The Taste of Home – Our House Magazine

Restaurateur and TV personality Vikram Vij on the joy of cooking—slowly—at home

The culinary landscape in North America is amply populated with chefs and personalities putting their spin on a style of cooking designed to get your attention. With the explosion of the foodie culture in recent years, cutting through the clutter would seem a near impossible task. But that’s exactly what a chef with humble beginnings from India has managed to do. Vikram Vij is one of Canada’s most celebrated chefs, ascending the culinary ladder by reaching into his Indian heritage. He opened Vij’s restaurant in Vancouver in 1994 to great acclaim and hasn’t looked back. He’s since opened three Indian restaurants and a fleet of food trucks and become an author and television personality, most notably taking a turn as a Dragon on CBC’s Dragons’ Den. Despite all the success and attention, Vij continues to focus on what he loves to do: cook. During an autumn tour of India, he took time out to speak to Our House magazine about food, fame and his future.

Our House: Where do you call home these days?
Vij: I live in Surrey, B.C., but as an Indian who came to Canada and who loves to travel and get culinary inspiration from around the world, I like to think I’m a global citizen!

I understand you’re in India, can you tell me a little about the purpose of the trip?
Every year I take a trip with some food fans, some of whom have been coming with me for years now, for a Vij’s Culinary Tour. We’ve visited India most often, but we’ve also been to places like Vietnam, Peru and South Africa. I love to experience not only different culinary cultures, but also to re-explore my own roots and to visit different parts of India to see what is being cooked – and how it’s being cooked – and to incorporate those methods into the food in my restaurants. That’s how I stay authentic, and it’s the best way to keep learning and to grow.

Describe how important cooking at home is, not just for yourself but for families and people in general?
I cannot say enough about eating together as a family, and having a home-cooked meal – and I’m a restaurateur! There are stats that show families who make time to eat together each night, who break bread together and talk, have fewer instances of crime, of drug addiction, and of broken homes. Now, that’s easy for me to say – working in the restaurant industry, we were hardly a “sit down for dinner at six o’clock” family. But we made a conscious effort to set aside breakfast time, and an evening each week when we knew we would all be together – and that means no cellphones at the table.

What advice would you give to someone who is afraid of or overwhelmed by the idea of learning how to cook?
I would say just try it. There are so many books out there that will teach you the basics, and if you get it wrong, so what? I don’t use recipes; I put in a few key ingredients that I want to use… then I add more, and then even more until I’m happy with what I’ve cooked. Baking is a science – so it’s hard to go freestyle with that… but cooking is love… and you should experiment and not be put off from trying.

What advice would you give to a young chef thinking about opening his or her own restaurant?
I would say it will be the hardest thing you will ever do. But it will also be the most rewarding. You need three things: the passion to follow your dream of opening a restaurant, an amazing team who will always have your back, and money – ideally lots of it!

Do you cook much at home, or leave it to your restaurants?
I love to cook at home and I love to be in my restaurants seeing other people enjoying their dinner with us. I don’t have my daughters at home to cook for anymore, so I can make what I want. But I like to take my time while I’m cooking. Being in the kitchen is my greatest pleasure, and it’s also my entertainment for the evening, and I don’t want to rush it.

You’ve cooked for celebrities and politicians. Is there someone or a group you haven’t cooked for that you would still like to?
There’s an expression: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” I’d like to teach people how to cook Indian food, and have it added to their repertoire of meals they cook for their family. I’d love to be an ambassador of Indian food in Canada, and I’d like to show as many Canadians as possible to not be daunted by Indian spices and recipes.

Describe your thoughts on the Canadian culinary scene. How do Canadians stack up against the rest of the world?
Canadian cuisine is incredible – and it’s getting better and better. We have the most amazing resources which create the best ingredients. We have fantastic meats and produce from our local farms, we’ve got really great wines, craft beers, gin and vodka, and on the east and west coasts, the seafood is second to none. When you’ve got those world-class resources, then you’re already on the international stage from a culinary perspective.

How does your typical day unfold?
There’s honestly no such thing as a typical day. They are all so different, and it depends on where I am. As much as possible, I get up early and go to yoga, then it’s either meetings and more meetings followed by service at one of the restaurants or, if I’m travelling, I’ll try and eat at someone else’s restaurant to see what they’re up to.

What do you make of the popularity of food shows and channels like the Food Network, and chefs as celebrities?
I think bringing cooking into the mainstream cannot be a bad thing, but I hate the term “celebrity chef,” because our main focus should always be the food, rather than fame. I’ve been involved in many TV shows myself and I’m grateful for the ability to bring an Indian presence there, and to highlight Indian cuisine to a wider audience.

You’ve written books, been on TV shows. Do you see yourself cooking and opening and running more restaurants for the years to come? What does the future hold?
The day I stop cooking is the day I give up on everything! Sure, I’d like to open more restaurants, but I also want to make sure the ones I have are the best they can possibly be and have the attention they deserve. I have two daughters, but I have three other children: Vij’s, Rangoli and My Shanti!

What is the one thing people might not know about you?
I’m known for working the room at my restaurants – but the reason I love to do that is because I originally wanted to be a Bollywood actor. I love to perform and to talk to people and I wanted to be a movie star, but my father said no son of his was going to be an actor, so I became a chef.

Jeremy Deutsch

Lead Writer

Get Ahead of the ‘Rate Train’

A recent article featured on www.mortgagebrokernews.ca brings up some interesting points to consider.
With approximately 47% of mortgages in Canada coming up for renewal in 2018 and in a rising rate climate, it would be wise to consider the impact on our personal mortgage. What will these increases mean for you?
70% of Canadians are in 5-year fixed rate mortgages and the rates these people secured in 2013 are still similar to what is being offered in 2018, so a possible increase in payment that comes along with a slightly higher rate could be quite easy to handle.
However, in 2019 rates will likely be significantly higher than what consumers locked into in 2014. The payment shock could be substantial. Not to mention that increases in the Prime rate will also affect unsecured credit such as lines of credit and credit cards. And the Bank of Canada is certainly in an upward trend with the Prime.
Translation… as rates go up for mortgages and other credit accounts, so do payments.
What can you do? If your mortgage is maturing this year or in 2019, it is highly advisable to contact an experienced Dominion Lending Centres Mortgage Broker to evaluate your position. You will likely have seen a healthy appreciation in value in your home in the past few years, so perhaps it’s time to get ahead of the “rate train” and consider consolidating your unsecured credit with your mortgage and lock in at today’s still low rates before you start to feel the pinch.
The latest rule changes that came into effect January 1, 2018 could also have an impact on your ability to qualify for what you need, so getting a free evaluation will be more valuable than ever.
As always, feel free to contact a mortgage professional for any questions you may have.

Kristin Woolard

Dominion Lending Centres – Accredited Mortgage Professional
Kristin is part of DLC National based in Port Coquitlam, BC.

What is a Property Assessment vs a Home Appraisal?

It’s the time of year when many homeowners are getting their property assessments.

The real estate market is the single biggest influence on market values. Market forces vary from year to year and from property to property. The market value on an assessment notice may differ from that shown on a bank mortgage appraisal or a real estate appraisal because an assessment’s appraisal reflects the value at a different time of the year, while a private appraisal can be done at any time.

Use your Assessment as a starting point for the value of the property your planning your home purchase… Do not rely on a provincial assessment for the exact value of the property you’re considering purchasing. Markets can change quickly both increasing and decreasing in value depending on the area.

What is a Home Appraisal?
An appraisal is a document that gives an estimate of a property’s current fair market value.

Often there is no connection between a provincial assessment and appraised value. This is why lenders want an appraisal – an independent evaluation of the properties value at this moment in time.

Primarily home appraisals are completed at the request of a lender. Lenders want to know the value of a property in the current market before they are willing to lend against the home.

The appraisal is performed by an “appraiser” who is typically an educated, licensed, and heavily regulated third party offering an unbiased valuation of the property in question, trained to render expert opinions concerning property values.

When an appraisal is done, consideration is given to the property, the home, its location, amenities, as well as its physical condition.

Appraisals may also be required when an owner has less than 20% down payment and needs mortgage default insurance.

Who pays for the Home Appraisal?
Typically, the borrower pays the cost of the appraisal, and upon completion, the appraisal goes directly to the lender (does not go into the home buyer’s hands).

I know it sounds odd, but brokerages, lenders and appraisers cannot just show the buyer the appraisal on a property, even though the borrower paid for it.

Think of an appraisal as an administrative fee for finding today’s current value of the property
You need a Home Appraisal since the lender doesn’t want to lend on a poor investment and the appraisal helps the buyer decide if the property is worth what they offered (especially in hot markets like Vancouver & Toronto).

Why don’t you get a copy of the appraisal? The appraiser considers their client to be the lender (the reason the appraisal was ordered). The lender has guidelines for the appraisal, and the appraiser prepares his report according to those parameters.

The lender is free to share the appraisal with the borrower, but the appraiser cannot share it. This is because the lender is the client… NOT the borrower!! It doesn’t matter who pays for the appraisal.

Sometimes an appraisal can come in lower than the purchase price, causing angry calls to the Appraisal Institute of Canada (AIC), and the answer they give is: the Brokerage or Lender is the client of the appraiser, and as such has ownership of the report.

One of the main reasons the buyer pays for the appraisal, is that if the mortgage doesn’t go through, the lender does not want to be on the hook for paying for the appraisal and not getting the business.

Lenders are also aware that home buyers could take the appraisal and shop it around with other Lenders to try and get a better deal.

It is rare for Lenders to share the report. With most appraisal companies, the appraisal is only provided after the closing of the mortgage transaction and must have the lender’s approval.

After the funding of your mortgage, some mortgage brokers will refund the appraisal fee or sometimes the lender may agree to reimburse the cost of the appraisal.

While a lender does not have to release the entire appraisal, there are some pieces of information that remain the personal property of the buyer, and PIPEDA legislation guarantees them access to that. However, any information on the report that does not relate to the property itself (such as the neighboring properties or other data about the community) would come off the report before the lender provided it.

Some other reasons for getting an Appraisal:

• to establish a reasonable price when selling real estate
• to establish the replacement cost (insurance purposes).
• to contest high property taxes.
• to settle a divorce.
• to settle an estate.
• to use as a negotiation tool (in real estate transactions).
• because a government agency requires it.
• lawsuit

Getting your home ready for an Appraisal:
The appraiser report involves a report including pictures of the home and property with the appraiser’s value of the property, along with a short summary of how that information was derived.

9 tips for high value home appraisals

Most lenders have an approved appraiser list which requires appraisers to have the appropriate designation. Lenders tend to reject appraisals that are ordered directly by property owners. Lenders want the appraisal to be ordered by the broker or the lender, primarily to avoid potential interference from the property owner.

Home Appraisal Costs
Appraisal costs do vary. Most home appraisals start around $350 (plus tax) but they can go much higher depending on how expensive the home is, complexity of the appraisal and how easily the appraiser can access comparable data.

Are you thinking of buying a home? As you can tell there is lots to discuss, call a Dominion Lending Centres mortgage professional to have a chat!

Kelly Hudson

Dominion Lending Centres – Accredited Mortgage Professional

How mortgage brokers help you get approved by ‘A’ lenders

Every year Canadian families are caught in unexpected bad circumstances only to find out that in most cases the banks and the credit unions are there to lend you money in the good times, not so much during the bad times.

This is where thousands of families have benefited over the years from the services of a skilled mortgage broker that has access, as I do, to dozens of different lending solutions including trust companies and private lending corporations. These short-term solutions can help a family bridge the gap through business challenges, employment challenges, health challenges, etc.

The key to taking on these sorts of mortgages is always in having a clear exit strategy, which in some cases may be as simple as a sale deferred to the spring market. Most times, the exit strategy involves cleaning up credit challenges, getting consistent income back in place and moving the mortgage debt back to a mainstream lender. Or as we would say in the business an ‘A-lender’.

The challenge for our clients over the last few years has been the constant tinkering with lending.

Guidelines by the federal government and the changes of Jan. 1, 2018 represent far more than just ‘tinkering’.

This next set of changes are significant, and will effectively move the goal posts well out of reach for many clients currently in ‘B’ or private mortgages. Clients who have made strides in improving their credit or increasing their income will find that the new standards taking effect will put that A-lender mortgage just a little bit out of reach as of the New Year.

There is concern that the new rules will create far more problems than they solve, especially when it seems quite clear to all involved that there are no current problems with mortgage repayment to be solved.

Yet these changes are coming our way fast.

Are you expecting to make a move to the A-Side in 2018?

It just might be worth your time to pick up the phone and give your Dominion Lending Centres Mortgage Specialist a call today.

I’m here and I’m ready to help.

Tracy Valko

Dominion Lending Centres – Accredited Mortgage Professional
Tracy is part of DLC Forest City Funding based in London, ON.

Robust Canadian Jobs Report for December Tops Off a Blockbuster Year

The highly anticipated December Labour Force Survey, released this morning by Stats Canada, surpassed forecasts breaking multi-year records. Canada’s jobless rate fell to 5.7% in December, its lowest level in more than 40 years, raising the prospects for a Bank of Canada rate hike possibly as soon as this month. The number of jobs rose by 78,600 bringing the full-year gain to 422,500, the best annual increase since 2002. While most of the jobs in December were part-time, nearly all of the net jobs created in 2017 were in full-time work (+394,000 or +2.7%).

Since September, the country added 193,400 jobs, the largest three-month gain since current records began in 1976. Canadian bond yields and the currency rose sharply in the wake of these data. The loonie surged to over 80.50 cents U.S. According to Bloomberg News, the odds of a rate hike at the Bank of Canada’s next meeting on January 17 soared to 70%, from 40% yesterday, based on trading in the swaps market.

The largest employment gains in December were in Quebec and Alberta. In December, 25,000 more people were employed in finance, insurance, real estate, and rental and leasing, following three months of little change. For the year as a whole, jobs increased by 3.5% in the goods-producing sector and by 2.0% in the services-producing sector.

Actual hours worked in December were 3.1% above year-ago levels, the fastest since 2010. As well, new data show that wages are finally accelerating having been stagnant for much of 2017. Wage gains for permanent employees accelerated to 2.9% year-over-year from 2.7% last month–another closely watched indicator for the Bank of Canada.

U.S. Jobs Report for December Moderates

Also released this morning were December nonfarm payrolls data for the United States. American employers added 148,000 jobs last month as the nation’s unemployment rate remained stable at 4.1%. December’s reported increase was less than the 190,000 expectation. Labour markets are at or very near to full capacity given the persistence of a meagre unemployment rate, which is likely limiting employment gains. December marked the 87th consecutive month of job growth, the longest streak on record and clearly in line with expectations that the Federal Reserve will continue to hike interest rates this year.

Dr. Sherry Cooper

Chief Economist, Dominion Lending Centres

What is a cash back mortgage?

Every once in a while, a bank will advertise a cash back mortgage. It sounds great but there are a few things to consider.
When you purchase a home, you may find that you need some extra cash. You may want to renovate, purchase some furniture, or start on building a fence or landscaping.. Fortunately, some Canadian lenders offer mortgages that give you a cash back rebate when you take out your mortgage.
With a cash back mortgage, your lender advances you a cash lump sum when your mortgage closes. The most common sum you receive is 5% of your mortgage amount, but it’s possible to get between 1% and 5% depending on the lender you choose. Note that you receive these funds when the mortgage closes. The funds cannot be used for your down payment, however if you borrowed your down payment you could use the funds to pay back the loan.
This sounds like a great idea but there are some down sides to this type of mortgage. First- you will pay about 1.5% higher interest rate for the duration of the mortgage term. Usually this is a five-year term and if you take a look at how much extra interest you are paying you will find that it takes you five years to pay this sum back to the lender.
Another point to consider is that Canadians move on average every three years. What if you have to break the mortgage? In that case, you owe the lender the usual three months interest or Interest Rate Differential (IRD) as well as the balance of the cash back balance. This could be a very pricey move. If your lender allows it , it’s best to port your mortgage to your new home to avoid the double hit of the penalty and paying the cash back.
A cash back mortgage is a great option but it’s not for everyone. Be sure to tell your mortgage broker if it’s at all possible that you will have to move before your mortgage term is over so that he or she can advise you on what your penalties would be. If you have any questions, contact your local Dominion Lending Centres mortgage specialist.

David Cooke

Dominion Lending Centres – Accredited Mortgage Professional

CMHC changes will harm, not help, the real estate market

A new program the federal government has announced to subsidize first-time homebuyers isn’t likely to help the market but more likely to harm it.

And not only is it not going to help out the market, but it’s not going to help out new homeowners.

In its recently announced budget, the government is essentially putting the weight of turning around the market on the backs of people just entering the housing market.

Part of the problem with the plan is that we only know what’s happening on the front end. People buying their first home will be eligible for a 5% top up from the from the Canada Mortgage and Housing Corporation (CMHC) to the total cost of a home. That amount increases to 10% for new constructions. To qualify, a household must have a combined income of less than $120,000, and the CMHC will only pick up a maximum of $480,000.

In exchange for this, the housing corporation gets an equity share in your home.

While we know what the government will give new homebuyers, we don’t know what it’s going to cost them down the road. Believe it or not, there’s been no announcement on what interest rates will be offered on the loans, nor what the terms of repayment would be. Complete costing isn’t expected until at least the fall, likely after the federal election.

But the real problem at the heart of this is the measures won’t do anything to help the affordability of homes. It’s not going to decrease the price of housing, and it’s just going to put the burden of propping up the market on the backs of new entrants.

In RBC’s most recent housing affordability report, released in March, the bank said a softer housing market was making houses slightly more affordable, as their national affordability index dropped 0.7 percentage points to 51.9%. (The lower the score, the more affordable homes are.)

“The fourth-quarter relief barely made a dent in Vancouver and Toronto where affordability remains at crisis levels. Owning a home in both of these markets, as well as in Victoria and increasingly Montreal, is a huge stretch for ordinary buyers,” RBC said in a press release.

In Montreal, the bank’s score is 44.5%, and RBC said the situation is not critical just yet.

“Housing affordability is eroding gradually to levels that could potentially pinch buyers—though so far they haven’t shown any sign of balking,” they said.

But with this new CMHC policy, that gradual erosion is likely to turn critical when this new wave of homebuyers crashes into the market.

One of the potential risks with this scenario is called overhang. Essentially, because a new policy has been announced, but hasn’t come into force yet, many Canadians who are likely to qualify are going to decide to put off their purchases. For now, un-bought supply will build up. But as soon as this policy goes into effect, these first-time buyers are going to suck up huge swathes of the housing market, and prices are going to skyrocket.

The new federal program is designed to lower the monthly mortgage payments of new homeowners by what amounts to a few hundred dollars a month. That can make a huge difference in the budget of a young family, but to do this, the government is putting their hands in the pockets of new homeowners for an unspecified amount, while at the same time risking further unaffordability in the housing market.

They could have had the same effect—lowering monthly payments—by re-introducing 30-year amortizations. Instead, they’ve kept the limit for CMHC-insured mortgages set to 25 years.

The shorter amortizations coupled with the continuation of the strict stress-testing rules, covered extensively in recent North East Mortgages blog posts, puts pressure on people on the lower end of the market. The stress test makes sure you can’t just handle the rate you’re signing on for, but makes sure you can handle an additional 2 percentage on top of it.

The rules the government has passed in the last few years have made it more difficult for new buyers and established buyers alike. They’ve also made it hard for people to refinance their more toxic debt, putting them into situations far riskier than the relative rarity of mortgage default.

Adjusting those rules would have a wider effect and give more people the step up they need to enter the housing market.

If the government really wanted to help with the affordability of homes, they have plenty of better options. This narrow measure is going to end up causing more harm than good.

OSFI mortgage changes are coming

As many of you may remember, this past October the Office of the Superintendent of Financial Institutions (OSFI) issued a revision to Guideline B-20 . The changes will go into effect on January 1, 2018 but lenders are expecting to roll this rules out to their consumers between December 7^th – 15^th, and will require conventional mortgage applicants to qualify at the Bank of Canada’s five-year benchmark rate or the customer’s mortgage interest rate +2%, whichever is greater.

OSFI is implementing these changes for all federally regulated financial institutions. What this means is that certain clients looking to purchase a home or refinance their current mortgage could have their borrowing power reduced.

 What to expect

It is expected that the average Canadian’s home purchasing power for any given income bracket will see their borrowing power and/or buying power reduced 15-25%. Here is an example of the impact the new rules will have on buying a home and refinancing a home.

 Purchasing a new home

When purchasing a new home with these new guidelines, borrowing power is also restricted. Using the scenario of a dual income family making a combined annual income of $85,000 the borrowing amount would be:

Refinancing a mortgage

A dual-income family with a combined annual income of $85,000.00. The current value of their home is $700,000. They have a remaining mortgage balance of $415,000 and lenders will refinance to a maximum of 80% LTV. The maximum amount available is: $560,000 minus the existing mortgage gives you $145,000 available in the equity of the home, provided you qualify to borrow it.

In transit purchase/refinance

If you have a current purchase or refinance in motion with a federally regulated institution you can expect something similar to the below. A note, these new guidelines are not being recognized by provincially regulated lenders (i.e credit unions) but are expected to follow these new guidelines in due time.

Source (TD Canada Trust)

These changes are significant and they will have different implications for different people. Whether you are refinancing or purchasing, these changes could potentially impact you. We advise that if you do have any questions, concerns or want to know more that you contact your Dominion Lending Centres mortgage specialist. They can advise on the best course of action for your unique situation and can help guide you through this next round of mortgage changes.

Geoff Lee

Dominion Lending Centres – Accredited Mortgage Professional
Geoff is part of DLC GLM Mortgage Group based in Vancouver, BC.

Mortgages and Paperwork

Paperwork-it’s a fact of life. You need it and we as mortgage professionals also need it. Below is a list of must have documentation BEFORE you start going through the mortgage approval process.

Personal Information
This will be the basic information we require to start your mortgage process. It will include your age, marital status, and number and age of kids. For this first step, a divorce/separation agreement if you are going through a divorce or were previously divorced will also be required.

Employment Details
Your employment details will require more paperwork than your basic details. This will include:

• Proof of income (T4 slips, job letter, paystubs, and/or personal income tax returns – T1 Generals)
• Notice of Assessments from the last two years

If you are self-employed then you will also need to provide any incorporation documents, financial statements and submit full personal tax returns (T1 Generals) as well as a CRA Notice of Assessment (NOA) for both the corporation as well as you personally. If you don’t have these documents on hand or can’t find them, we highly recommend using a document service like Easy NOA. We have had clients use them with fantastic results and no hassle on your end. Check them out by visiting their website – easynoa.ca.

Other Income Sources

• Typically, this is a statement on your part but the lender might ask for back-up documentation. This may include:
• Pension documentation and information
• Rental income property income documentation
• Part time work paystub with job letter
• Child Tax Benefit documentation
• Child/Spousal support documentation
• Investment Income documentation
• Disability income documentation

Documentation of current property
If you already own a property, you will need to have a copy of your current mortgage statement on your current property and a copy of last year’s property tax statement. You may also be asked to provide this year’s up to date property tax statement.

Keep in mind that every person’s situation is unique and this list only outlines the traditional documents required to pursue your mortgage. For example, if you receive child support you will need to have proof of that (i.e. copy of your separation/divorce agreement and the last three months bank statements showing the payment of the child support to you) or if you have experienced bankruptcy you will need to provide a list of debts paid off with a copy of your bankruptcies discharge papers.

Again, we know that sometimes things get lost or misplaced (we have been there too!). If you find yourself scrambling to find one of these documents or another document that your mortgage broker has requested, a service like Easy NOA can have it delivered to your inbox within 24 hours. Having these documents on hand in preparation for going through the mortgage approval process will make the entire experience run much smoother—and make it an enjoyable one! If you have any questions, give your Dominion Lending Centres mortgage specialist a call.

Geoff Lee

Dominion Lending Centres – Accredited Mortgage Professional
Geoff is part of DLC GLM Mortgage Group based in Vancouver, BC.

Additional Financing with a “Blend and Extend” Mortgage

Prepayment Privileges

You need additional financing. Do you prepay your existing loan? We remind readers that commercial mortgage borrowers do not enjoy the privileges afforded personal borrowers. Section 10 of the Interest Act, allowing borrowers to repay loans after 5 years, with a 3 month interest penalty, does not apply.

In fact, for the most part, commercial mortgage borrowers who’ve secured fixed rate mortgages, do not enjoy any prepayment privileges. Commercial mortgages are typically closed for repayment for the duration of the term.

Mortgage Term Selection

Important considerations include what your investment strategy is. If you are a buy and hold investor, a longer term loan may be preferable. On the other hand, if you are adding value with the intent of selling over the near term horizon, then perhaps a shorter mortgage term is appropriate.

What are Your Options?

What does a borrower do if additional funding is required mid term? Several obvious options are available:

• Refinance your present mortgage and secure a new loan for the higher required amount.
• Secure a 2nd mortgage for the required amount of additional funds.
• Refinance other real estate within your portfolio.

Any of these strategies are viable, but all come with costs. A refinancing mid term necessitates negotiating a prepayment privilege. Your lender may simply not entertain the request, or if they do, the prepayment privilege may be costly. The 2nd mortgage option is certainly viable. However interest rates will be higher than the 1st mortgage, and additional loan processing fees, legal fees, and likely 3rd party reporting will be required. Refinancing other assets may be an option, if you have a portfolio of properties, however similar additional costs will be incurred.

Additional Financing with a Blend and Extend Mortgage.

The most straightforward approach to securing additional funding, may simply be to approach your existing lender and request a “blend and extend “ mortgage. In simple terms, you are asking your lender for new money, to layer over the existing mortgage. What they will do is structure a new loan with the old (i.e. existing mortgage amount) at the contract rate, and blend it with the new money at the new contractual rate.

What are the Benefits?

1. No Breakage Fees. You are essentially keeping your existing loan, so no prepayment penalties/breakage fees are required.

2. Lower loan processing costs. Your existing lender already has a Mortgage/Charge on your property. They could quite possibly could re-advance funds with the existing security documentation in place. As well, the lender’s lawyer may be able to realize savings inasmuch as they would be familiar with your title situation.

3. Competitive borrowing costs. While you are not likely to secure funding at today’s market rates, depending upon the relative amount of new funding required, you will likely be able to realize a weighted average interest rate lower than your present rate.

4. A Longer Term can be secured. Most lenders are quite receptive to granting a new longer term with the requested additional funding. Extending the term, when market rates are lower than your contract rate, will further decrease the blended rate. The option to blend the new money for the remaining term (known as Blend to Term), while less common, will still result in a lower interest rate payable.

Securing additional funding mid term shouldn’t be difficult. Your personal situation will dictate the approach most beneficial for you. While refinancing and secondary financing are viable options, they can be costly solutions. Consider approaching your existing lender for a Blend and Extend loan. Its an underutilized but nevertheless effective tool to secure your required additional funding. If you have any mortgage related questions, call a Dominion Lending Centres mortgage specialist today.

Allan Jensen

Dominion Lending Centres – Accredited Mortgage Professional
Allan is part of DLC The Mortgage Source based in Ottawa, ON.