation and record keeping in a safe place where you will actually remember where to find it.
  5. Track both your Equifax and TransUnion credit reports for at least the next few months
  6. If you do see an error, reach out to your lender and the credit reporting agencies to open up a dispute.

mortgage payment relief announcedI’m sure the thought of making another call might be overwhelming for the hundreds of thousands of Canadians who have already spent hours on the phone to request the deferred payment.

For anyone who has something better to do than to spend hours listening to the annoying automated voice and elevator music, I suggest you start with suggestion number three.

I don’t want to create panic or be like Chicken Little saying the sky is falling. The point I sincerely want to get across is that reporting errors are common and always have been.

It is unrealistic to think there won’t be any errors as a result of the increased demand for deferred payments. Regardless of what happens, now is the perfect time to monitor and learn how to better protect your credit.

Source: Mortgage Broker New
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Consumers could face hit to credit scores, jump in payments from mortgage deferrals

‘You’re going to get hiccups in this process; it’s never happened before,’ expert says

Details of RBC’s mortgage deferral program, obtained by CBC News, reveal the option will be available to all mortgage holders but in a way that appears to ensure the bank will not lose money in the short term and may even come out ahead. (David Donnelly/CBC)

Canadians couldn’t get answers on mortgage deferrals at Canada’s biggest bank because information and eligibility requirements kept changing almost by the hour, a source who works for RBC tells CBC News.

When the first details were eventually given out to frontline employees at RBC’s Mississauga call centre, they revealed deferrals would be available to all mortgage holders, but in a way that appears to ensure the bank would not lose money in the short term and may even come out ahead.

“Deferrals actually meant that interest accrued from each deferred payment was being added back into the principal balance of the mortgage,” said the source.

“Technically clients would then be [charged] interest on top of interest for those payments [that were] deferred,” they said.

In effect, it’s as though the bank is loaning you the amount that you would have paid in interest during the deferral period and then charging you interest on that loan as well.

“They’re going to make more money because they’ve just loaned you more,” said Peter Gorham, an actuary with JDM Actuarial Expert Services.

“I don’t know that I want to say it’s profiting. I would say it’s not costing them a penny.” he said.

“People are increasing their debt load. If you are not desperate for the financial relief, don’t take it,” Gorham said, adding RBC and other banks are taking on increased risk from deferrals, a risk that could grow significantly if the COVID-19 crisis runs from months into years.

When it comes to repaying the increased debt load from a deferral, there may be other complications for mortgage holders.

“This also means an increase in clients’ payments at their next renewal period due to the increase in mortgage balance,” the source at RBC said.

RBC frontline employees at one of the Bank’s call centres were overwhelmed with calls and had no information to provide customers, a source tells CBC News. (Michael Wilson/CBC)

If the client doesn’t want a bigger payment, they can extend the amortization period, the source added. But that typically requires a full credit application which may affect their credit score.

The other option is making extra payments after the deferral period ends to bring the mortgage back down as quickly as possible to its original amount.

Two other big banks have mortgage deferral polices similar to RBC’s.

In an updated set of deferral FAQs posted on its website, Scotiabank too says interest will continue to accrue.

“You will pay more interest over the life of your mortgage, but a deferral will also help you with your short-term cash flow,” the banks states on its website. Scotiabank is also offering deferrals on personal and auto loans, lines of credit, and credit cards.

On its website, BMO also states interest will continue to accrue on mortgages.

The Canadian Bankers Association issued a statement late Sunday night saying, “Customers should understand that [a deferral] is not mortgage forgiveness. Mortgage deferral means that payments are skipped for a defined period of time, during which interest which would otherwise be part of the deferred payments is added to the outstanding balance of the mortgage.”

Credit card deferrals

RBC is also offering six-month deferrals on credit card payments, according to an email obtained by CBC News. But once that period ends the minimum payment would include all accrued interest from the deferred payments. Meaning the minimum payment could jump significantly.

A section of an email obtained by CBC News which was sent to RBC employees with instructions of how to respond to customers seeking a deferral on credit card payments. The email was sent on March 18 at 1:16pm EDT. (Obtained by CBC News)

Most minimum payments on credit cards are interest plus $10. But Quebec passed a law in 2017 changing minimum payment requirements in an effort to counter rising household debt by making people pay off more than just accumulated interest.

Minimum payment on credit cards in Quebec is 2.5 per cent of the balance owing and will eventually rise to five per cent.

Confusion

Last week, all of Canada’s big banks agreed to a request from Federal Finance Minister Bill Morneau to defer mortgage payments for up to six months for people suffering financially due to COVID-19.

The banks issued a joint statement saying they “have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; child-care disruption due to school closures; or those facing illness from COVID-19.”

 

But initially many Canadians looking for deferrals said, after waiting for hours on hold, they were told they didn’t qualify. One BMO customer — who is actually a former BMO branch manager — said he was told he needed a full credit check and credit application and even then the bank would not tell him their criteria for approval.

It turns out the person he spoke with may not have known the criteria themselves at that point.

By midday Wednesday, workers at RBC’s Mississauga call centre still hadn’t been informed.

WATCH | Consumer frustrated at lack of information about mortgage deferrals

Watch

Confusion surrounds COVID-19 mortgage deferrals

Many Canadians looking for relief from mortgage payments during the COVID-19 pandemic are met with a confusing process. 2:00

“Anyone calling in to RBC between 8 a.m. and noon was directed to call back ‘later’ as we had been given no direction or timeframe as to when relief procedures would be implemented, other than ‘soon,'” a source told CBC News.

On March 13, the finance minister said that he had already spoken with the CEOs of the big banks. The banks issued their statement promising to work with Canadians on a case by case basis on the evening of March 17, around 7 p.m. ET.

Canadians began calling their banks the morning of March 18.

But, as late as March 20, Canadians were still being told no information was available.

“I was on hold for 11 hours [March 19] and then five hours [March 20],” said Lindsay Gillespie, who has a mortgage and a line of credit with FirstLine Mortgages, a division of CIBC.

Canada’s Minister of Finance Bill Morneau at a news conference in Ottawa, Ontario, Canada March 13, the day he told reporters he had spoken with the CEOs of Canada’s big banks. (Blair Gable/Reuters)

“I finally got through and was told there’s nothing that can be done right now, they don’t have anything set up. I was told to call back another time,” she said.

Also as late as March 20, some RBC customers were still being told they didn’t qualify for a six-month deferral.

“We called RBC and were told that deferrals are being assessed on a case-by-case basis and that our eligibility for a deferral is limited to six weeks,” said Jeff Hecker, a principal at a Toronto Marketing research firm.

“No explanation was provided,” he said.

In a statement issued Sunday evening, RBC said “the developments around COVID-19 are moving quickly and we understand that clients have questions. Our frontline employees are doing incredible work to respond to clients quickly and effectively, and we are staying close to them to ensure they have the information they need to support clients.”

Hiccups

Some in the mortgage industry say the confusion over deferrals is understandable, given the unprecedented and rapidly changing nature of the COVID-19 crisis.

“You’re going to get hiccups in this process; it’s never happened before,” said Robert McLister, mortgage expert and founder of RateSpy.com.

 

“It’s case-by-case, it’s completely at the lender’s discretion as far as I understand it. Even though the big banks have agreed with the federal government to offer these programs, there’s no mandatory federal guidelines that I’m aware of,” he said.

McLister says it’s possible some people are being declined mortgage deferrals because they can’t prove their income has dropped.

“But generally speaking if you are in legitimate need and you’re about to default on a mortgage payment the lender is going to work with you,” he said.

Source: CBC.ca – Aaron Saltzman – March 22, 2020

Senior Reporter, Consumer Affairs

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Frustrated Canadians looking for mortgage deferrals from big banks facing delays, denials

Mortgage holders say the process, criteria are unclear

With some people out of work during the COVID-19 outbreak, many are waiting for clear answers from their banks to see if they qualify for mortgage payment deferrals. (CBC)

Some Canadians looking to defer mortgage payments due to COVID-19 say they are facing delays, confusion and outright denials from the country’s big banks.

“My wife called the 1-800 number for Bank of Montreal, talked to an adviser on the line to see what we are eligible for,” said Evan McFatridge of Dartmouth, N.S., whose family is down to a single income because his wife has been laid off from her job at a restaurant.

“She was told that our mortgage was too new to qualify for a deferral,” he said.

As part of the government’s pledge to help Canadians suffering financially due to COVID-19, Finance Minister Bill Morneau asked the heads of Canada’s big banks to allow people to defer mortgage payments for up to six months.

The banks responded by issuing a statement saying they “have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; child-care disruption due to school closures; or those facing illness from COVID-19.”

Evan and Janna McFatridge of Dartmouth, N.S., were told their mortgage was too new to qualify for a deferral. (Evan McFatridge)

But some Canadians looking for relief from mortgage payments say they’re encountering a confusing, opaque and seemingly arbitrary process that is only adding to the stress of illness, isolation and lost income.

“I called in yesterday, spent two hours on the phone, and they required a full credit check and credit application in order to even see if I was qualified [for a deferral] and then didn’t even give me a time frame,” said one former BMO branch manager.

CBC has agreed to keep his name confidential because of his concerns that his comments could jeopardize his current employment situation.

“So, they had to speak to both me and my wife over the phone, get all our income, our jobs, our assets, our liabilities, said they had to send it to the credit department for review and that someone would contact us,” he said.

“They had no criteria for what they’re looking for. If they said to me, ‘One of you has to be laid off. One of you has to be in isolation. You have to sign a disclosure statement.’ Fine.”

The man’s wife is on reduced hours at home because she has to care for their kids, whose schools have been shut. Facing the loss of a large chunk of their family income, he said ,he wanted to get ahead of the problem and defer two or three months of payments.

When a BMO mortgage holder — who is actually a former BMO manager — called BMO to see if he could get a mortgage payment deferral, he was told it required a full credit check and credit application in order to even see if he qualified. (Jonathan Hayward/The Canadian Press)

“Even if I had to pay the interest payments during that time and they deferred the principal amount so the balance stayed the same, so be it, that’s fine,” he said.

“I’ve been through things in Alberta like the Fort McMurray fires where basically [all that was required then] was a call in to defer payments.”

Questions for banks unanswered

CBC News asked each of the big five banks for more information on the criteria for the case-by-case-based decisions on mortgage and credit deferrals.

We asked:

  • Who would qualify?
  • Is there an application process?
  • Does the entire household have to be off work?
  • Will they require documentation?

None of the banks answered any of those questions.

TD, CIBC and Scotiabank all responded by repeating their commitment to work with personal and small-business banking customers on a case-by-case basis. Each encouraged customers to contact their call centres directly or visit their websites.

BMO and RBC did not respond to emails from CBC News.

‘My family will run out of money’

RBC customer Elsie Mamaradlo of Edmonton said she was also denied a deferral because her mortgage was too new.

“I got so frustrated and at the same time worried,” said Mamaradlo, who lost her job when the public recreation centre she works at was shut down due to coronavirus concerns.

Mamaradlo said that without the mortgage deferral, she faces a grim future.

“My family will run out of money for food and essentials,” she said.

Mamaradlo’s mortgage is insured with the Canada Mortgage and Housing Corporation (CMHC). The government is purchasing up to $50 billion of insured mortgage pools through the CMHC, which says that stable funding for the banks and mortgage lenders is meant to ensure continued lending to Canadian consumers.

Minister of Finance Bill Morneau speaks during a press conference on economic support for Canadians impacted by COVID-19, at West Block on Parliament Hill in Ottawa, on Wednesday. The federal government is rolling out $27 billion in new spending and $55 billion in credit to help families and businesses. (Justin Tang/The Canadian Press)

In a tweet, CMHC said it “will support lenders in allowing deferral of mortgage payments for up to six months for those impacted [by the coronavirus].”

Alyson Whittle of Cochrane, Alta., said her bank, B2B, which is a subsidiary of Laurentian Bank, told her she could defer her next mortgage payment but then the following payment would be double.

“I was super frustrated,” she said.

Whittle, who works in sales for a home builder, and her husband, a utilities driller, are both out of work.

“My mom came to visit us and she had just come back from Las Vegas and developed a respiratory illness,” she said.

After that visit, Whittle says both she and her husband started feeling similar symptoms. They’re now both off work in isolation but haven’t been tested yet.

Laurentian Financial Group’s assistant vice-president of communications, Hélène Soulard, said it’s possible Whittle called before they were able to inform their call centre representatives about the deferral options.

“Rest assured we are committed to helping our customers who are facing hardships if they are not able to work due to illness, job loss or other reasons related to the COVID-19 crisis,” she said.

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COVID-19 could spur a rash of consumer insolvencies in Canada

COVID-19 could spur a rash of consumer insolvencies in Canada 

 

Canada’s insolvency rate will spike up should the ongoing coronavirus outbreak persist, according to Scott Terrio, manager of consumer insolvency at Hoyes, Michalos & Associates.

In Ontario alone, consumer insolvencies swelled by 17.5% on a year-over-year basis last January. This came in the wake of a year that had the second-highest number of annual consumer insolvency filings ever in Canada.

Terrio warned that this figure will noticeably increase in the very near future.

“I think 20% estimates will be drastically low if this drags on for months,” he said in an interview with BNN Bloomberg. “This [virus impact] is now drastically out of control.”

Declared as a pandemic by the World Health Organization last March 11, the COVID-19 virus has ground global markets to a standstill, with economies currently on freefall.

As of press time, more than 225,000 cases have been reported in over 150 nations. Jobs markets have suffered as governments worldwide mandated various restrictions, including social distancing and work stoppages.

The possibility of lower, or even zero, income has especially dire implications upon Canadian tenants, Terrio stated.

“Renters who lose their jobs are going to be in big trouble [in major centres]” he explained. “This is going to lead to huge increases in insolvencies, it’s just a matter of when.”

“I’m hoping [the government is] aiming more funds at people who don’t own homes. If 93% of people filing insolvencies are renters, there better be support for renters,” Terrio added.

“Once people lose their jobs and absorb what happened, this is going to be crazy. Could be summer, could be early fall. But I think it will happen within six months, and I think it’s going to be way more than we thought.”

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New York orders 90-day grace period on mortgage payments in response to COVID-19

The state of New York will allow some homeowners to skip their mortgage payments for three months in response to the spread of COVID-19.

On Thursday, the New York Department of Financial Services (DFS) sent a letter to mortgage servicers directing them to provide several relief options in response to the outbreak, including suspending mortgage payments for up to 90 days.

“As the outbreak continues to spread, a growing number of companies have started to warn markets about the adverse impact of COVID-19 on their financial conditions,” DFS said in the letter. “Companies in certain sectors are already laying off employees and taking other drastic actions in response to the crisis which is likely to cause more financial stress on local communities and consumers.”

As a result, DFS said it was issuing guidance to mortgage servicers to “do their part” to alleviate the impact of the outbreak on borrowers who can demonstrate that they cannot make timely payments. DFS has instructed mortgage servicers to support New York borrowers by:

  • Forbearing mortgage payments for 90 days from their due dates
  • Not reporting late payments to credit-rating agencies for 90 days
  • Offering borrowers an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 outbreak do not affect borrowers’ ability to obtain permanent modifications
  • Waiving late fees and any online-payment fees for 90 days
  • Postponing foreclosures and evictions for 90 days
  • Ensuring that borrowers don’t experience a disruption of service in the event the servicer closes its office, including making available other ways to manage their accounts and make account inquiries
  • Proactively reaching out to borrowers through app announcements, text message, email or other means to explain the assistance being offered to borrowers

“The Department believes that reasonable and prudent efforts by your institutions during this outbreak to assist mortgagors under these unusual and extreme circumstances are consistent with safe and sound banking practices as well as in the public interest and not subject to examiner criticism,” DFS said in the letter.

Earlier this week, the Department of Housing and Urban Development and the Federal Housing Finance Agency issued a 60-day moratorium on foreclosures and evictions in response to the COVID-19 outbreak.

Source: Mortgage Professional America – by Ryan Smith20 Mar 2020

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The future of homeownership is female

The future of homeownership is female 

Girl power is growing in the real estate world.

61% of first-time and repeat homebuyers in Canada were female, according to the 2019 Canadian Mortgage and Housing Corporation (CMHC) Mortgage Consumer survey. This is backed up by statistics coming out of the US as well. Single women made up 17% of homebuyers in 2019, according to the National Association of Realtors, while single men accounted for about 9%.

“I’ve definitely seen a shift, with more women showing interest in buying a home. The whole concept of waiting till you’re married to own a home is not as strong as it used to be,” said Rakhee Dhingra, CEO of Mortgage Savvy.

After having a negative experience buying her first home, Dhingra decided to get into the mortgage business herself and created Mortgage Savvy in 2016. Since then, she has been committed to changing the transactional nature of the mortgage process. She is specifically interested in helping the growing number of women homebuyers become more confident in applying for mortgages through different initiatives like hosting homebuyer events and seminars.

“More single women are buying homes and even women in relationships are applying for mortgages as the more-significant income earners. Women are showing up as very strong from a financial standpoint,” she said. On top of that, Dhingra has also noticed in the case of couples going through a divorce, there’s a rising number of women who are buying out their male counterparts so they can stay and own their primary residence.

Not only is she focused on helping women into their dream homes, Dhingra also wants to encourage other female professionals to consider mortgage as a career option. Even though it’s a historically male-dominated industry, she believes her emphasis on building real relationships and the ability to connect with her clients has really been the key to her success. She believes the industry needs more of that.

“I always make an effort to be available if a new professional reaches out for coaching or support. Several women who were part of my team have grown their career and eventually moved on to build their own business, and I really support that,” she said. Dhingra said while she hopes to be a mentor for many young women in the mortgage business, she didn’t really have that opportunity when she was starting out not too long ago.

Dhingra is known by her team and referral sources for calming demeanor and her ability to ease people’s anxiety during the intimidating process of either buying a home for the first time, doing a refinance, consolidating debt or going through a divorce.

“If I can provide concrete information in a digestible manner for clients, and keep them calm through the process, that’s the key. We keep communication timely and detailed, which helps eliminate a lot of the stress,” she added.

In 2019, Dhingra was chosen by CMP as a Women of Influence. The recognition has been incredible positive for her and her business, but what she is most proud of is being able to show her daughter her success.

Dhingra also puts her money where her mouth is. Fifty dollars from ever transaction at Mortgage Savvy goes toward supporting local causes in Toronto, including the Red Door Family Shelter which assists families, refugees and women who are fleeing violence.

In the future, Dhingra hopes to help promote a stronger balance in the mortgage industry by bringing more women in.

“There needs to be more opportunity for collaboration and networking for not just women, but the industry as a whole. There needs to be a safe place for people to share information and knowledge without being seen as competition or a threat.”

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7-Step Process for Finding Great Contractors for Home Renovations

To be blunt, most contractors are terrible. As a landlord, I deal with it all the time. 

They don’t answer their phone. They don’t show up when they said they would. They don’t do what they said they are going to do.

But there ARE gems to be found in the rubble. The problem is most people have no idea how to identify that great contractor from all the bad ones out there—until long AFTER they’ve already hired one.

I want to share with you my seven-step process to identify a great contractor before hiring them. Whether you’re remodeling your own home, a rental property, flipping houses, or need a contractor for something else, here’s how to land a great one.

How to Find a Great Contractor

  1. Build your contractor list

What I mean by this is you need to get the names and phone numbers of a lot of different contractors in your area. I mean, if we’re searching for a needle in a haystack, we have to first get a haystack.

You can find potential contractors in a number of ways, but my three favorite are: 

  1. Referrals, meaning ask people you know who they have used
  2. Referrals, so yeah, asking people you know who they have used
  3. You guessed it! Referrals.

Human nature is to generally do what you’ve always done. It doesn’t guarantee success, but when you know a contractor has done great work in the past, it’s likely they’ll do it again.

So get in the habit of asking your friends and family often—even when you’re not looking for a contractor. “Who did this work for you?” Then, keep track of those referrals.

There are a few other ways to find contractors, as well. I like to talk to other contractors and ask who they like working with.

Rockstars tend to party with other rockstars, and good tradesmen tend to work with other good tradesmen.

For example, I have a great finish carpenter, so I can ask him, “Hey, do you know any great plumbers?”

You can also build your list by snapping a photo every time you see a contractor sign on the side of a work truck, or by searching Yelp, or by asking the employees in the pro department of your local home store who they like.

Related: The Ultimate Guide to Finding an Incredible Contractor

  1. Pre-screening on the phone and in person

Just as with tenants, our opinion of the contractor begins the moment we start talking with them, whether over email, phone, or in person.

Do they carry themselves professionally? Do they respond well to questions?

Ask them some general questions, such as:

  • How long have you been in this line of work?
  • What skill would you say you are the best at?
  • What job tasks do you hate doing?
  • In what cities do you typically work?
  • How many employees work for you? (Or “work in your company” if you are not talking to the boss.)
  • How busy are you?
  • Do you pull permits, or would I need to?
  • If I were to hire you, when could you start knocking out tasks?

Then, set up a time to meet and show them the project, if you have one. Set an appointment and be sure to show up a few minutes early, just to see exactly what time they arrive.

Are they on time? Late? Early? Do they look professional? How do they act?

If everything feels OK after this first meeting, move on to the next step.

man sitting at desk working on a computer

  1. Google them

The first thing we do now when looking for information on a certain contractor is to simply search Google for their name and their company name. This can often unearth any big red flags about the person.

You’ll also want to add your city name and some other keywords to the search, such as “scam” or “rip off” or “court.”

For example, if we wanted to find out more about First Rate Construction Company in Metropolis, we would search things like:

  • First Rate Construction Metropolis
  • First Rate Construction scam
  • First Rate Construction sue
  • First Rate Construction court
  • First Rate Construction evil

These terms can help you discover major complaints about a contractor. But keep in mind, not all complaints are valid. Some people are just crazy.

What this will do, however, is give you direction about what steps to take next.

  1. Ask for references

Next, ask the contractor for references from previous people for whom they have worked. Photos are nice, but names and addresses are better.

Then, do what 90 percent of the population will never do and actually call those references!

You may want to ask the reference several questions, like:

  1. What work did they do?
  2. How fast did they do it?
  3. Did they keep a clean job site?
  4. You are related to [contractor’s name], right? (If they are, they will think you were already privy to that information and will have no problem answering honestly!)
  5. Any problems working with them?
  6. Would you hire them again?
  7. Can I take a look at the finished product? (This could be in person or via pictures.)

These questions will help you understand more about the abilities and history of the contractor. Then, if possible, actually check out the work the contractor did and make sure it looks good.

Another tip recently given to us by J Scott was to ask the contractor to tell you about a recent big job they’ve done. Contractors love to brag about their big jobs, so he or she will likely regale you with the story of how much work they needed to do and how great it looked at the end.

Find out the address, and then go to the city and verify that a permit was pulled for that project. If not, the contractor did all the work without a permit, which is a good indication they are not a contractor you want on your team.

  1. Verify

It’s okay to be trusting, but make sure the contractor is worthy of your trust first! To do this, first verify that they truly do have a license to do whatever work you intend for them to do.

If they are an electrician, make sure they have an electrical license. If they are a plumber, make sure they have a plumbing license. If they are a general contractor, make sure they have a general contractor’s license.

Next, make sure they do actually have the proper insurance and bond. As we mentioned earlier, you could ask them to bring proof, but you can also simply ask the name of their insurance agent and verify it with that agent. Either way, just make sure they have it.

Remember: this protects you.

  1. Hire them for one small task

Before hiring the contractor to do a large project, hire them to do just one small task, preferably under $500 in cost. This will give you a good idea of what kind of work ethic they have and the quality of work that they do.

If the work is done on time and on budget, and if it meets your quality standards, consider hiring them for more tasks.

Even if the contractor has passed through the first several steps of this screening process, 75 percent of them will still likely fail at this step, so don’t settle with just one contractor. Hire multiple contractors for multiple small jobs and see who works out the best.

Related: 14 Killer Questions to Ask Your Contractor

  1. Manage them correctly

Ninety percent of the time, when I have a disastrous situation with a contractor, the blame lies on no one but myself. If I had managed the job correctly, I wouldn’t be caught in the positions I’ve been in.

Here’s an example. I hired a contractor to paint a bedroom. He says $500. I say, “Great.”

He calls me, tells me he’s done, and I send him the $500.

Now, I go check out the property and what do I see? He didn’t paint the ceiling, despite the obvious need for it. And there are a couple paint splatters on the floor that are easy to clean—but now I have to do it.

I call the contractor and he says, “Well, you didn’t say I needed to do the ceiling,” and “No, the floor was perfectly clean when I left. Someone else must have made the drips on the floor.”

Now, you might be saying, “But that’s ridiculous! It’s clearly his fault.”

But it’s my responsibility to manage him correctly. Therefore, when you work with a contractor, always get a detailed scope of work that clearly lays out 100 percent of what is going to be worked on, what’s included, and what isn’t.

Then, never pay anything until you’ve inspected the work. On larger jobs, be sure to spread out payments over the course of the job, so they don’t get too much money up front. You always want them hungry for the next paycheck.

To help with this, I put together a really simple “Contractor Bid Form” over in the BiggerPockets FilePlace—100% free—so you can fill this out every time you work with a contractor. Just go to BiggerPockets.com/bigform.

The Bottom Line

Whether you’re a real estate investor like myself or not, you’re going to need to deal with contractors in the future. By following this seven-step process, you’ll save yourself time, stress, and a lot of money.

Source: BiggerPockets.com by

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The Least Discussed Reason Wannabe Investors Don’t Take Action (& How to Overcome It!)

I’ve never fully understood the obsession with figuring out why other people fail to take action when it comes to real estate investing.

It seems like a lot of people genuinely look for justification not to start.

“If Jimmy didn’t start because he had no money, and I have no money, then I’m justified in not starting yet.”

This is entirely the wrong mentality! Why not focus your energy on figuring out why successful people DID take action?

Regardless, I’m going to tell you the real reason some who are interested in investing never take action. It’s something that isn’t discussed very often.

But first, here are some of the most stereotypical excuses.

Why Some Wannabes Never Take Action: The Typical Responses

Don’t get me wrong. All of these excuses are pretty understandable—yet unfortunate.

Let’s briefly discuss each.

Fear

Fear is a beast. And taking the plunge into real estate isn’t easy.

That being said, everybody experienced the feeling of fear when they bought their first property. It may not have been crippling, but it was there. Anyone who tells you they weren’t at least a little scared is probably not being completely honest with you.

This is why it’s important to make decisions based on numbers and bounce the analysis off experienced investors. Don’t bring your emotions into the deal at all.

Emotions are dangerous—leave them out of investing.

Nervous businessman peeking over desk

Lack of Experience

This excuse drives me nuts!

NOBODY had experience before they took action—you gain experience BY taking action!

If this is your excuse, either quit or work under somebody for free to gain the experience you so crave.

This is a silly excuse to me. Just take action!

No Money

This is an understandable excuse and probably the most common.

I have been investing since 2015. To date, I have never paid more than 6 percent down on a real estate transaction.

Leverage is wonderful. It is risky but wonderful. I house hacked my first duplex for less money than most of my cars have cost.

Theoretically, you could sell your car and buy a house.

You can overcome the “no money” issue by utilizing FHA loans, VA loans (if qualified), seller financing, purchasing subject to the existing mortgage, partnering, other people’s money, hard money lenders, etc.

My point is this: While having no money is scary, if you have knowledge and time, you can invest in real estate!

male showing empty pockets implying moneyless

Not Enough Time

YOU HAVE THE SAME AMOUNT OF TIME AS EVERYONE ELSE!

Set your priorities, and either make REI a priority or find someone with time and provide money/knowledge!

This is a cop-out excuse.

I purchased a property while spending six weeks on a remote island and only having access to the internet through my cell phone a couple of times.

Figure it out.

Why Some Wannabes Never Take Action: The Least Discussed Reason

We have ruled out the most common excuses. And yes, they are just excuses.

Now let’s talk about the least discussed reason some wannabes fail to take action (and how to avoid it).

You’re LAZY!

That’s it.

The number one reason some people fail to take action is the amount of work required.

This excuse is behind the time, fear, and experience excuses. You know it’s going to take a lot of time and energy to make this happen. You’re afraid because it takes a lot of work, and you don’t fully understand what to expect. You don’t have experience because you haven’t done it yet.

In the military, there is a common phrase we use in combat: “Complacency kills.”

Although the meaning is a little different when applied to real estate, the message is the same. It’s not the one morning you sleep in or the one day you get nothing done that hurts you. It’s not the hassle you avoided today or the excuse you used today in order to procrastinate.

However, if you ALWAYS avoid hassle, procrastinate, and sleep in, you will never succeed.

Sloth is one of the seven deadly sins. If you want to succeed as a real estate investor, or in life in general, you need to kill the urge to be complacent—before it kills you!

Related: Getting Started In Any New Real Estate Business

Start Investing NOW: Here’s How

Goals

The first step to conquering the excuse of laziness is to sit down and set goals.

You need to long-, medium-, and short-term goals. These goals should be similar to a five-year plan, yearly goals, monthly goals, and weekly goals.

Think of the cartoons you watched as a kid where a rider would tie a carrot to the end of a long pole and dangle it in front of a stubborn horse/mule in order to motivate them to move forward.

Goals are the carrot you dangle in front of yourself.

No matter how driven you are (or aren’t), there will be days when you lack the motivation to do any work. At these times, it is important to have a carrot (goals) to chase in order to stay on track!

Pensive young entrepreneur looking at laptop screen and drinking coffee at table in cafe

M.I.N.S.

Some of you may have noticed I didn’t say you need daily goals. You may have even been bothered by this and decided to tune out (haha).

The reason I didn’t mention daily goals is that, while they serve a purpose, I prefer to think in terms of the “most important next step.” This is sometimes called M.I.N.S.

M.I.N.S. should be determined every night before you go to sleep. This will ensure you knock out the most important next step toward your weekly goal(s) first thing the next morning.

If you can knock out the most important next step toward your goal every morning, it will snowball into accomplishing your goals quickly!

The key is determining what this step is the night prior, and then doing it first thing the next morning!

Accountability

Most of the actions you take to achieve your goals will not be fun or easy.

It’s easy to find “busy work” to use as a distraction. This busy work is more fun and often easier than accomplishing the most important next step would be.

Since we are all human (I think), it’s safe to assume that you will have days, weeks, months, or even years when you fail to do the difficult task(s) that need to get done.

This is human nature and a hard habit to break. And this is why accountability is crucial to your success as an investor.

You need to find some people who are on the same path as you, as well as a few who are farther down that path, and get together to grow and hold each other accountable!

A common way to do this is through mastermind groups. A mastermind group is comprised of people who have lofty goals for life and are determined to achieve these goals. They meet regularly, whether in person or on conference calls, and talk through their struggles, successes, and so on in order to help each other progress.

These mastermind groups are great for helping you grow and holding you accountable to achieve more!

Mans Hand Reaching For Red Ladder Leading To A Blue Sky

Systems

Real estate investing isn’t easy at first (most things aren’t).

Imagine REI as a large flywheel, and every step you take gets it to move just a little bit faster. As the flywheel speeds up, it takes less and less effort to keep it moving.

This is the power of systems!

Every time you complete a task, remember how you did it. If you complete that task a second time, create a system for streamlining the process. The simpler you can make tasks in real estate, the easier it becomes to buy homes!

For example, one of my favorite systems to date is my Google Drive folder for lenders. Every time I have applied for a loan, I needed to provide the previous two years’ tax returns, W-2s, bank statements, photo IDs, verifiable income, etc.

I created a folder titled “Lender Documents” in Google Drive that has all of this information in it, separated by tax year.

Now, when I apply for a loan, I simply email a link to this folder to my lender and wait for them to tell me if they need any more documentation (which is minimal, if any)!

Talk about streamlining the lending process.

Don’t forget to create systems as you journey down the path of real estate investing. It will make your life so much easier!

Use Laziness to Your Advantage

Lazy people will often find the easiest way to accomplish a task. Use this mentality to succeed as a real estate investor—without losing all of your hair.

Real estate investing isn’t easy, but it is extremely rewarding.

Embrace your laziness, and use the safeguards above to continually attack your goals.

Take the time to put in a lot of work now. You will be happy that you did!

Source: BiggerPockets.com by

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