Categories
Mortgage Renewal/Switch

Mortgage Renewal Process in Canada

When buying a house, you usually sign a mortgage with a 15 to 35-year amortization. But throughout that time, the lender can break your mortgage into terms that last anywhere from 6 to 120 months. The mortgage is broken up into 24- to 60-month terms in most cases.

So, when you renew your mortgage, it usually means that you are signing a new agreement with the lender for a term equal to all or part of what is left on your previous agreement. The renewal cost will depend on current lending rates at the time.

The Mortgage Renewal Strategy in Canada

There are two things that any serious homeowner should do before the end of their mortgage term:

  1. shop around for a new lender or
  2. have a renewal strategy.

While you might think that renewing your mortgage automatically means going with the same lender, there are some great reasons to take advantage of other lending options open to you.

Mortgage Renewal in Canada: Step By Step

Remember, if you don’t shop around for the best mortgage renewal rates available to you, you’re leaving money on the table. So here’s what to do:

Step 1. Start Preparing on Time

Think about how much you can realistically afford and decide on a budget. Remember that your lender will most likely require you to qualify for the new mortgage at a higher interest rate than what you paid on your last term.

Gather all of your financial documents, including the latest payslip, bank account statements, a notice of assessment from the Canada Revenue Agency, etc. Make sure to provide your financial institution with a copy of this information if they request it. You may also be asked to provide proof of employment or other income sources.

Contact a lender and tell them you’d like to get pre-approved for a mortgage renewal. They’ll give you a rate and a pre-approval code that you can pass on to the seller of your house. The seller may then write into the offer that they will accept your renewal application, provided you meet all other conditions for buying a property (price, financing).

Step 2. Choose to Renew or Break Your Mortgage Term Early

When you get a mortgage renewal letter from your bank, it will show your current interest rate next to the new rate you will have if you renew. It’s very tempting to say “OK” and avoid all the confusing fine print. But by doing so, you’re only agreeing to sign another mortgage term with your current lender – which means locking yourself into paying that new rate for the next 20-25 years! That is unless you choose to break your mortgage or renew it early.

The pre-authorized cancellation form is the only way to terminate your mortgage without penalty. It lets your lender know that you’re ready to end your current agreement. The benefit of using this method is that you will be able to shop around for the best new rates and terms from other lenders when you do break it.

Step 3. Know You Renewal Options

Before you renew your mortgage, you need to know what kind of mortgage product would suit you best. Knowing the options might help you become mortgage-free sooner than you thought. Here are some of the essential options and terms you should know:

  • Fixed-Rate Mortgage: Your interest rate stays the same during the loan term. You will need to refinance at the end of the term unless you want to renew your fixed-rate mortgage.
  • Variable-Rate Mortgage: A floating-rate mortgage is also tied to prime lending rates and can change anytime. If interest rates go down, your payments may decline accordingly.
  • Principal and Interest Payment Mortgages: This kind of mortgage has you paying off your principal (the actual loan amount) and financing charges each month for the term.
  • Interest Only Mortgage: You only pay off just finance charges by making monthly payments that don’t cover any part of your principal balance or total interest due during the term.
  • Line-of-Credit Mortgages: A particular type of variable rate mortgage attached to a separate line of credit. It’s great for those who need the flexibility to borrow from their own home during the mortgage term without being charged extra fees or penalties. The interest you pay on this loan changes along with prime lending rates.

Step 5. Remember: It’s OK to Walk Away From Your Mortgage Term

If you’re not happy with any offers from your current lender or another one, don’t just sign anything right away. Instead, consider whether or not renewing is even in your best interests at all. Think carefully about how long you plan on staying in the home before you sign on again – and whether or not finding a better rate than what is being offered might make more financial sense in the long run.

If you do decide not to renew your mortgage, make sure to get out of it properly by either filling out a pre-authorized cancellation form or breaking your term early with no penalty before its time is up. If you don’t, then you could find yourself stuck paying an interest rate that’s higher than what other lenders are offering elsewhere. Also, remember that while mortgages may come with terms designed to protect lenders from customers defaulting on their loans, they’re also meant to help homeowners achieve their financial goals.

The Bottom Line

Your mortgage renewal date is an important day – and it’s your chance to switch your existing loan to a new plan that better suits you. In most cases, the first thing you need to do before even thinking about renewing is to make sure that you’re as satisfied as possible with the product and service being offered by your current lender.

If no other bank can offer a better deal, then don’t be afraid of sticking with what you have if it means keeping monthly payments manageable for both yourself and your family. But whatever you do, make sure not to ignore this crucial step in the mortgage process! It can help ensure that getting rid of your home won’t become more costly than it needs to be later on down the road – especially since most Canadians don’t know when they’ll finally be done with their mortgage.

Hope now you know the process of Mortgage Renewal in Canada. For more information on Mortgage, Refinance, Rates, Home equity visit our website Best Mortgage Online

Categories
New Purchase Mortgage

Mortgage Down Payment in Canada: Everything You Need to Know

If you’re reading this, you’ve probably come across the news that prices of down payments in Canadian cities have skyrocketed over the past year. As CTV News reports, in 2021, housing affordability has worsened by the widest margin in nearly 30 years.

But despite all of this, many Canadians are still out there buying properties. Whether you’re buying your first home or owning multiple properties, you know that the buying process starts with saving for a down payment. 

To help you start, here’s everything you need to know about down payments in Canada.

How Minimum Down Payment Works in Canada

When a down payment is mentioned, people usually think of the minimum amount you must pay as a deposit. However, the term mortgage down payment covers different deposits with varying credit conditions.

The Loan-to-Value Ratio (LTV) is how much of your home’s price is paid by the mortgage. Most mortgage lenders use this insurance to keep themselves safe even when they don’t have collateral.

The minimum mortgage down payment in Canada ranges from 0% to 20%. In addition, all high-ratio mortgages require mortgage default insurance, which protects against losses in case of borrower default, death, or disability.  

The amount you put down will affect the mortgage rate and mortgage payment. For example, if you put down a mortgage down payment of less than 20%, there will be mortgage insurance fees.

The mortgage insurance premium is payable to the mortgage insurer, the Canada Mortgage and Housing Corporation (CMHC), or Genworth Financial Canada Ltd. This amount is usually included in your monthly mortgage payment. Exclusions from mortgage insurance include:

Best Mortgage Online Canada - Mortgage Down Payment

Different Types of Minimum Down Payments

Though mortgage down payment is usually used interchangeably with mortgage insurance, there are also different types of mortgage down payments.

Cash Committed Mortgages

If you need a mortgage loan but don’t have the minimum 20% mortgage down payment, your mortgage advisor can help you get a cash-committed mortgage loan. A cash-committed mortgage loan requires mortgage insurance because the loan amounts are greater than 80% of the property’s value.

A cash-committed mortgage loan requires mortgage insurance because the loan amounts are greater than 80% of the property’s value.

Lender Mortgage Insurance (LMI)

If you plan to borrow more than 80% of your home’s price and can’t meet mortgage down payment requirements, it will be an interest-only mortgage with mortgage default insurance. That means mortgage insurance premiums must be paid with interest charges until the mortgage is paid off, or mortgage down payment can be increased to 20% or more of the home’s value.

CMHC Mortgage Loan Insurance Premium (CMHC MIP)

If you need mortgage financing and cannot make a minimum 5% mortgage down payment, you can apply for mortgage loan insurance with the Canada Mortgage and Housing Corporation (CMHC. The CMHC mortgage loan insurance premium is payable to mortgage default insurance.

National Housing Act Mortgage Loan Insurance Premium (NHA MIP)

The National Housing Act mortgage loan insurance premium is payable to mortgage insurer Genworth Financial Canada Ltd., on mortgage loans with mortgage rates more than the mortgage down payment.

Mortgage Loan Insurance Premium (MIP)

The Canada Housing and Mortgage Corporation (CHMC), a mortgage insurer under the National Housing Act, operates as Canada Guarantee. This mortgage insurance premium is payable to mortgage insurer Genworth Financial Canada Ltd., on mortgage loans with mortgage rates more than the mortgage down payment.

How Much Mortgage Down Payment Do I Need?

You don’t need to pay a 20% mortgage down payment to get a mortgage loan, but you must avoid borrowing more than 80% of your home’s value. You can calculate this by taking your property value and subtracting the mortgage down payment.

Different mortgage lenders have different mortgage rates and insurance premiums for mortgage down payments. You can lower your monthly mortgage rate by making mortgage down payments of more than 5% of the home’s value, e.g., 10%, 15% or 20%.

Time You Need to Save Up for a Down Payment

You need to consider how much time you need to save up for a down payment. Luckily, the National Bank of Canada recently released a report outlining how much time people need to save money to make the first down payment. 

If you saved 10% of your pre-tax household income, it would take you slightly under six years – or 69 months – enough to save for a down payment on a typical Canadian home. As at this time last year, there had been 57 months of saving at the same rate.

Putting away 10% of your household’s pre-tax income may take decades in Vancouver, Victoria, and Toronto.

Average Down Payments by Province

Next, you need to realize that your down payment vastly varies from province to province. That can help you determine how much money you’ll need for a down payment on a house in your area based on the average price of homes in your area. 

Here are the average don payments in Canadian provinces, according to the latest Real Estate & Housing Market Forecast report:

  • British Columbia: The average down payment in British Columbia is $159,762.64, or 22.5% of the purchase price of a property.
  • Ontario: Ontario homebuyers, on average, make a larger down payment than residents of any other province (aside from British Columbia). 
  • Quebec: According to first-quarter data, Quebec residents made the smallest down payment on a home, with an average of less than 15%.
  • Alberta: The average down payment in Alberta was $62,929.45, making it the second-lowest in the test markets, behind only Quebec’s 15.15 percent.
  • Nova Scotia: The average down payment in Nova Scotia is 18.54 percent ($57,781.46), the lowest among the test markets at $363,330.

Closing Thoughts

The mortgage down payment is the cash a home buyer needs to pay as a deposit on a mortgage. Mortgage insurance reduces this for buyers who can’t complete a down payment. Depending on mortgage rates and insurance premiums, you can calculate mortgage down payments in Canada.

Let us at Best Mortgage Online help you find the best loan rates to assist you in your home purchasing process. Contact us via the button below.

Categories
Mortgage Renewal/Switch

Will Your Mortgage Renew Automatically in Canada?

Will Your Mortgage Renew Automatically in Canada?

In Canada, when a borrower takes out a mortgage loan to purchase a property, the loan is typically secured by a written agreement called a “Mortgage.” The borrower agrees to repay the mortgage using monthly payments consisting of interest and principal. The period used for repayment of principal is referred to as the term.

In most cases, borrowers will sign a mortgage for a term of 5 to 25 years. However, once the borrower has paid down the principal to 80% of the property’s original value, he may be able to renegotiate his loan with his lending institution to obtain lower monthly payments.

What Does Mortgage Renewal Mean?

Renewing a mortgage means that the borrower will take out another written agreement with the lending institution, paying off the original loan and signing up for a new term to pay down the principal. Each time this is done, borrowers may be charged fees to obtain their new mortgage.

When Does Mortgage Renewal Occur?

When you renew your mortgage depends on whether or not it has an automatic renewal clause or “option.” At least 30 days before the expiry of your current mortgage, you should receive notification from your lending institution regarding its renewal policy. Borrowers are typically informed if their mortgages will automatically renew subject to certain conditions. These conditions include:

  • The property value increases;
  • The creditworthiness of the borrower;
  • The property type; and,
  • Changes in market conditions.

Suppose your lender does not include an automatic renewal clause in its mortgage agreements. In that case, borrowers are required to make arrangements with their lending institution before the expiry date of their mortgages to obtain new loan terms. Failure to do so may result in a default on the original agreement.

Borrowers who fail to pay their outstanding debts will be subject to foreclosure proceedings by their lenders. They will also lose any accumulated equity in the property, which generally reverts to the lending institution.

Best Mortgage Online

What Happens When Your Mortgage Expires?

If you have a fixed-rate term with no options or renewals attached, your mortgage will expire at maturity. That means that your lender cannot ask you to renew or extend the term of your agreement, and for this reason, a fixed-rate mortgage is a good choice if you think that you might want to move from the property in question before the end of the term.

When Does Your Mortgage Renew Automatically?

During the fixed-rate term of your mortgage, you may wonder what will happen to your rate and monthly payments if they aren’t changed when your agreement expires. That is a good question and one that your lender’s automatic renewal clause can answer.

When Does Your Mortgage Not Renew Automatically?

Most mortgages contain an automatic renewal clause with terms that range from six months to five years. The length of time will vary depending on the type of property involved, how much has been paid off on the existing loan, the borrower’s creditworthiness, and market conditions.

For example, borrowers with “substantial equity” in their homes may have a renewal term of 10 years, while those with no equity usually have to renew for five. With this being said, the bank will not provide a more extended renewal option than the borrower needs or wants.

Borrowers who want a definite expiry date can choose a five-year option and then renegotiate the terms of their loans at maturity. Those who prefer to pay off their mortgages earlier can opt for shorter terms, such as 18 months or two years.

What Happens During Your Mortgage Renewal?

Once your mortgage has been automatically renewed, you will be required to sign another agreement with your lending institution. This document will list all of the original loan details along with the new interest rate, repayment date, amortization period, and other information.

The bank will not automatically save you money on your new rates or terms. To receive the best possible renewal package from your lender, you must call the institution during this time to negotiate a more competitive interest rate and term.

Let’s say that your mortgage is renewed at a higher rate than that on the original agreement. Then, it may be possible for you to refinance with another financial institution within a short period following its expiration. 

That particular strategy may spare you some of the higher associated costs involved with breaking before maturity, as well as those incurred from being charged an early termination fee by your current lending institution.

How Can Your Mortgage Renew Automatically in Canada?

If you need a new mortgage, consider how it will renew automatically in Canada. Some lenders offer personalized renewal terms tailored to your specific requirements. These may include:

  • The ability to lock in interest rates;
  • Mortgage renewal guarantees; and,
  • Loans with flexible terms.   

Pros and Cons of Automatic Mortgage Renewal

There are advantages and disadvantages for borrowers who choose to have their mortgages automatically renewed. For example, suppose you are out of the country or plan on moving far away from your property before the end of your fixed-rate term. In that case, automatic renewal may be beneficial because it reduces one more element that could prevent you from renewing.

On the other hand, if you expect rates to fall over the next few years, it might make sense for you not to renew your mortgage but instead opt for a shorter term to take advantage of lower interest rates. In this case, opting out of automatic renewal will give your lender less bargaining power when terms with you at renewal time.

The Bottom Line On Automatic Mortgage Renewal

Keep in mind that there may be a cost involved with breaking your mortgage agreement before maturity, even if your lender does not renew it automatically. However, you can avoid this expense by calling your lender before the automatic renewal date and negotiating a better deal.

If you are looking to acquire home loans, more information on Mortgage in Canada, loan rates in states of Canada, etc. let Best Mortgage Online help you.

Categories
Mortgage Refinance

Three Important Aspects to Look at Before Refinancing

Are you a mortgage holder and looking to make changes to the original loan? Refinancing should be the answer. This approach gives you the flexibility to take charge of your mortgage while adding instant funds into your budget. 

Homeowners can use the new loan to lower the interest rates, pay off the mortgages quickly, and turn home equity into cash. However, make sure that you switch to the appropriate loan to make the most of refinancing. 

Understanding the process thoroughly might help you know whether switching to a new loan is the right decision or not. There are multiple factors you need to keep in mind while refinancing, here’s the guide to the three most critical aspects every borrower must look at before adopting this approach. 

A brief overview of refinancing

Before jumping into the list of essential elements, it’s vital to learn more about refinancing to understand better. As the name suggests, refinancing replaces an existing debt obligation with another debt with new terms and conditions. 

This approach lets you swap out your old, higher interest rate for a new one with lower rates. The terms and conditions for refinancing are based on several economic factors and may vary from one country to another. 

For instance, you can refinance to borrow up to 80% of the value of your home in Canada. If your current mortgage is just 50% of your home’s value, you can refinance to borrow the remaining 30% to complete the mortgage loan amount to 80% of the home value. 

This approach is mainly adopted for three significant reasons: 

● To change your mortgage type

● To borrow more money

● To get a lower interest rate

3 major aspects to consider before refinancing

Now that you are well-acquainted with the refinancing concept, let’s unveil the three significant elements to consider before using this approach. Please read them carefully to avoid any last-minute surprises.

The Cost of Refinancing

Refinancing isn’t free; hence, the borrowers must consider the cost before switching to the new loan. Depending on the loan, you have to pay various additional charges, including mortgage registration fees, legal fees, home appraisal fees, and more. The borrowers can avoid the mortgage discharge fee if they continue with the same lender. 

Additionally, if you refinance before your term is over and choose the same mortgage rate, you’ll be charged penalties. However, you can avoid them by blending and extending your mortgage rate that mixes your new rates with the existing ones. These fees can add up to hefty amounts depending on which fees apply to you while refinancing.

The Interest Rates

Refinancing your mortgage equals applying for a new loan; therefore, it is mandatory to look at the interest rates before making a switch. Unarguably, the most important reason for adopting this approach is to get a better interest rate. 

Hence, the borrowers should opt for refinancing if there is a considerable difference between the interest rates, making the whole process worthwhile. A difference of a few to some percentage points can make a big difference while saving tens of thousands of bucks in the overall repayments.

Best Mortgage Online

Check Your Loan-To-Value Ratio

The loan-to-value (LTV) ratio is yet another critical factor to consider before refinancing your mortgage. This value mainly looks into how much money you take out to buy a home versus the home’s actual value. 

LTV is one of the primary ways lenders use to calculate the level of risk associated with the approval of your mortgage. Hence, the borrowers must present a better LTV ratio to get a loan faster. The more money you invest into the house, the more equity you have in it—also, the lower your LTV, the better the chances of securing good loan terms. 

As you pay off the mortgage, you build up equity in your home. This is the difference between the value of the property and the remaining balance of your mortgage. Your home equity will rise as you pay your mortgage. 

In Canada, you can refinance to borrow up to 80% of the home’s value. For instance, you owe a $200,000 mortgage on a $400,000 home. It means that your current loan-to-value ratio is 50%. Since you can only borrow up to 80% of your home, you can refinance to borrow an additional amount of $120,000 (30% of $400,000)

If you have two mortgages, you may also use a refinanced amount to consolidate the second mortgage with your first one. 

Other factors to keep in mind before refinancing

In addition to the elements listed above, there are a few more factors that you should consider before refinancing your mortgage. 

● Check if your credit rating is good enough

● Determine the good time to refinance 

● The primary reasons for switching to a new loan

● Know your Debt-To-Income (DTI) ratio. 

● Don’t forget the taxes

The Bottom Line

Refinancing your mortgage is a big decision; hence take ample time and conduct in-depth research before making a switch. A mortgage refinance is best suited to homeowners that home equity is looking to borrow a massive amount at a fixed rate. 

However, it might not be a good option for borrowers who need quick access to money or looking to borrow small amounts at a time. This approach comes with both pros and cons; therefore, you should keep all aspects in mind before transitioning from one loan to another. The decision is for you to make, so make it precise.

For more mortgage advice and loan rates, give us a call at 1-855-567-4898 (toll free) – Best Mortgage Online.

Categories
New Purchase Mortgage

How to Pick a Mortgage Lender in Canada: 10 Questions to Ask

If you’re a new homeowner, a mortgage is a huge commitment. Like any contract, it’s essential to know the details of what you are signing up for. After all, mortgage rates change frequently, and if you don’t know the particulars of the mortgage agreement, this can cost you money.

Understanding Mortgage in Canada

In Canada, there are a few different mortgage options:

  • Conventional mortgage: A mortgage that requires the borrower to make mortgage payments to repay the loan over time
  • High Ratio Mortgage: Type of mortgage that requires the borrower to make mortgage payments to repay the loan over time and requires the borrower to pay a monthly mortgage insurance premium.
  • Second/Third Mortgage: For one who has already signed another mortgage agreement with an institution.

The mortgage lender you use will significantly affect the mortgage rates and terms you receive. Here are some tips on choosing your mortgage provider:

  • Talk to family or trusted friends
  • Ask your real estate agent for recommendations
  • Shop around online through mortgage brokers in Canada
  • Decide if you want to go through a mortgage lender or a mortgage broker

What Makes a Good Mortgage Lender?

Your lender will be your single point of contact for the mortgage agreement as far as mortgage providers go.

You want to find someone who makes you comfortable throughout the mortgage process and is reliable. Some mortgage brokers offer competitive rates and products, while some lenders earn their money solely by originating mortgages.

Some mortgage lenders or brokers offer their mortgage insurance, while others link you with mortgage insurers. It is essential to know that mortgage rates can change quickly, so it’s vital to know if your mortgage provider will be able to match the best mortgage rates in Canada.

Identifying Your Mortgage Lender

The mortgage broker is a professional who helps people find a mortgage lender and helps them through the process of getting a mortgage.

Mortgage lenders can range from banks to credit unions and trust companies, among others. When it comes time for changes, you’ll want someone with experience when it comes time for changes, such as renewals or payment amount changes. During financial hardship, the last thing you need is an inability to make adjustments with your mortgage lender without incurring fees.

Typically, mortgage lenders will provide a mortgage broker with a mortgage rate and mortgage insurer, or they may give them a combination of both. As a result, the mortgage lender can offer conventional and high ratio mortgages.

A mortgage broker can help you find the best mortgage rates available in Canada, regardless of whether they’re from a bank, credit union, or mortgage insurer.

There are two types of mortgage brokers:

  • Sales-Based Mortgage Broker: A mortgage broker whose primary source of income is originating loans and collecting commission for doing so.
  • Non-Sales Based Mortgage Broker: A mortgage broker whose primary source of income is not originating loans and collecting commission for doing so.
Best Mortgage Online Canada

10 Questions You Need to Ask Your Mortgage Lender

Different lenders offer different mortgage plans with these options. Here are the top 10 questions to ask mortgage lenders in Canada before signing on any dotted line:

What is your mortgage rate?

This is an obvious question, but it gives you a rough idea of what kind of mortgage you can afford. If mortgage rates are low (less than 5%), then mortgage rates are usually lower too.

What is your mortgage penalty?  

This question will tell you what the lender charges if you need to break your mortgage agreement early or if mortgage rates drop below what you initially negotiated been. For example, some lenders charge an entire three-month interest while others only charge one month’s interest to break the mortgage agreement early. Failing to pay your mortgage penalty can also negatively affect your credit rating.

How will mortgage rates change over time?

Different mortgage lenders use different methods to calculate mortgage rates, so it’s essential to compare the mortgage terms of each lender. For example, some lenders offer “fixed” mortgages that don’t change for a set period, while other mortgage rates vary based on the prime rate or other lending rates.

What penalties do you charge if rates rise during my term?

The mortgage lender should be clear about whether they have a penalty for your mortgage rising in interest before it expires. This way, you’ll be able to make an informed choice about mortgage rates.

How often is my mortgage interest rate reviewed?

Some mortgage lenders will review mortgage rates every month, while others only review mortgage rates every 3-5 years. You should know how often your mortgage will be reviewed to avoid higher mortgage rates when you renew your mortgage agreement.

Can I lock my interest rate for a set period?

Most mortgage lenders will offer you the chance to “lock in” mortgage rates before they change. That is great if you’re planning to buy a house and want to know your mortgage costs, but it also helps prevent mortgage rates from increasing.

How much do mortgage payments increase over time?

Depending on the mortgage lender, mortgage rates can increase by 5% or more after a few years. So make sure you’re aware of how mortgage rates might change over time so that you’re not surprised later on.

Can I pay off my mortgage early?

Some mortgage lenders will let you pay off your mortgage early, but there’s usually a charge for this. If possible, try to find mortgage lenders who don’t charge early mortgage payment penalties.

What type of mortgage do you offer?

Different lenders offer different mortgage plans, so make sure the mortgage lender knows what kind of mortgage you’re looking for. For example, mortgage lenders might offer mortgage plans that allow you to pay off your mortgage early without penalty, and other mortgage rates might not provide this option.

Will I be charged mortgage application fees?

Most mortgage lenders will charge a mortgage application fee when applying for mortgages, but some mortgage lenders may also charge mortgage application fees when mortgage rates drop. This way, you’ll know what mortgage lenders will charge before you apply for a mortgage.

Closing Thoughts

Other mortgage lenders may offer other mortgage plans, so it’s crucial to shop around for mortgage rates until you find the best mortgage lender. Some mortgage lenders will charge a monthly mortgage administration fee and a mortgage penalty fee if your mortgage rate rises during your term.

Best Mortgage Online can also help you acquire a mortgage, refinance a mortgage in Canada, … with the best rates on the market. Call us and talk to our agents are available at 1-855-567-4898 (toll free).

Categories
Mortgage Refinance

Things to Know Before Refinancing Your Home Mortgage in Canada

Refinancing your home mortgage in canada is a typical move to make as interest rates change – which is probably the main reason. But it’s important to know what you’re getting into and whether the new mortgage is worth it before locking yourself in for another five or ten years.

Mortgage Refinancing explained

You’re essentially breaking your existing mortgage contract and replacing it with a new one when you refinance. You want to get a lower interest rate so you can pay less in monthly payments or have the same amount of money at your disposal each month, but without having to break the terms of your mortgage agreement.

Most people refinance their mortgages because interest rates are lower than their current mortgage rate.

There are different types of mortgages you can refinance. If you’re renewing your mortgage, it’s likely your term length is up, and you’re facing a penalty for changing lenders. Instead, look into refinancing so that you can stay with your current lender or try another one without penalty.

If you already have a pre-approved rate, this is the lowest interest rate and perhaps the only chance to get an even lower rate than what’s been previously offered. 

Your lender will ask for details about your income and savings to determine whether they’ll approve the new loan at that rate or not. It depends on individual circumstances such as employment status and credit history.

Top Reasons to Refinance a Mortgage in Canada

There are many benefits to refinancing your mortgage. For example, you can get a reduced interest rate or consolidate debt. The following list provides the top reasons why people refinance their mortgages:

  • Lower Interest Rate: This is one of the primary reasons anyone would consider refinancing a mortgage. Your lender will review your financial condition and present you with a lower interest rate if it’s warranted;
  • Debt Consolidation: If you’re trying to pay off debt and improve your finances, take out a new mortgage that combines all your old debts into one, so you only have to worry about one monthly payment at a lower interest rate;
  • Access Home Equity: When you refinance, you can access the equity that’s built up in your home over time. You can use it to do renovations or pay for college tuition;
  • Cash Out Equity: While this isn’t recommended unless you need the money since it puts your financial stability at risk, it is an option if you want to take out extra cash;
  • New Lender Relationship: You usually have better terms and conditions with a new lender than your existing mortgage.
Best Mortgage Online Canada

When is the Right Time to Refinance Your Mortgage?

Refinancing your mortgage is a big decision. You don’t want to rush into it without weighing the pros and cons of refinancing versus renewing your current mortgage.

If interest rates are lower than what you’re currently paying, that’s a good indication you should refinance. Likewise, suppose you have an adjustable-rate mortgage that rises with interest rates. In that case, this might be a time for you to consider refinancing as well since banks usually offer lower interest rates on variable mortgages when they adjust them from their highs.

Before signing on any new loans or taking out cash for any reason, make sure you can afford your loan contract’s new terms and conditions. It may seem appealing to consolidate debt or a reduced rate when interests are high, but you could risk becoming delinquent on your payments if interest rates ever go down and you can’t keep up with the new terms.

Can You Refinance Your Mortgage If You Have Bad Credit?

It’s not impossible to refinance a mortgage even when you have bad credit. That said, it won’t be easy as lenders would look at many factors, such as your debt-to-income ratio and capacity to repay the loan before they approve or deny loans.

If you want to refinance a mortgage with bad credit, start applying for personal unsecured loans. This way, your poor credit history will be tied up with other forms of non-mortgage debt that might not reflect poorly on you.

You may also need to find high-interest loans to pay off your old debts before you can consolidate them into a lower-interest loan. Doing this might not be an option for everyone, but if you have the means and it will help improve your credit score in time for refinancing, it’s something to consider.

How to Refinance Your Mortgage in Canada

Following a few tips can help you refinance your mortgage successfully. For example, shop around before accepting the first offer from a lender and be prepared to negotiate terms if possible.

Refinancing a mortgage is not an overnight process – it can take up to six months for lenders to review your application and approve or deny your request for refinancing. As such, careful planning ahead of time will help the process move as smoothly as possible.

When refinancing a mortgage in Canada, you’ll need proof that there won’t be any gaps in your payments due to switching lenders. However, since most people make changes to their mortgages when they renew their loans, this isn’t usually a problem because you’ll have automatic payment withdrawals set up with your new lender by then.

However, if you’re switching lenders outside of renewal season or are coming to the end of your mortgage term, you’ll need to prove that you have other forms of income if there’s a problem with getting automatic payments set up.

If you don’t show proof that your credit score will allow for an automatic payment plan, your lender might require upfront monthly installments until they can establish whether you can make the required payments on time each month. If your credit score is borderline and this option isn’t available through your current lender, refinancing might not be an option for you.

Improve Your Financial Situation Today!

After paying down your debts, ask your existing lender about the chances of getting a reduced interest rate or being approved for a refinance without excellent credit. You may have to shop around for an alternate lender first and then reapply with your current mortgage company once you’ve paid down other debt and improved your financial situation by other means, such as building savings.

Explore Best Mortgage Online for more mortgage topics. You can reach us at 1-855-567-4898 (toll free) for more mortgage advice and get to know the best loan rates on the market at the moment.

Categories
Home Equity Takeout

How to Tap Into Your Home Equity Safely

There are times when people need access to cash in a hurry. For example, emergencies happen, or you want to buy something expensive. One way of accessing the money you have tied up in equity in your home is by tapping into home equity, also known as “taking out a second mortgage.”

There are several ways to tap into your home’s equity to get a specific amount of cash. But tapping into your home equity also comes with significant risk. Because you are selling a portion of your home, it’s best not to take out any second mortgage that you can’t afford or that will put your family in financial straits.

Cash-Out Refinancing

If you decide to cash in on your home equity, you might want to refinance the whole amount of equity and use it for something else. That is called cash-out refinancing. For example, let’s say your home is worth $175,000, and the total loan on the house is $125,000. If you owe $100,000 and you refinance with a new loan for $145,000 ($115,000 borrowed), then you have just cashed out $25,000 ($145k – $100k), or 25% (100/175), of your equity.

If that sounds like an easy way to some money – and we do mean easy – watch out. Before you go through with a cash-out refinancing deal, there are several things to consider, including the interest rate and monthly payments.

In general, it’s best not to borrow against your home unless you indeed need the money. On the other hand, some people would rather have a second mortgage or cash-out refinance because they can get a lower interest rate than an unsecured loan. If going this route makes sense for you, talk to your lender about getting a new loan and making your new monthly payment manageable.

Refinancing from Another Lender

In this case, you borrow money from another lender to pay off your present loan or to get a larger loan that will cover the cash-out refinance. With a refinancing loan, you take out a new loan for one amount and use it to pay off another existing debt. By doing this, you have just used the value of your home as security for the new debt. Before applying for any refinancing loan, make sure that you can afford the monthly payments on both loans after they are consolidated into one payment.

With either second mortgages or cash-out refinancing deals, lenders offer what is called a home equity line of credit secured by your home’s equity. If you don’t need the money for a while, you can keep the credit line open and available for future use. But be careful not to spend too much of the limit, or it could affect your ability to come up with the monthly payment on loans or credit lines that make use of this equity line.

Best Mortgage Online Canada

Home Equity Loans

A home equity loan is an amount borrowed against your home’s equity in one lump sum. You borrow money from a bank or other lending institution and pay interest on the total amount until it is paid off. Unlike a second mortgage, where you get all of this money at once, most lenders give you just part of what you need right away and then continue to supply you with periodic loan disbursements until they provide you with everything that was approved.

You’ll usually have a fixed amount of time to pay off the loan. However, interest rates on home equity loans are typically adjustable, meaning they can change from one period to another. That is an essential consideration because it could affect your monthly payment and total interest paid over the life of the loan.

In most cases, lenders require homeowners to have no other mortgages on their homes when they apply for a home equity line of credit or home equity loan. However, some lenders may allow homeowners with existing mortgages to consolidate them into their new debt, but this will vary according to their discretion.

That means that you should be debt-free before you begin applying for these kinds of loans, although some lenders may allow you to have a second mortgage and still get a home equity loan.

Caveats About Home Equity Loans

Homeowners should not borrow against their homes just because the interest rate on a home equity loan is lower than other types of lenders, especially if they are in danger of not paying it back. The lower interest rate can be deceiving because, after all, you are putting your home up for collateral when you obtain this type of loan. 

If you cannot afford the monthly payment or do not want to risk losing your house, don’t take out a home equity loan or line of credit, no matter how low the interest rate might seem.

Is Home Equity Loan the Best Solution For You?

If you think a home equity loan is the best solution for your situation, continue to investigate all of your choices and find out what types of rates and terms are available before you apply. Talk to several lenders to see what they have to offer. When shopping around, ask about fees as well as interest rates. Make sure that you:

  1. Fully understand the fee structure
  2. Know how much it will cost if you miss payments or default on the loan
  3. Know how those costs increase over time.

Also, check into whether your property taxes will be included in any refinancing agreement and find out what happens if they go up during the loan term. If possible, make sure that there will be no penalty if you pay your property taxes out-of-pocket.

Understanding Home Equity Loans

Since interest rates on home equity loans typically rise and fall with the prime rate, it’s not a good idea to take one of these loans unless you have no other options. However, even though some pitfalls could pose problems – such as accrued penalties for paying off early or refinancing without penalty – sometimes a home equity loan or line of credit is the only way to go.

For example, suppose you need money for necessary repairs that will not be covered by insurance or disaster relief money. In that case, this may be your only option short of cashing in all your investments and retirement accounts.

Finally, don’t assume that you won’t obtain a home equity loan or line of credit because real estate values are down. While lenders may be reluctant to issue new loans, they might still be willing to work with you if you already own your home and can provide proof of income.

We – Best Mortgage Online – can help you find the best Loan Rates in Canada and provide you with mortgage advice, consultant. Contact us via here or make a call to 1-855-567-4898 (toll free).

Categories
New Purchase Mortgage

Essential Mortgage Terminologies in Canada

Do you know the essential mortgage terminologies in Canada? These following terms are necessary for you to fully understand mortgage in Canada.

Mortgage is a specific type of loan used to purchase a home, where the home being purchased is also the security for the loan. Terminologies refer to the specific terms used in relation to a concept, and as such, mortgage terminologies mean the particular terms used in relation to a mortgage. Thus, central to understanding a mortgage is knowledge about its terminologies.

Contrary to the general belief, understanding mortgage in Canada is not so tedious; rather, it is pretty straightforward. However, you must first understand the essential terminologies associated with a mortgage in Canada for this to be possible. Once you know the key terms related to mortgage in Canada, you will see that understanding mortgage in Canada is easy; so, read on.  

Essential Mortgage Terminologies in Canada

In recent years, mortgage usage has been on the increase in Canada. Interestingly, many first-time homebuyers still find it tasking, confusing, and tiring despite its popularity. However, for you, this will not be as you would learn the critical terminologies related to it in this post.

So, follow me on this trip to learn the essential terminologies of mortgages in Canada. Below are the indispensable mortgage terminologies;

Mortgage Terms

You should know that mortgages have various terms. A mortgage term is the period or length of time in which a mortgage contract will be effective. Per the Canadian financial system, there is the Long-term mortgage which is more than 5 years, and the Short-term mortgage, which is 5 years or less. 

In Canada, most mortgage holders have a mortgage of 5 years which they renew upon the expiration of the 5 years, mortgage contract. So, in Canada, the short-term mortgage is widely accepted and more popular.

Amortization

This is an essential terminology in Canada Mortgage. Do you know what amortization means? Well, it is the period required to pay off your mortgage. 

It is an estimate based on the interest rate for your current term. The maximum amortization allowed for default-insured mortgages is 25 years. Notwithstanding this, mortgage lenders also offer 30-year amortizations on uninsured mortgages. 

One substantial benefit of a more extended amortization period is that the mortgage payments will be lower but, you will pay more interest rates if you take too long to pay your mortgage.

Mortgage Fee or Prepayment Penalty

Crucial to a mortgage is the mortgage fee. It would help if you were prepared for your mortgage lender to charge you a mortgage fee in certain circumstances. This fee comprises 3-month interest, which you pay upon the occurrence of certain events. 

For instance, when you make payments more than the accepted additional payments towards your mortgage or when you pay your mortgage loan before the expiration of your term.

Also, you would pay this fee or prepayment penalty when you breach the agreed terms of your mortgage contract or when you do something contrary to the mortgage contract, such as trying to pay out the mortgage loan before the expiration of the timeframe contained in the mortgage contract. You’re bound to pay the mortgage penalty when you breach your mortgage agreement with your mortgage lender.

Ordinarily, a contractual penalty is unenforceable, and the prepayment penalty on the surface is a contractual penalty. However, currently, mortgage lenders are permitted to collect prepayment penalties. Canadian Courts have declared that prepayment penalty is not a contractual penalty per se, but rather a payment that the bank demands as compensation for getting out of an agreed contract earlier than the stipulated time.

Best Mortgage Online

Mortgage Authority

Also, it is crucial you know that the leading authority on Mortgage in Canada is the Canada Mortgage and Housing Corporation (CMHC). The CMHC provides mortgage default insurance to protect lenders if you default on your mortgage. 

CMHC is a national agency saddled with many duties and responsibilities towards developing mortgages in Canada. 

Mortgage Broker

A mortgage broker is an individual who engages in selling mortgages on behalf of multiple lenders. If you want to buy a home or plans to get a house, a broker can assist you in analyzing the best loan options from different lenders.

They render full support and assistance throughout the mortgage process. They help get your financial information, obtain your credit report, process income statements, and manage the application and closing process on your behalf. Most provinces in Canada have licensed mortgage brokers.

Mortgage Lender

This means an entity that lends money for the sole purpose of purchasing a property. The loan is then secured using the property the mortgage lender gave you as collateral.

Mortgage lenders include banks, credit unions, trust companies, mortgage finance companies, insurance companies, and so forth. In Canada, the bulk of money lenders is banks.

Mortgage Principal

This is the total amount of money owing to the mortgage lender. If you want to close your mortgage, you must make monthly installment payments to the lender, including principal and interest portions. 

Mortgage Rate

A mortgage rate is the interest lenders charge on a mortgage loan, expressed as a percentage of the loan principal. Canada has two primary mortgage rates. The Fixed mortgage rate, which is like its name, is fixed and guarantees a fixed interest rate for the mortgage term period.

The other type of mortgage rate is Variable mortgage rates, which vary from time to time due to the current financial realities.

Stress Test

Guess you thought this was an actual test. This is not a test per se but rather a set of rules employed by the financial institutions of Canada to ensure that you pay your mortgage irrespective of any financial troubles. If you want to own a house in Canada through a mortgage, you must pass the stress test.

Foreclosure

When you’re applying for a mortgage, your property serves as collateral, and a mortgage lender can sell off this collateral if you fail to pay up the mortgage. Foreclosure is a situation where a mortgage lender takes possession of a property when you default on your mortgage obligations.

Conclusion

Once you grasp the critical terminologies involved in mortgages, the process of getting a house in Canada will be more transparent.

Explore more about Mortgage in Canada at our site Best Mortgage Online.

Categories
New Purchase Mortgage

Applying for Mortgage in Canada: A Step-by-Step Guide for Homebuyers

The dream of homeownership in Canada is alive and well. According to a recent Royal LePage survey, it’s what nearly half of Canadians older than 25 years old want. However, today’s housing market can be very different from what you have known before if you come from a country with a subsidized or socialized housing sector. 

The purpose of this guide is to give you an understanding of the mortgage process in Canada and help you choose a home that fits your budget.

If you are reading this, there’s a good chance that your new life in Canada starts with buying a house. In fact, for many people, it’s the biggest purchase they will ever make, so it’s essential to find out as much as possible. This article will help you through the process and eliminate some of your concerns about mortgages in Canada.

Understanding Mortgage Terminology in Canada

Before you start the process of applying for a mortgage, there are some key terms you should understand. Once you know what they signify, it will be easier to decipher information about mortgages provided by banks, real estate agents, and other professionals who deal with them daily.

Some might sound familiar, while others could be entirely new for you. Below are some of the essential terms you should know before applying for a mortgage.

  • Principal: The principal is the amount of money borrowed, not including interest or fees. Therefore, if you borrow $300,000 at 5% p.a., your principle is $300,000.
  • Interest Rate: Interest is the money charged for borrowing your money. Most loans have an interest rate, usually expressed in percentage per year.
  • Fixed-Rate Mortgage: The interest rate you sign up for in your mortgage agreement will remain unchanged throughout the term of your mortgage.
  • Variable-Rate Mortgage: Variable-rate mortgages are where the interest rate is not fixed and may fluctuate according to a predetermined formula.
  • Collateral: Collateral refers to any guarantee you provide if you cannot make your monthly payments or default on any of the terms and conditions in your mortgage agreement. For example, a common form of collateral has a second property that you own and can be sold to cover the unpaid portion of your loan.
  • Mortgage Term: Most mortgages in Canada are closed-term (have a predetermined term that cannot extend) and fully amortized, which means you make equal monthly payments of principal and interest to reduce your balance.
Best Mortgage Online

Types of Mortgages

When you go through purchasing a home, the lender will consider your financial position (income, credit rating, debts), the type of property you plan to buy (for example, single-family dwelling or condo), and your timeframe for repayment. Once they understand all of these parameters, they will suggest different mortgages based on their requirements.

Depending on your needs, your lender can offer you a variety of mortgages with different terms and conditions depending on your financial situation. However, some of the most common types that are recommended for first-time buyers are:

Conventional Mortgage

A conventional mortgage does not require any additional insurance coverage to assure the risk of default. In addition, homestead protection is automatically included in this type of mortgage which means you cannot be forced to sell your home in case of default.

High Ratio Mortgage

A high ratio mortgage has a down payment requirement between 5% and 19.99%. In Canada, most lenders require you to have at least 5% of the purchase price of the cash home, with the remaining amount financed through a mortgage loan.

Mortgage Loan Insurance

In case you have a down payment of less than 20% for purchasing your home, your lender will require additional insurance coverage to protect against default. Mortgage loan insurance protects lenders against loss in cases where mortgage payments are not made.

Conventional High Ratio Mortgage

Conventional high ratio mortgage is a recommended type of mortgage for first-time buyers that features a down payment of more than 5% with the balance financed through a mortgage.

Mortgage Pre-approval Process

Once you have finally found the perfect property for you and discussed the price with the real estate agent, it’s time to approach a lending institution to pre-approval your mortgage. Your lender will do a complete assessment of your financial position and ask all the necessary questions to determine how much money they are willing to lend you.

The lender will use different ratios to determine your eligibility for a mortgage. For example, your gross household income ratio compared to your fixed monthly debt payments, including the new home purchase, should not be more than 32%.

The pre-approval process is usually completed within 48 hours, depending on what type of property you are buying and whether it requires additional approvals from a strata board or not.

Mortgage Application Process

Once you have been approved for a mortgage, the lender will provide you with a document called a ‘vesting letter’ that will include your name and the property address, as well as the maximum amount they are willing to lend you. Next, go ahead and sign a purchase agreement with the seller and ask your real estate agent to forward the listing information to your lender.

You will have to provide the lender with copies of all documents related to the sale of your home, including any offers you have received from other buyers. The offer copy must include how much money they are willing to pay for the property and the closing date. Lenders also require a copy of your last mortgage statement to determine what kind of terms you had on your previous mortgage and how much equity is available in your home.

They will then provide the necessary funds to the vendor (seller), who will pay off their existing mortgage with their financial institution. All that’s left is waiting for the title transfer and your mortgage funds to be released. It usually takes between 15 and 45 days, depending on what province or territory you buy real estate.

Closing Thoughts

There’s no such thing as a dumb question in buying your first home. Do not hesitate and ask away if you feel like you are bothering the lender with too many questions. Also, you can expect some surprises since things always take longer than expected, and the lender will probably ask you for additional documents to be submitted.

Best Mortgage Online can help you search for home loans in Canada, contact us at 1-855-567-4898 (toll free).

Categories
New Purchase Mortgage

Crucial Things to Consider for Private Mortgage Insurance

There is often much to worry about when purchasing a home for the first time. After all, every buyer wants to pick the right neighbourhood, pay the mortgage rate at the lowest price possible, and get in touch with a property that meets all your needs and expectations.

However, saving adequate funds for a sizeable deposit may hinder Canadians from getting the house of their dream. This is where the private mortgage insurance (PMI) comes in to assist you in getting a mortgage you could not qualify for.

So, what is private mortgage insurance in Canada? Moreover, what should you consider when looking for one?

Find out more about it and more in this article.

Meaning of Private Mortgage Insurance

PMI stands for Private Mortgage Insurance, a type of insurance coverage that lenders need if they notice that the loan borrower does not meet the down payment set by the Housing Finance Policy.

So, in case you have not accumulated enough cash to make the standard 20% down payment as per the Housing Finance Policy Center, then you need the assistance of PMI. 

Private mortgage insurance will assist the buyer in purchasing a without having to wait until the full 20 percent down payment is raised. However, you will still need to consider a few things when finding private mortgage insurance, such as those covered in this article.

Importance of Private Insurance Mortgage

In a real sense, mortgage insurance is not meant to protect the buyer but to protect the lender from massive loss of finances instead, especially if the buyer fails to repay the mortgage. PMI fills the gap of covering the loss if the property goes into foreclosure or a short sale auction.

PMI also comes when the buyers will not afford the 20% down payment set or want to draw off their savings for other homeownership bills. In such circumstances, lenders may still chip in and offer them a conventional mortgage provided they take out PMI.

The lenders make all these arrangements, and the private insurance firms do the issuing. According to recent statistics, most Canadian residents acquire homes by paying a certain percentage of the home buying price. The remaining portion is usually borrowed from mortgage lenders as conventional loans.

However, since private insurance companies do the issuing, there is a need to find the right and reliable insurer in the market. With that said, if you reside in Canada and its environs, you need not hesitate to call Insurance Direct Canada brokers to help you secure the conventional loan with ease.

Best Mortgage Online

Determination of Private Mortgage Insurance Cost

PMI costs vary depending on a specific lender and the money put down the mortgage plan. The cost variations usually are influenced by some factors such as mortgage size, loan-to-value ratio, down payment, and credit score. 

PMI is usually expressed as a percentage of the total mortgage, ranging between 0.58 and 1.86 percent. So, the higher the mortgage, the more is the PMI and vice versa.

The client loan-to-value (LTV) is another factor that influences the PMI cost. This represents the mortgage when compared to the total value of the property. 

A higher LTV is obtained through borrowing less and increasing the down payment, and vice versa. In this case, a lower LTV typically poses a higher risk for the lenders, which is why the PMI cost increases as the LTV decreases.

Your credit score is also another factor that significantly influences the PMI cost. If your credit score is higher, the fewer are the risks to the lenders. That’s why it’s often easier to qualify for a lower PMI if your credit score is excellent.

Likewise, buyers with good credit scores are also subjected to lower PMI premiums than buyers with lower scores. Other aspects which influence the PMI cost include:

  • Fixed or adjustable interest rate
  • Coverage amount
  • The period for the loan term

Private Mortgage Insurance Payment Options

The PMI payment options differ from one particular lender to another. Some lenders have different payments options, while others set a fixed policy. In a nutshell, most clients pay for the PMI payments in two popular ways.

The first one is the annual lump sum payment called the single-payment mortgage insurance. Meanwhile, the second one is a monthly payment referred to as borrower-paid mortgage insurance

Single-Payment Mortgage Insurance

After the loan closes, the payment is made in one fell swoop for the single premium mortgage. Since you’re paying upfront, this will reduce the entire monthly payment. 

Of course, this type of payment is a bit tricky if you are cash-trapped. Moreover, the lump sum payment may be disadvantageous for clients who want to refinance or sell their property as it is non-refundable.

Borrower-Paid Mortgage Insurance

Meanwhile, the borrower-paid mortgage insurance as the second option is usually subjected to your monthly mortgage payments, making the expenditures more palatable. 

In this case, the hybrid payment usually integrates the two options. The client partially makes the payment, and the remaining amount is subjected to the monthly mortgage expenses.

After the lenders settle on the PMI payments, you need to inquire about the different payment options. 

Moreover, it’s best to ensure the lender offers you a cost breakdown for every possibility to help you make a well-informed decision regarding the most cost-effective choice that fits your budget.

How to Get Rid of Private Mortgage Insurance

Luckily, there are proven ways to eliminate PMI if you need to pay it now. 

  • First and foremost is to make payment consistently until you get to 20 percent equity in your property or attain 80 percent LTV. This is the point at which you will need to contact the lender to cancel the PMI upon verifying that you have indeed qualified.
  • Another circumstance in which you can get rid of the PMI is when the home value has increased, and the client has more than 20 percent equity. This is when the LTV reaches the 80 percent mark, and you can request for home value reappraisal and cancel the PMI.
  • The third situation is when the client’s cash flow rises unexpectedly and paying the mortgage becomes faster. You can make additional payments towards the mortgage, raising the LTV more quickly, thereby cancelling the PMI.

Conclusion

When purchasing a property, it’s best to inquire with your lender regarding the process of how they deal with mortgage insurance and the PMI payment options to avoid encountering any inconveniences. 

With that said, Insurance Direct Canada is your reliable insurance broker if you want to pick the best and cost-effective payment option. Visit their site for any queries, as well as mortgage-related quotes and advice.