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Should I Go Fixed or Variable?

It’s the first and only thing anyone usually asks when you talk about your mortgage: What’s your rate? While everyone can recall their rate off the top of their head, it’s the only detail of the mortgage they remember or care to know. Though the rate is obviously important, your mortgage is so much more than a rate, and if you’re not paying close attention, it can cost you money. Before we dive deeper, let’s talk fixed rate vs. a variable rate and which one is better. Well, that all depends. First-time homebuyers and older homebuyers typically love the stability of a fixed rate. Keep in mind, seven-in-ten fixed mortgages are broken before the term ends. A fixed rate for five years is fine as long as you stick with a lender that’s going to calculate the penalty if you break your mortgage on the contract rate versus the Benchmark …
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Flex Down Mortgages

  A flex down down payment isn’t your typical mortgage scenario. Let’s say you have the credit score and income to buy an additional property but you haven’t managed to save up the down payment.  You may choose to borrow money from a third party or somebody may even gift it to you.  Not every lender will just accept that as payment.  You’ll need a flex down mortgage program and it’s something you really need to talk about with your mortgage broker.  It may even be possible to pull the down payment from a secured line of credit but paying back that money will be considered like any other bill payment on your application. Keep in mind that flex down mortgage programs will also typically require you to put in some of your own money or put down 25% or more.  Flex down programs have better interest rates than you …
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Credit Scores

Your credit score is a big factor when you apply for a mortgage.  It can dictate how good your interest rate will be and the type of mortgage you qualify for. We’re experienced helping clients with a wide range of credit scores so we can find you a mortgage product even if your credit is far from perfect. The good news about your credit score is that it can be improved: Stop looking for more credit.  If you’re frequently seeking credit that can affect your score as can the size of the balances you carry. Every time you apply for credit there is a hard credit check.  It is particularly important that you not apply for a credit card in the six months leading up to your mortgage application.  These credit checks may stay on your file for up to three years. If your credit card is maxed out all …
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Mortgage Rule Changes Explained

By now, we’re all aware of the major mortgage rule changes that have started to come into effect at the start of the year. To recap, in October, the Office of Superintendent of Financial Institutions, or OSFI, introduced tighter rules on mortgages set for Jan. 1, 2018. While there were several changes announced, the biggest affects consumers with uninsured mortgages, who must now undergo a qualifying stress test. More specifically, under the new rules, non-insured mortgage consumers (buyers using a conventional mortgage with a down payment worth 20 per cent or more of the purchase price) must now qualify using a new minimum qualifying rate. The minimum rate will be the greater of the five-year benchmark rate published by the Bank of Canada or the lender’s contractual mortgage rate plus two percentage points. The stress test for non-insured mortgages applies to both fixed- and variable-rate mortgages. The new qualifying rules …
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10 Tips for Dealing with the Limbo of Separation and Divorce

This is a guest blog written by Colette Fortin, Owner of Fairway Divorce Solutions Waterloo-Wellington. Being in limbo – not knowing where one will be in the near future, whether it’s 3 months or 3 weeks, has got to be one of the most stressful stages of any life change – and especially in separation and divorce. As human beings, we like to have a sense of control and security.  So when the human brain is under stress, the ‘fight or flight’ mode is fully engaged.  Our sense of equilibrium is shaky.  We can easily become emotionally hijacked and we don’t have access to our rational brain. So how do you calm the fearful ‘lizard’ brain when you’re passing through the limbo phase of a separation and divorce?  Here are 10 suggestions for getting through the next few months. 1. Regain some perspective – if only to recognize that your …
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Making 2018 Your Turnaround Year

It’s become a bit of a cliché to talk about resolutions at the start of the New Year. You’re going to be inundated with pitches to exercise more, “eat right” or pick up a new hobby. These resolutions start out with the best of intentions but ultimately most of us can’t manage to keep them. Within a few days or weeks, we’re back to our old habits. Perhaps only a psychiatrist knows why we can’t keep our resolutions. While giving up the sweets might seem like an impossible task, getting into some good financial habits at the start of the year is easier than you think. And there is no better time to look at what you might be doing right and perhaps wrong when it comes to your finances and make a change to see a more prosperous 2018. These are by no means brand new ideas but rather …
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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 …
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The Tracy Valko Mortgage Team

Big Mortgage Changes Coming January First

There has been significant media coverage around upcoming changes to mortgage lending rules that will take effect Jan. 1, 2018. These rules will affect many more people than most realize. They will affect people seeking a mortgage most obviously, but they will also affect those with a mortgage in many ways as well. Let’s take a look at some key areas of concern for both groups, those with a mortgage, and those without (but seeking) a mortgage. What is the impact? A reduction of 20 per cent-plus in maximum borrowing power for those with a 20 per cent or GREATER down payment. You read that correctly, a big reduction for the group with the bigger down payments. The Have Nots You don’t have a mortgage yet, but you have a Pre-Approval, so you think you’re safe with that Pre-Approval…you may be and also you may not be. A select group …
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3 Mortgage Terms You Need to Know

Prepayment, Portability and Assumability Prepayments One of the most common questions the Valko team gets is about mortgage prepayments.  The conditions vary from lender to lender but the nice thing about prepayments is that you can pay a little more every year if you want to pay off your mortage faster. A great way to do this is through prepayments. They’re always something to ask your broker about because each lender is very different.  You can always do an increase on your payments and that means that you pay a little bit more each week or each month when you make your mortgage payment.  You can also make a lump sum payment.  Perhaps you get a bonus every year or you get a lot of Christmas money.  You can just throw that on your mortgage.   It goes right on the principle so you’re not paying interest on those extra funds.  …
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