Using a Notary to Refinance Your Mortgage in Vancouver, BC

Public notaries have a vital role to play in refinancing mortgages for Vancouver homeowners.

As you seek to optimize your financial situation, understanding the nuances of mortgage refinancing is crucial. A notary’s expertise in legal documentation and financial transactions ensures a smooth and legally sound process. 

In this article, we explore the benefits of refinancing, the responsibilities of public notaries, and the specific considerations for Vancouver residents. 

Join us as we navigate the intricacies of mortgage refinancing with the guidance of experienced notaries, empowering homeowners to make informed decisions and secure their financial futures.

Reasons For Refinancing Your Mortgage

In Vancouver, BC, homeowners may consider refinancing their mortgage for various reasons.

One primary motivation is to take advantage of lower interest rates. By refinancing to a lower rate, homeowners can reduce their monthly mortgage payments, ultimately saving money over time.

Refinancing can be a strategic move to consolidate high-interest debt, such as credit card balances or personal loans, into a single, more manageable payment with a lower interest rate.

Additionally, Vancouver’s competitive real estate market often sees property values appreciate over time. Homeowners may choose to refinance to access their home’s equity, allowing them to fund home renovations, education expenses, or other significant investments. 

Refinancing can also offer an opportunity to switch from an adjustable-rate mortgage to a fixed-rate mortgage, providing stability and predictability in monthly payments. 

Ultimately, refinancing presents a valuable financial tool for Vancouver homeowners looking to optimize their mortgage terms and economic well-being.

What Does a Notary Public Do?

A public notary serves as a legal professional authorized to perform various official duties, primarily related to the authentication and certification of documents. 

The primary responsibilities of a public notary include verifying the identity of signatories, witnessing the signing of legal documents, and administering oaths and affirmations. Notaries also certify the authenticity of signatures and documents by affixing their official seal or stamp.

Beyond document authentication, notaries may also draft and prepare legal documents such as wills, contracts, and powers of attorney. They ensure that these documents comply with legal requirements and accurately reflect the intentions of the parties involved. Additionally, notaries may provide services related to real estate transactions, such as verifying property deeds and mortgage documents.

The role of a public notary is crucial in facilitating legal transactions, safeguarding against fraud, and ensuring the validity and integrity of important documents within the legal system.

Role of a Notary Public in Real Estate Transactions

In real estate transactions, a public notary plays a critical role in ensuring the legality, accuracy, and authenticity of various documents involved in property transactions. 

Their responsibilities include verifying the identity of parties involved, witnessing the signing of contracts, deeds, and other legal documents, and certifying the authenticity of signatures through their official seal or stamp. Notaries also ensure that all documents comply with legal requirements and are executed in accordance with applicable laws and regulations.

Additionally, public notaries may conduct title searches, verify property ownership records, and prepare or review legal documents such as deeds, mortgages, and lease agreements. The role of a notary is essential in providing an extra layer of security and trust in real estate transactions, helping to prevent fraud, errors, and disputes while facilitating smooth and legally binding property transfers.

Requirements for Mortgage Refinancing in Vancouver, BC

Refinancing a mortgage in Vancouver typically involves meeting certain requirements set by lenders and financial institutions. While specific criteria may vary depending on the lender and individual circumstances, common requirements for mortgage refinancing in Vancouver often include:

  • Sufficient Equity: Lenders typically require borrowers to have a certain amount of equity in their home, usually at least 20% of the property’s current appraised value. Higher equity may result in more favorable refinancing terms.
  • Good Credit Score: A strong credit history and high credit score are often prerequisites for mortgage refinancing. Lenders assess creditworthiness to determine the risk of lending and may offer better rates and terms to borrowers with excellent credit.
  • Stable Income: Lenders typically require borrowers to demonstrate stable employment or income to ensure they can afford the refinanced mortgage payments. This can be proven in several ways but most commonly via tax documents. 
  • Debt-to-Income Ratio: Lenders evaluate borrowers’ debt-to-income ratio, which compares their monthly debt payments to their gross monthly income. A lower ratio indicates better financial health and may improve refinancing eligibility.
  • Property Appraisal: Lenders may require a new appraisal of the property to assess its current value accurately. The property’s value influences the loan amount and terms offered during refinancing. Improving, upgrading, or renovating a home can help improve its value. 
  • Documentation: Borrowers must provide various documents, including proof of income (pay stubs, tax returns), bank statements, and identification, to support their refinancing application. Without this documentation, the process cannot move forward. 
  • Closing Costs: Refinancing typically incurs closing costs, including appraisal fees, application fees, legal fees, and mortgage registration fees. Borrowers should be prepared to cover these costs or negotiate them into the refinanced loan.
  • Loan-to-Value Ratio: Lenders may have maximum loan-to-value (LTV) ratio requirements, limiting the amount borrowers can refinance relative to the property’s appraised value.

Meeting these requirements demonstrates financial stability and responsibility, increasing the likelihood of approval for mortgage refinancing in Vancouver, BC. Borrowers should research and compare offers from different lenders to find the best terms and rates suitable for their financial situation. 

Final Thoughts: Refinancing Your Mortgage with a Notary in Vancouver, BC

Refinancing your mortgage offers many opportunities to increase your financial stability and increase your personal funds and working capital. 

To refinance your mortgage with a notary in Vancouver, BC, follow these five key steps:

  1. Research Local Notaries: Find a reputable notary public experienced in real estate transactions, particularly mortgage refinancing.
  2. Initial Consultation: Schedule a consultation to discuss your refinancing needs and review relevant documents. Ask any questions you may have regarding the refinancing process. 
  3. Document Preparation: Work with a notary to gather and prepare necessary documents, including identification, mortgage statements, and financial records.
  4. Signing Appointment: Arrange a signing appointment with the notary to sign the refinancing documents and have them notarized.
  5. Finalize Refinancing: The notary ensures all documents are properly executed and submitted to the lender for finalization of the refinancing process.

Remember, the key to a smooth refinancing process is a reliable public notary!

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Finding a Notary for Real Estate Closings in British Columbia

If you are buying or selling property in British Columbia, finding a reliable notary is a major step towards completing a real estate transaction. A notary plays a key role in real estate transactions, ensuring a smooth and legally sound closing process for buyers and sellers. 

But what, exactly, does a notary do — and what qualities should you look for in a notary?

In this blog, we help you navigate finding the right notary for your next real estate transaction in British Columbia. Whether you are a first-time homebuyer or a real estate investor, this guide is here to help you better understand the role of notaries in the process. 

Read on to discover everything you need to know about real estate notaries in British Columbia!

Real Estate Closings: Understanding the Process & the Role of Notaries

In British Columbia, a real estate closing involves several key steps culminating in the legal transfer of property ownership from seller to buyer: 

  1. Drafting the Sales Terms: After reaching a sales agreement, a contract of purchase and sale is drafted outlining terms and conditions agreed upon by both parties. 
  2. Hiring a Notary or Lawyer: Next, the buyer typically provides a deposit, held in trust until closing. Both parties then enlist legal representation, often in the form of a real estate lawyer or notary public, to facilitate the closing process.
  3. Completing Buyer Due Diligence: Prior to closing, the buyer conducts due diligence, which may include a home inspection and finalizing mortgage financing. Title searches and inquiries are performed to ensure there are no liens, unpaid taxes, or legal issues with the property. 
  4. Signing Legal Documents: At closing, the buyer and seller, along with their legal representatives, meet to sign all necessary documents, including the transfer of ownership deed, mortgage documents, and any additional agreements. Funds are exchanged, typically facilitated by the buyer’s lawyer or notary, who ensures all financial transactions are completed securely. 
  5. Transferring the Title: The last step in the process involves the lawyer or notary registering the transfer of title with the Land Title and Survey Authority, officially completing the transaction. Upon registration, the buyer becomes the legal owner of the property, and any applicable taxes or fees are settled. 

How Notaries & Lawyers Differ at Real Estate Closings

A notary is a legal professional authorized to handle certain legal matters, including real estate transactions. Their role in real estate closings involves ensuring the legality and validity of the transaction documents and facilitating the transfer of property ownership from seller to buyer.

In British Columbia, notaries have the authority to draft and certify legal documents, including purchase contracts and mortgage agreements. They conduct due diligence by verifying the title of the property and ensuring that all necessary paperwork is properly executed and filed. 

Notaries also oversee the transfer of funds between parties, ensuring a secure and transparent transaction.

While both notaries and lawyers can handle real estate closings in British Columbia, there are some differences in their roles. Notaries primarily focus on document preparation, verification, and financial transactions, whereas lawyers may offer more comprehensive legal advice and representation in complex matters such as disputes or litigation related to the transaction. 

However, both professionals are qualified to facilitate real estate closings, providing buyers and sellers with peace of mind and legal protection throughout the process.

What Documents Need Notarization at a Real Estate Closing?

During a real estate closing, several documents require notarization to facilitate the transaction. 

The primary document notarized is the transfer of title deed, which legally transfers ownership of the property from the seller to the buyer. This document outlines the details of the property, including its legal description, and is signed by both parties in the presence of a notary public.

Additionally, mortgage documents are notarized to finalize the financing arrangement between the buyer and the lending institution. These documents typically include the mortgage agreement, promissory note, and any other related paperwork, all of which require notarization.

Other documents notarized at closing may include the purchase contract, which details the terms and conditions of the sale agreed upon by the buyer and seller, as well as any additional agreements or disclosures required by law. 

Notarizing these documents adds an extra layer of legal protection for all parties involved in the real estate transaction, safeguarding their interests and ensuring compliance with provincial regulations. 

Final Thoughts: Choosing the Best Notary for Your Real Estate Closing

Choosing the best notary for a real estate closing in British Columbia involves several key considerations:

  • Qualifications and Experience: Look for a notary public who specializes in real estate transactions and has extensive experience in handling similar closings in your region. Verify their credentials, including their education, licensing, and professional affiliations.
  • Reputation and Reviews: Research the reputation of potential notaries by reading reviews and testimonials from past clients. A positive reputation and track record of successful closings indicate reliability and competence.
  • Communication and Accessibility: Choose a notary who is responsive to your inquiries and readily available to address any concerns throughout the closing process. Effective communication is essential for a stress-free closing experience.
  • Transparency and Fees: Inquire about the notary’s fee structure upfront to ensure transparency and avoid any surprises. Compare pricing among different notaries, but prioritize value over solely focusing on cost.
  • Professionalism and Personal Fit: Assess the notary’s professionalism, demeanor, and interpersonal skills during initial consultations. Choose someone with whom you feel comfortable working closely on such an important transaction.

By carefully evaluating these factors and conducting thorough research, you can select the best notary to handle your real estate closing in British Columbia.

Choose David Notary for Notary Services in Vancouver

For comprehensive notary services you can trust, choose David Notary, located in downtown Vancouver. Our notary team can help ensure your real estate closing runs smoothly and efficiently, getting you the legal verification you need for your property sale or purchase.

Contact David Notary today to get started.

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How to Pick the Right Realtor

How to Pick the Right Realtor

Finding a Real Estate Agent is almost like finding a partner—you may need to go on a few dates before finding “the one.”

Like in dating, it’s important to know what you’re looking for in a Real Estate Agent. There’s a lot riding on your relationship with this person; you don’t want to invest time and energy in someone you won’t be able to trust.

Regardless of whether you’re looking to buy or sell a property, finding the right Realtor can make a huge difference in your happiness and your finances.

WHAT DOES A GOOD REALTOR DO?

A Real Estate Salesperson, also known as a Real Estate Agent or Realtor is a licensed professional who assists people in real estate transactions.

In British Columbia, these professionals are regulated by the Real Estate Council of B.C., an organization that licenses and trains Realtors.

There are plenty of licensed professionals in the province, but not all of them are good.

Here are traits that you should look for in a Real Estate Agent with real estate expertise:

  • They are always one step ahead of you. You never have to follow them up for the next steps; they are on top of it.

  • They listen. They understand what you are looking for and your unique situation, and they look for solutions in the home-buying process.

  • They focus on communication. You are never left wondering what is going on; they keep you up to date, even if the update is that nothing has happened yet since the last update.

  • They deliver on their promises. They do what they say they are going to do when they say they are going to do it in real estate transactions.

PICKING THE RIGHT ONE

British Columbia’s real estate market is saturated with Realtors and other real estate agents.

According to the Real Estate Council of B.C., in 2016 there were 23,366 licensed Realtors in the province. This adds up to nearly 1 Real Estate Agent for every 200 people.

Why should you care about this?

Because it means that Realtors are in intense competition with each other, making BC a buyer’s market when it comes to hiring Realtors.

This means that you have the upper hand when it comes to choosing a Real Estate Agent. Much like if you were hiring any other employee, it’s important that you know exactly who you are hiring, especially when considering their real estate broker license.

That’s why, if you want to pick the right Real Estate Agent for you, you should do the following things…

RESEARCH AND ASK FOR REFERRALS AND REFERENCES

Make a list of the Realtors you may know, find, and who are referred to you. If you have colleagues or friends who have bought a home recently, ask how they liked working with their Realtor and who they were.

Ask your BC Notary, lawyer, or mortgage broker for a referral for people they have worked with. They should be able to tell you fairly quickly who they know, like, and trust in real estate transactions.

You can also search online to find Realtors in your area. Be aware, however, that just because someone is good at being found online doesn’t necessarily mean that they are a good Realtor.

We know a number of Realtors and would be happy to provide some names to help you find the right fit. Before you start talking to potential Realtors, it’s important that you do some preliminary research through online reviews.

Search online. A quick Google search will give you the names of Realtors in your neighborhood. More popular Realtors may even have online reviews posted online. Read these reviews and come up with a list of six or seven Realtors in your area that may look promising.

Talk to your neighbors, friends, & colleagues. Once you’ve created a shortlist of potential Realtors, talk to people you know. Ask your neighbors if they have worked with anyone on your list, and see if they have anyone else to recommend. If someone has had anything less than a good experience with a Real Estate Agent, immediately cross them off the list.

Reach out to the Realtors. Once you have a set list of potential Realtors, it’s time to contact them. See what kind of vibe you get, and ask for references from previous clients. If you get a good vibe, keep them on the list if you don’t cross them off in the entire process.

INTERVIEW, INTERVIEW, INTERVIEW

Whether you are selling or buying, it’s important to always interview at least three Realtors, especially when discussing the selling price and listing price.

These interviews may seem intimidating at first, but remember, you are in control. They have to impress you, not the other way around.

These interviews are important to figure out if the Real Estate Agent has the perfect balance between credentials and chemistry. You also need to absolutely trust your Realtor.

During each interview, make sure you ask yourself if this is a person you like and trust–and don’t forget to ask them the following five questions regarding prospective buyers:

FIVE KEY QUESTIONS TO ASK A POTENTIAL REALTOR

HOW WELL DO YOU KNOW THE REGIONAL MARKET?

Experts recommend that you stick to Realtors who work within a 15-kilometer radius of the listed home. This ensures that they know the area and the market well.

HOW MANY LISTINGS DO YOU HAVE?

Figuring out how many listings a Real Estate Agent has will give you an idea of the kind of attention you’ll get from them.

A Realtor with too many listings will be stretched too thin. This means that they may not be able to help you when you need it. At the same time, too few listings may be a sign that there’s something wrong with that person regarding how many clients they attract.

What’s the magical number then?

It’s hard to say, but experts suggest that anywhere between 10 and 15 listings will allow your Real Estate agent to pay attention to you.

WILL YOU HANDLE MY LISTING PERSONALLY?

There’s nothing wrong with hiring a Real Estate Agent that has a lot of listings. In fact, sometimes it’s good to get high-profile Real Estate Agents who can help sell a property with their own name.

If that’s the case, it’s often likely that the Realtor will not be handling your listing personally.

Some people are often caught off guard when they hire a Real Estate Agent but instead, end up working with a member of their team. Some Realtor teams have designated individuals to work with buyers and some sellers; you get the benefits of the knowledge of the team and the individual attention of the team member specializing in what you need in real estate expertise.

Make sure you know if the Real Estate Agent will be handling your listing personally or relying on team members.

WHAT IS YOUR COMMISSION?

It’s important that you know exactly how much you’ll be paying a Real Estate Agent prior to hiring their services in real estate transactions. Most often in British Columbia, the Seller pays the Realtor’s commission.

Here are a few questions you should definitely ask potential Real Estate Agents before you hire them.

What is their commission structure?

What are marketing costs?

Are there extra costs for things like home staging in the home-buying process?

Figuring these things out will help add to your understanding of the real estate transaction and help you choose the right real estate for you.

WHAT’S THE STRATEGY?

Most Realtors will have a strategy to help you buy or sell a property before meeting with you. Great Real Estate Agents are able to explain this strategy to perfection.

When you’re interviewing potential Real Estate Agents, make sure to ask them about strategy, and see what they bring to the table.

In the end, you’ll want to choose someone who is prepared and knows exactly what they need to do to help you; and who you think you can trust in real estate transactions.

CONSTANTLY REVIEW YOUR RELATIONSHIP

Once you’ve selected a Real Estate Agent, it’s extremely important to maintain an ongoing review of your working relationship with them.

Sometimes Real Estate Agents put in a lot of work initially, but their efforts peter out over time in real estate transactions.

Being open about any problems or issues you are facing is crucial to building a successful working relationship with your Real Estate Agent.

By reviewing the relationship, you stop your time and energy from being wasted with someone who isn’t right for you, allowing you to find the right Real Estate Agent. If find out you are not happy after working with someone, you can find a new Realtor in the entire process.

While relationships with Real Estate Agents can sour, following the steps outlined above and asking the right questions before you settle on a Realtor will give you a better chance to find “the one” on your first attempt!

If you have any questions or would like a referral for a Real Estate Agent in your market, please reach out.

Summary of Our Key Tips to Finding the Right Realtor

Understanding the Role

A Real Estate Agent is a licensed professional who aids in real estate transactions, regulated by the Real Estate Council of B.C.

Traits of a Good Realtor

Look for qualities like proactiveness, listening skills, effective communication, and reliability in your Real Estate Agent.

Market Competition

British Columbia has a high number of Realtors, making it a buyer’s market. This means you have the upper hand in choosing the right Real Estate Agent, so make informed decisions.

Research and Referrals

Build a list of potential Realtors through recommendations from friends, professionals, and online research. Don’t solely rely on online presence; verify their credentials.

Interview Multiple Realtors

Always interview at least three Realtors. It’s your opportunity to evaluate their credentials, chemistry, and trustworthiness.

Five Key Questions

During interviews, ask essential questions: Know their knowledge of the regional market, how many listings they handle, whether they’ll handle your listing personally, their commission structure, and their strategy.

Understanding Costs

Be clear on the costs involved, including commissions, marketing expenses, and potential additional costs like home staging.

Constantly Review the Relationship

After selecting a Real Estate Agent, maintain ongoing communication. If issues arise, address them promptly to ensure a successful working relationship.

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5 Important Reasons The Best Power Of Attorney Is A Neutral Third Party

5 Reasons The Best Power Of Attorney Is A Neutral Third Party

Finding the right person to grant power of attorney to isn’t always easy. This person will manage your financial and legal interests and will hold significant power over your future.

They’ll also be there to take on a lot of responsibilities and will need to navigate complex bureaucracy to effectively manage your affairs.

That’s why it’s important that you grant power of attorney to someone who you trust deeply. They need the skills and experience to represent your interests if you can no longer do so yourself.

While some people choose family members or friends to act as their attorneys, that’s not always the best option.

You might not have anyone you trust or who has the qualities and skills needed to do the job.

In those cases, choosing a family member or friend to act as an attorney isn’t the best option – the best power of attorney is a neutral third party.

WHAT IS EXACTLY IS A POWER OF ATTORNEY?

A power of attorney legal document and is extremely important.

This legal document allows you to authorize someone else with the legal authority to sign documents and act on your behalf. The power applies to financial or legal issues, and can also be used to buy and sell assets and sign tax returns if you are out of town or incapacitated.

It doesn’t, however, apply to health care decisions (you’ll need a Representation Agreement for that).

The power granted can take one of two forms:

  • Specific Power of Attorney: This type of power of attorney allows you to choose someone to manage your affairs for a specific purpose and time period (to authorize someone to sign a legal document when selling a specific asset, for instance).

  • Enduring Power of Attorney: This type of power of attorney allows you to choose an attorney who will take control of all your legal and financial matters if something were to happen to you. They receive enduring or continuing power over your affairs if you become incapacitated or pass.

A power of attorney agreement can be canceled at any time and customized to your specific needs and desires.

Types of Power of Attorney

WHY DO YOU NEED A POWER OF ATTORNEY?

A power of attorney guarantees that someone you trust will control your finances and have the legal authority to act on your behalf if you were to become suddenly physically or mentally incapacitated.

You should seriously consider granting a power of attorney if you:

  • Want to make sure that someone you trust takes care of paying bills and managing your finances if you are mentally incapable or out of town.

  • Are getting older and want to put a safeguard in place should something unexpected happen.

  • Believe that you may need help managing your own affairs now or in the future.

  • Are planning to sell a property or asset while living overseas or traveling.

  • Are in the early stages of Alzheimer’s, other forms of dementia, or degenerative diseases.

WHO CAN YOU APPOINT AS YOUR ATTORNEY?

The only people who can’t be appointed as your power of attorney are people who you pay to be your caregivers.

Otherwise, anyone over the age of 19 who is able to understand the responsibilities involved can do it.

When acting on your behalf, your attorney must act honestly, in good faith, and in your best interest. They must also make sure to keep records of any financial and legal decisions made on your behalf.

Because your power of attorney will have broad powers, it is important to choose somebody you trust and who is comfortable with your financial affairs.

That’s why you’ll want to ask yourself the following questions before settling on an attorney:

  • Are they knowledgeable about taxes and responsibilities?

  • Are they organized and meet deadlines?

  • Will they be willing to devote their time to manage your affairs?

  • Can they set their emotions apart and get the job done?

  • Do you want to burden them with the responsibility of managing your financial and legal interests?

Before Choosing A Power Of Attorney

A lot of people fail to ask these questions and choose their spouse, a family member or a friend to act as their attorney. While on paper this may sound like a good decision, loved ones aren’t always the best choice for power of attorney.

They may not have the experience or expertise required to do the job, or may not be able to handle the many responsibilities that go with being an attorney.

That’s why a trusted professional or company is a great alternative.

Experienced professionals who act in your best interests may be a great option to consider. Since they fully understand the rules and responsibilities of being an attorney, they are your best choice to make sure that all your affairs are handled in a timely and efficient manner.

At David Watts Notary Public, we can act on your behalf as your power of attorney; or find someone who is appropriate for you.

WHY YOU SHOULD GRANT POWER OF ATTORNEY TO A NEUTRAL THIRD PARTY

1. THEY HAVE THE RIGHT SKILLS

Professionals who have the skills and knowledge to be great attorneys may be notary publics, lawyers, and accountants who work together to make sure all aspects of your affairs are dealt with.

2. THEY UNDERSTAND THEIR RESPONSIBILITIES

Choosing a loved one as your attorney means burdening them with a number of new responsibilities that they may not understand or want.

Neutral third-party attorneys are well aware of their responsibilities and know how to navigate legal and financial bureaucracy.

3. EFFICIENCY

Having the right skill set and understanding the responsibilities of being an attorney allows professionals to act effectively on your behalf, making sure your legal and financial affairs are dealt with in a timely and cost-effective manner.

4. THEY’RE FAMILIAR WITH YOUR FINANCIAL SITUATION AND OBLIGATIONS

Being familiar with the person’s overall financial picture and obligations makes it much easier for a third-party attorney to make correct decisions on your behalf.

5. THEY AREN’T CLOUDED BY EMOTIONS

Managing someone’s financial affairs is never easy, but it gets even harder when emotions are involved. That’s why choosing a family member to be your attorney may actually cause more pain than you intended.

Settling on a professional to act as your attorney will help balance emotions in the way in which your bank accounts are administered.

HOW DO I GRANT POWER OF ATTORNEY?

In British Columbia, granting a power of attorney to someone is not a difficult process, and information is readily available.

Getting professional help from a BC Notary or lawyer will allow you to get good advice on how to successfully create a power of attorney document, grant power in a way that is legally binding, and who to grant it to.

Get in touch if you have questions or need help deciding who should be your Power of Attorney.

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When Do You Need to Hire a Notary?​​​​​​​

A notary public (also known as a notary), is a trained professional who can provide limited legal services to the public.

Notaries have been around for a long time. Babylonian notaries chiseled the oldest written law into stone over 4000 years ago. At that time, a notary was a wise and trusted member of society. The role of a notary was to oversee transactions and guarantee their fairness.

The role has since evolved into a professional service, but its essence is still the same. In today’s times, a notary public still guarantees clients the fairness and legality of transactions.

WHEN DO YOU NEED A NOTARY?

woman signing papers

There are a number of scenarios in which you would benefit from a notary. Our team at David Watts Notary Public can assist with:

1. Real Estate Transactions

If you’re on the cusp of either buying or selling a property, a notary plays a pivotal role. A notary public will ensure that all the documentation is in order, legally binding, and properly executed. This is crucial in preventing any future legal hiccups.

2. Property Transfers

Planning to transfer property ownership to a family member? This is another scenario where notarial services are invaluable. A notary public will be able to help you navigate the complex legal landscape, ensuring that the transfer is done correctly and legally.

3. Mortgage Processes

Entering the world of mortgages can be daunting. A notary can guide you through the process, ensuring that all agreements and contracts are legally sound and that your rights are protected.

4. Estate Planning

When it comes to preparing crucial documents like wills, representation agreements, or powers of attorney, working with a notary is not necessary, but highly recommended to avoid potential disputes. A notary public will make sure that your wishes are clearly articulated and legally enforceable.

5. International Travel with Children

If you or your spouse plan to travel abroad with your kids, especially without the other parent, notarized consent is often required. A notary will be able to provide you with the necessary legal backing for such documents.

6. Signing Affidavits

Affidavits are sworn statements used in various legal settings. A notary ensures that these are signed in accordance with legal standards, lending them the required authenticity and validity.

7. Moving Abroad

If you’re relocating to another country, you’ll likely need various documents notarized. A notary public ensures that your documents are accepted internationally, adhering to the legal standards of your destination country.

Many people think that they should hire a lawyer instead of a notary to do these things. I’ve written about the difference between lawyers and notaries in the past, but here’s what you need to know in a nutshell:

A notary public specializes in non-contentious matters, dealing with documents and transactions where there is no dispute or need for legal representation in court. Our expertise lies in ensuring that your documents are legally sound and your transactions are executed smoothly.

British Columbia notaries are experts in the areas we choose to practice.  

If we act for you as a notary in business agreements or residential real estate transactions, our experience will help us to identify issues and deal with them before they become problems.

The Difference Between Lawyers and Notaries

If we do get to a place where litigation is necessary, we are here to help you find a lawyer who can provide legal advice and assistance. We have a community of trusted legal professionals who are experts in litigation.

WHAT CAN BC NOTARIES DO FOR YOU?

woman with notary seal

BC Notaries have professional standards dictated by the Notaries Act of British Columbia. A notary is also governed by the rules, by-laws, and best practices dictated by The Society of Notaries Public of British Columbia.

That means that at David Watts Notary Public we are a team of certified experts and can help you with all your notary needs.

1. REAL ESTATE TRANSFERS

A notary public can help you complete legal documents for real estate transactions such as Purchases, Sales, Mortgages and Family Transfers. By working with a notary, you are ensuring a smooth and legal transition or purchase of property.

2. PERSONAL PLANNING DOCUMENTS

A notary can help clients prepare for the future with Wills, Powers of Attorney, and Representation Agreements. By having these important legal documents notarized, you will help ensure their legitimacy and ability to be held up in a court of law.

3. NOTARIZATION

A notary public can provide General Notarizations and Certified True Copies of Original Documents as well as Notarize your signature on:

  • Travel Letters

  • Affidavits

  • Statutory Declarations

  • Letters of Invitation

  • Passport Documents

  • Various Applications

4. INTERNATIONAL AUTHENTICATION AND LEGALIZATION SERVICES

A notary can get documents authenticated and legalized for use in Canada and around the world.

DAVID WATTS NOTARY PUBLIC: NOTARY SERVICES COST

Below is a list of our fees and additional information regarding our notary services. If you have any questions regarding our fees, please contact us. 

NOTARIZATION COST

  • Cost for Certified True Copies of documents: $60 ($53.57 + GST & PST)

  • Additional documents or copies: $20 each

MULTIPLE EXHIBITS:

  • For documents with multiple exhibits, we charge $20 per exhibit after the 4th.

INTERNATIONAL OR REAL ESTATE DOCUMENTS:

  • For documents to be used outside of Canada, or involving real estate purchases, sales, or mortgages, please email us for a specific quote.

PLEASE NOTE:

  • Ensure to print and bring the documents.

  • Bring 2 pieces of unexpired identification, with at least one being government-issued with a photograph.

NOTARIZED AND CERTIFIED TRUE COPIES

CERTIFIED TRUE COPIES COST:

  • First copy/document: $60

  • Additional copies: $20 each

PROVIDING COPIES:

  • You can bring the original documents, and we can make the copies here.

  • If you prefer, you can bring your own copies.

PRINTING CHARGES:

  • For more than 10 pages, we charge $1.00 per page.

GET IN TOUCH – DAVID WATTS NOTARY PUBLIC

To find out more information about our notary services, receive a quote, or to book an appointment, please call or email us. Our office is conveniently located at 675 W Hastings St Unit #1412 in downtown Vancouver. We are happy to assist you directly or to provide a referral for someone who can help.

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What Every Home Buyer Must Know About Vancouver’s Empty Homes Tax

If you are buying a house, Vancouver’s Empty Homes Tax, also referred to as the Vacancy Tax, may unexpectedly apply to you.

In 2017, after the Vancouver City Council passed the controversial Tax By-Law, dozens of homeowners and buyers have come to my office asking about whether it applies to them.

The answer is not always clear, which can be particularly unsettling at the time of a real estate transfer. The new home buyer may be unknowingly responsible for paying a $10,000+ tax up to 2 years into the future. Ouch!

In this guide, we explain this tax in simple English so that all homeowners and buyers understand what it is and whether it applies to them.

We also outline a solution that ensures no home buyer is caught with an unexpected tax up to 2 years after they purchased a house.

WHAT IS THE EMPTY HOMES TAX?

The Empty Homes Tax, also known as the Vacancy Tax, applies to residential properties within the City of Vancouver that:

  • Have been vacant for six or more months during a calendar year, or;

  • Has not been rented out for 30 or more consecutive days.

The Vacancy Tax was set up for two reasons:

  1. To make empty or under-utilized properties available for long-term rental, and

  2. To help relieve pressure on Vancouver’s rental housing market, given low rental vacancy rates and high rental costs. 

The bylaw was passed by the city council in December 2016, in a context in which rental prices were soaring and more than 25,000 properties within the city remained empty or under-occupied. 

The tax looks to incentivize rentals, and the net revenues from the Vacancy Tax will be reinvested into affordable housing initiatives in order to continue providing solutions to Vancouver’s housing crisis.

The rate of the Empty Homes Tax is 1% of a property’s assessed taxable value. It is an annual tax that is applied on a yearly basis. This means that for every $1 million dollars of value, the vacancy tax will be $10,000 a year.

WHO DOES THE EMPTY HOMES TAX APPLY TO?

The types of Vancouver properties the empty home tax applies to

Any non-principal residences within the City of Vancouver that are left empty for six months of the year or longer will have to pay the Vacancy Tax.

If your property is located in a municipality that does not fall within the city, such as the University Endowment Lands, Burnaby, or Surrey, the tax will not apply to you.

According to the City of Vancouver, this will only apply to a category of homes known as Class 1 Residential, which includes “single-family residences, multi-family residences, duplexes, apartments, condominiums, nursing homes, seasonal dwellings, manufactured homes, some vacant land, farm buildings, and daycare facilities.”

If your property is within the boundaries of the city of Vancouver but is not solely classified as a Class 1 residential property, the Vacancy Tax will not apply, and you are not required to make an annual property status declaration.

Some exceptions to the tax exist. They include, but are not limited to properties that:

  • Are not a principal residence, but were occupied for at least 180 days of the year because you worked in the city of Vancouver.

  • The owner or the tenant was receiving long-term, inpatient, medical, or supportive care.

  • The registered owner was deceased, and a grant of probate or administration of the estate was pending.

  • The title was transferred during the year.

  • Were undergoing redevelopment or major renovations where permits:
    had been issued and were being carried out diligently and without delay, or
    were under review for redevelopment of vacant land or the conservation of heritage property.

  • Are under a court order, court proceedings, or an order of a governmental authority prohibiting occupancy.

The types of buildings being assessed

HOW WILL THE TAX BE IMPLEMENTED?

Every year, Vancouver homeowners will need to make an annual property status declaration. This will include the valuation of the property and state whether or not the property was vacant for six months or more during the previous fiscal year.

The declaration will then be used to determine whether or not the property will be taxed.

All declarations for the 2017 fiscal year must be made between December 1, 2017, and February 2, 2018. Failure to do so will lead to the imposition of the tax, as well as a fine that may reach up to $10,000 per day of non-compliance. 

False reports can also lead to a $10,000 fine for homeowners.

According to a report published by Global News earlier this year, a City of Vancouver spokesperson said that “property status declarations will be subject to a rigorous audit process, in line with best practices for provincial and federal tax programs.”

This means that homeowners should definitely comply with the law and be truthful in their declarations.

Cost of empty homes tax

WILL UNPAID TAXES BE TRANSFERRED TO A NEW BUYER? 

Buyers may have to pay taxes owed on a property after they purchase it.

According to the bylaw, if you purchase or inherit a property that has an unpaid Empty Homes Tax, you will not have to pay the one percent tax for that fiscal year.  

If it is found that it should have applied to previous years, that tax will be added to the property tax account associated with that property and “run with the land.”

However, you’ll still have to present an annual property status declaration.

Will the empty home tax be transferred

THE SOLUTION WE’VE FOUND TO THE POTENTIAL TAX PROBLEM

An audit for the previous year could take place 1-2 years after your home purchase is completed.  

Even if you know that the seller lived there, it may be impossible to find them to sign an affidavit and provide the evidence required. This could be problematic.

We have seen several times where relations between buyer and seller are strained during the property transaction and negotiations.  How do you know they will cooperate with an audit?

As BC Notaries, we are asked to provide our final report that the buyer owns the property free and clear of previous incumbents.  This is a new challenge in how we can now do that under the cloud of vacancy tax as the audit time is in the future and the tax liability stays with the homeowner.

The penalty goes to the individual (the previous owner), but the tax, if unpaid, goes to the land.

Neither the City of Vancouver nor the real estate (salesperson and legal) community has done a great job at finding a convention on how we can deal with this. With every real estate transaction, there is a potential that people are arguing about the Vacancy Tax.  

This is an evolving area without a set of generally accepted legal industry practices. To protect buyers, we have a few new steps for City of Vancouver purchasers.

how home buyers can protect themselves

1. CONFIRM TAX STATUS

Ensure that declarations are made and taxes are paid or held back until the declaration is made.

2. PROTECT THE BUYER AND LENDER FROM A FUTURE TAX

Where the contract is silent on who is going to deal with the issue of Empty Homes Tax, we need to find something that has certainty.

We have worked with the title insurance companies to confirm protection, and most title insurance policies will protect buyers and lenders from the result of an unfavorable audit for the previous year’s declarations.

The cost of title insurance depends on the price of the property. Here is a Policy Calculator for Stewart Title. The cost and coverage between title insurance companies are about the same.  

While title insurance is an increased cost, we can find something that delivers certainty as well as providing protection in several other areas as well.  We urge all buyers to now purchase “owner policy” title insurance.

Many lenders already insist on getting title insurance to cover the mortgage.

The Vacancy Tax isn’t mentioned in the contracts of purchase and we receive.  We can’t have variables.  We urge our purchasers to follow our advice and purchase owner’s policy title insurance.

Purchasers do have a choice, and our clients can refuse to buy title insurance. In such cases, we will provide a waiver, and we can confirm the risk lies solely with the purchaser. They agree that we accept no liability for unpaid taxes or risks that would have been covered by title insurance.

refuse title insurance

KEY TAKEAWAYS

Overview of the Empty Homes Tax: Introduced in Vancouver in 2017, the Empty Homes Tax, also known as the Vacancy Tax, targets residential properties within Vancouver that are vacant for six or more months during a calendar year or not rented out for 30 or more consecutive days.

Purpose of the Tax: The tax aims to alleviate pressure on Vancouver’s rental market by incentivizing the rental of empty or underutilized properties. The revenue from the tax is directed towards affordable housing initiatives in Vancouver.

Tax Rate: The tax is set at 1% of the property’s assessed taxable value, meaning a $10,000 tax per year for every $1 million in property value.

Applicability of the Tax: The tax applies to non-principal residences in the City of Vancouver left empty for over six months per year. 

Implementation and Compliance: Homeowners must annually declare their property status, indicating whether the property was vacant for over six months. Failing to declare or submitting false reports can lead to significant fines.

Impact on New Buyers: Unpaid taxes may transfer to new buyers. To mitigate the risk of the Vacancy Tax, buyers in Vancouver should confirm the tax status, ensure compliance, and consider purchasing an “owner policy” title insurance for protection against potential future tax liabilities.

HAVE ANY QUESTIONS?

If you still have questions regarding the Empty Homes Tax and for more information about buying real estate in the City of Vancouver, please call or email us.  We are happy to assist you directly or to provide a referral to a notary or lawyer in your area.

David Watts, BC Notary
Clinton Lee, BC Notary
David Watts Notary Corporation
Phone: 604 685 7786

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The Ultimate Guide To Buying Your First Home In Greater Vancouver

The Ultimate Guide To Buying Your First Home in Greater Vancouver

Are you getting ready to buy your first home?

While it’s a big task, when you arm yourself with the right information, you can avoid setbacks that complicate the home buying process.

Most of these items can easily be avoided if buyers have access to proper information. That’s why, if you’re looking to buy your first home in Vancouver or the surrounding area; here’s a guide to help you navigate through this complicated (and often daunting) process. 

Before you even start thinking about purchasing a home, there are a few things that you must consider.

CHECK YOUR CREDIT SCORE

The health of your credit score will dictate whether or not you can secure a loan, how much you can borrow and what interest rate you will get so it’s helpful to find out in advance where you are and what you can do to improve it.

Every lender has their own criteria, however, most consider a score of 650 an above low risk.

According to Mogo, credit scores are calculated by:

  • 35% payment history – whether or not you make your payments on time.

  • 30% utilization ratio – they recommend staying before 35% of your total available credit and never going above 70%.

  • 15% length of credit – the longer you have accounts open, the more history it shows of you being responsible with credit.

  • 10% types of credit – have a mix of high-risk credit such as credit cards and lines of credit, and low-risk personal loans.

  • 10% inquiries – hard credit checks occur when you are applying for new credit, phones, and even bank accounts. Too many can affect your credit rating.

Both Equifax and Transunion will give you a free report each year – go here for full instructions. Services such as Mogo and Credit Karma will give you free monthly updates without making formal credit checks that affect your scores.

Make sure to check your credit reports for any errors and look for ways you can improve your credit score by:

  • Paying your bills on time.

  • Paying your debts as quickly as possible.

  • Not going over the credit limit on your credit cards.

  • Reducing the number of credit applications you make.

  • Having healthy credit history.

credit score

DETERMINE WHAT YOU CAN AFFORD

Purchase Price and Down Payment

Given the high housing prices of real-estate in Vancouver and its surrounding areas, a downpayment for a house or a condo may be a significant amount of money.

You will be required to have at least 5% for a minimum down payment to get a mortgage with mortgage default insurance, or at least 20% for a mortgage without default insurance.

You’ll also need to prove to your lender that you can cover your closing costs on top of your down payment.

Closing costs may include:

  • Mortgage Application Fees

  • Mortgage Insurance

  • Appraisal Fees

  • Survey Fees

  • Property Transfer Tax

  • Property Tax

  • GST

  • Legal Fees

  • Land Title Registration Fee

  • Title Insurance

For full details check out our article The First Homebuyer’s Guide to Closing Costs in Vancouver.

You should also factor in moving costs, home insurance and anything you might have to spend as soon as you move into your property.

mortgage budget

FIND A LENDER

Mortgage Broker, Banks, and Credit Unions

There are a number of different ways to get a mortgage, the most popular being a bank, credit union, or mortgage broker.

Each will have different terms, conditions, and interest rates.

Working with a mortgage broker will give you access to a wider range of mortgages and mortgage lenders than working with a solo lender such as your bank.  

Every mortgage broker will have relationships with different lenders, so ask them who they work with.

Mortgage brokers charge the lender a commission so you don’t have to pay any additional out-of-pocket fees with institutional mortgages.  There may be additional fees with private mortgage lenders.

To make sure you find the right Mortgage broker, check out our guide on How to Choose the Right Mortgage Broker.

find a lender

GET PRE-APPROVAL ON A MORTGAGE

Getting pre-approval doesn’t mean you are guaranteed to get a mortgage, or the amount that you’ve pre-approved for. It means the lender has assessed your financial situation and determined the maximum amount they will lend you and the interest rate they will apply.

Pre-approval allows you to begin looking at homes knowing your price range while understanding your monthly mortgage payments.

Once you have found a home, the approved mortgage amount will depend on the value of the home and the percentage of your down payment.

To get pre-approved mortgage you’ll need to provide:

  • Appropriate identification

  • Proof of employment or income

    • Your position within the organization.

    • Current salary or hourly rate.

    • Your employment length and history.

    • 2-3 years of your Notice of Assessment when self employed.

  • Proof you have the funds for a down payment.

  • What other assets you own.

  • Your debts and financial obligations including:

    • Credit card payments

    • Car payments

    • Lines of credit

    • Student loans

    • Child or spousal support payments

    • Any other debts

The lender will determine how much they are prepared to lend you based on your credit rating, income, and debts.

UNDERSTAND MORTGAGE PENALTIES

Before signing on the dotted line for a mortgage, make sure that you understand all of the fees associated with your mortgage. One important fee to understand are the penalties you will have to pay if you decide to sell your home and prepay your mortgage.

For more information, check out our article What Are Mortgage Penalties? (And How to Avoid Paying Them)

mortgage penalties

CHECK TO SEE IF YOU QUALIFY FOR THE FIRST TIME HOME BUYER’S PROGRAM

First time home buyers in British Columbia may qualify for the First Time Home Buyers’ Program.

This program is run by the provincial government, and reduces or eliminates the amount of property transfer tax you pay when you purchase your first home.

In B.C., the Property Transfer Tax (PTT) is a tax of 1% on the first $200,000 and 2% of the remaining value of the purchase price to $2,000,000.

This can add up to a significant amount of number, which means that you should definitely check to see if you can be exempt from paying this tax.

Find A Realtor

find a great real estate agent

You don’t NEED a real estate agent to buy a home, but you should consider getting one.

Real estate agents will be able to guide you through the process of searching for and the entire home-buying process. These professionals are knowledgeable about the housing market, and will make sure you get a fair market value price. They will make your life easier throughout your purchase.

Because you will be working closely with your real estate agent, it is recommended that you hire someone you trust. Shop around, make some calls, and find someone who you’ll be comfortable working with. 

To make sure you find the right Real Estate Agent, check out our Guide How to Pick the Right Real Estate Agent.

Then, put them to work helping you find a house.

Home Search

search for a house

Remember the pre-approval is the maximum your lender will MAY give you. It makes sense to look for properties below the maximum.

Once you have an agent working with you, you have a pre-approved mortgage, and you’ve figured out how much you can spend on a down payment, you’re ready to start house hunting.

This next phase is complicated and time-consuming and requires you to do a number of things. Here are just a few:

PRIORITIZE

The housing market in Vancouver is competitive, and housing prices have been continuing to soar. Finding the right house takes time and effort, and a healthy amount of patience.

That’s why, if you’re serious about finding a home, you should place the search high on your list of priorities. This will inevitably mean making some sacrifices.

You’ll probably be seeing many houses and going into many meetings, so keep that in mind when making plans. Prioritizing the search also means avoiding large expenses (such as buying a car). Doing this will have an impact on your financial situation, and may mean that your mortgage pre-approval is revoked.

BE OPEN

Perhaps one of the most important things that first time buyers need to know is that they probably won’t be buying their dream home.

And that’s ok.

When you begin house hunting, being open to new plans and flexible about your wishes is key to successfully buying your first home.

Maybe the house you find is great but isn’t in the area you wanted. Maybe the location is ideal, but you need to invest in changing wallpaper and cupboards. Maybe the yard is a bit smaller than you wished.

The perfect home possibly doesn’t exist (or is out of your price range) and that is just a reality that everyone has to deal with. 

As long as you have an open mind about your first home, you’ll be fine. And remember: this home will probably not be your forever home, which means that you’ll most likely be able to upgrade down the road. 

TAKE A CLOSE LOOK

When selling a home, people often bring in Stagers and do minor facelifts to make the house look its best. This can mean a room might look bigger than it is, or that you don’t notice something.

When you start seriously considering a property, make sure you measure rooms and look closely at what might be hiding behind a coat of paint.

Make An Offer

make an offer

Once you’ve found a home you like and made sure it fits your budget, it’s time to make an offer. 

Making an offer requires that you sit down with your real estate agent (and perhaps a notary public or lawyer) to draw up an offer that incorporates the right amount of “subjects”.

These “subjects” are conditions that protect your purchase. For instance, the offer can include a subject that specifies that unless a fix is made, the offer will be rendered void.

It should also include a subject to inspection condition. This will allow you to get a third party professional to check the house for any serious issues that the untrained eye would miss. Doing so can save you a lot of money in the long run.

If you are getting a mortgage, it should definitely include also include a subject to a financing condition. Your lender may have approved your for financing, but not like that building.  Make sure the lender approves the property as well as you.

If buying a house or detached property, I always recommend you make sure you can get insurance on that property.  Sometimes there are things like older aluminum wiring that can make it difficult. Your lender will require you have insurance before they advance funds; so make sure you can get insurance before you remove subjects are you are obligated to complete.

GET YOUR FINANCE APPROVED

If the seller approves your offer, you must go back to your bank (or mortgage broker) and finish the loan approval process. As long as your financial situation has not changed since getting pre-approved, this should not be a difficult process.

ARRANGE AN INSPECTION

Once you have been successful in securing financing, it’s time to do a final inspection.

This will cost around $500 (or more) and may take a while to do, so book it in as soon as you put your offer in.

REVIEW CLOSING COSTS

Inspection is just one of the many closing costs you’ll have to incur. 

Unfortunately, these costs will add up, and many people don’t know they exist. That’s why it’s important to review them beforehand.

Generally speaking, you should keep in mind that these costs could add up to nearly 4% of the final purchasing price.

For more information about Closing Costs, check out our Guide The First Time Homebuyer’s Guide to Real Estate Purchase Closing Costs In Vancouver.

Closing

real estate closing

At this point, you should know exactly how much money you’ll need for your BC Notary or Lawyer to complete the transaction. They will let you know what the best way to make this payment is, and will advise you on what you need to bring to the signing.

During this part of the process, you’ll have to go through a lot of paperwork. You’ll also potentially have to go back to the bank to make sure all mortgage details are finalized.

This part of the process may be tedious, but once it’s done, you’ll be the proud owner of your first home!

NEXT STEPS

Now that you know the steps involved in purchasing a home, there are a few things you can do right now to get the ball rolling.

1. Find out how much you can borrow. Doing this will give you a clearer picture of how you’ll be able to pay for your new home.

2. Get advice from a BC Notary. Notaries provide professional legal guidance on the purchase or sale of a home and can help you navigate through the legal part of purchasing a home.

Want to know more? Get in touch now.

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Should I use a BC Notary or A Lawyer?

man signing document with shadow behind him

It’s impossible to guess how many people have asked me that question.

If I had to, I think the number is probably in the hundreds.

It’s a great question.

So let’s start at the beginning…

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What Are Mortgage Penalties

What Are Mortgage Penalties? (And How to Avoid Paying Them)

WHAT HAPPENS IF YOU WANT TO SELL YOUR HOME BEFORE THE END OF A FIXED-YEAR MORTGAGE?

When you got your mortgage, you meticulously shopped around for different options, weighed the pros and cons, and eventually found a good deal that suited your financial situation. You probably consulted with financial advisors and even used mortgage calculators to help you make an informed decision.

Most likely, you settled for a five-year mortgage, choosing between a fixed mortgage rate or a variable rate mortgage based on what made the most sense for you at the time.

Then, life happens. Maybe you got a new job in another city, or your family is growing and you need more space. Alternatively, perhaps the real estate market is booming and you see an opportunity for profit. Whatever the reason, after three years, you decide to sell your property.

You still have two years on your term. This means you’ll have to break your mortgage contract in order to sell. You call the bank to find out how much it will cost. When the voice on the other side of the phone tells you the figure, you can’t believe what you are hearing.

You put down the phone in a hurry, and ask yourself the following question:

Why Is It So Expensive to Prepay Your Mortgage?

You’d think that lenders would be thrilled if you wanted to be financially responsible and pay off a loan early. Contrary to popular belief, that isn’t the case at all. In fact, lenders often frown upon early repayments. This is because they make money through the interest payments that accrue over the life of the loan. When you pay off your mortgage early, you’re essentially cutting into their profits.

Lenders don’t want you to pay your loan early because they want the interest payments.

A mortgage contract includes specific language regarding the penalties you need to pay if you want to prepay your mortgage. These aren’t mere footnotes or small clauses buried in the fine print, they are essential parts of the agreement that outline the financial consequences of breaking the mortgage terms early. It’s not unusual for these penalties to be quite substantial, sometimes amounting to several months’ worth of interest payments, or even a percentage of the remaining loan balance.

Whether pay the whole mortgage off in cash, or by switching to a new mortgage, you’ll most likely have to pay these (often) astronomical penalties.

That’s why, before you sign a new mortgage contract, you’ll want to know exactly how much these penalties are.

Lenders want your interest

How Much Will It Cost to Break My Mortgage?

The amount of money you’ll pay in penalties for breaking your mortgage will depend on the type of mortgage contract you have.

VARIABLE RATE MORTGAGE

Variable-rate mortgages are mortgages in which the current interest rate is adjusted periodically to reflect market conditions.

If you have a variable-rate mortgage, the mortgage penalty you’ll have to pay is of three months of interest on your current balance.

In other words, if the current balance on your loan is of $100,000 and the interest rate on your mortgage is 2.79%, you’ll be paying $697.50 in penalty.

Here is how we got those numbers:  

Interest rate x current balance x three-months = penalty
or
.0279 x 100,000 x (3/12) = $697.50

FIXED RATE MORTGAGES

A fixed-rate mortgage is a mortgage in which interest rates and payments are fixed for the duration of the term.

This type of mortgage provides monthly financial stability, but calculating the penalty for breaking your fixed-rate mortgage is complicated.

The general rule of thumb in these cases is that when you break a fixed-rate mortgage you will pay whichever is greatest between the three-month interest or the interest rate differential.

HOW TO FIGURE OUT YOUR MORTGAGE PENALTY

First, calculate your three-month interest rate using the same equation as above. Here’s what that would look like using the example above.   

Interest rate x current balance x three-months = penalty

Then, figure out what your interest rate differential (IRD) is.

For this, you’ll need to know the following four things: the balance on your current mortgage, your original rate, the rate you can get now, and the remaining number of months in your mortgage term. This information can normally be found on your online banking profile.

Using the same example from above, let’s assume that the current balance on your mortgage is $100,000, your original interest rate was 2.79%, the current rate is 2.59%, and you have two years (24 months) remaining in your mortgage term. In this case, your interest rate differential is $400.

Here’s how we got this number:

(Contract rate – Current market rate) x Current balance x Remainder of contract = IRD
or
(.0279-.0275) x 100,000 x (24/12) = $400

In this example, because the three-month interest ($697.50) is higher than the IRD ($400), your penalty will be of three-month interest rate. In many cases, however, your IRD will be much higher than the three-month interest.

Many times penalties are in the thousands or tens of thousands of dollars, meaning that you may need to reconsider whether or not to break your mortgage.

Also, some lending institutions may use different methods to calculate your interest rate differential, including variables like discounts and advances. Make sure you ask your lending institution how they calculate IRD.

Different types of mortgages

HOW TO FIGURE OUT YOUR PENALTY WITHOUT MATH

First, you’ll need to get the following information:

  • When your mortgage started

  • Whether it’s variable or fixed

  • The term on your mortgage contract

  • The remaining balance

  • Your existing interest rate

Next, go to the Penalty Calculator on Ratehub.ca and fill out the information about your mortgage.

An example is a 3-year mortgage for $100,000 with HSBC with a 2.79% interest rate would have a $75 penalty on a variable mortgage, but a $3175 on a fixed rate. The same figures with CIBC are estimated at about $875 on variable and $3875 on fixed-rate mortgages.

It shows that rates are different for every bank and mortgage.

IS THERE ANY WAY I CAN AVOID THE PREPAYMENT PENALTY?

Here are a few things you can do to avoid paying astronomical prepayment penalties.

1. REVIEW YOUR MORTGAGE CONTRACT BEFORE YOU SIGN IT

Your mortgage contract will most likely be the most complicated document you ever sign. That’s why it’s important that you review your mortgage contract thoroughly before signing it. This includes looking specifically at prepayment penalties.

Get some help with this from an expert and make sure you know exactly what you are signing.

2. EXPLORE PREPAYMENT CLAUSES

Some mortgages include clauses that allow you to pre-pay up to 20% of your mortgage balance per calendar year without a penalty. If you have calculated your penalty and figured out it is going to be astronomical, you can pay down up to 20% of your mortgage, and incur the penalties on the reduced balance.

3. PORT YOUR MORTGAGE

If you’re looking to buy a new property, one of the ways to avoid paying a prepayment charge is to port your mortgage. This means taking your current mortgage contract —with its current rate and terms—and transferring it from one property to another. This can only be done if you’re buying a new property at the same time as you are selling your old one, and needs to be approved by your lending institution.

4. GET YOUR MORTGAGE ASSUMED

If you are selling your house, this means transferring your mortgage to the buyer. Not all loans will allow you to do this (most won’t, in fact) but it could be an option if your mortgage contract allows it and your differential is very high. Ask an expert to look at your mortgage contract to make sure you qualify for this.

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what is a cohabitation agreement

What Is A Cohabitation Agreement (And When Do You Need One)?

Have you recently moved in with your significant other or are you planning to do so?

If so, you’re entering a high-stakes game.

Like in most high-stakes games, things could go your way. If that happens, the payoff could be huge. You could, as they say, live happily ever after.

But if things don’t go well, that’s when things could start to get messy.

I asked my colleague and family lawyer: Laurence Klass from Watson Goepel to help shed some light on Cohabitation Agreements. The rest of this article is what he had to say.

Breakups are never pleasant, and unfortunately, that’s when disputes can get nasty. Most people don’t think that it will ever get to that point with someone they love, but sadly, breakups are when they see an entirely new side to the person.

I’ve seen this happen plenty of times. Two people, let’s say both of them divorced and with kids, fall in love and move in together. After a while, the relationship starts to fall apart.

Each of them brought different things they shared…but now the question of who brought what isn’t quite as clear. And as things start to unravel, the issues begin to emerge…

  • Who keeps the dog?

  • What are our kids entitled to?

  • What do we do with the property we bought during the time we were together?

Typically, answering these questions is tough, and becomes the center of a legal dispute.

Other times, when people have the foresight (and good advice from a lawyer), they sign a cohabitation agreement, making separations much easier.

WHAT IS A COHABITATION AGREEMENT?

Much like a marriage contract or a prenuptial agreement, a cohabitation agreement is a legal document signed by two people who live together or are planning to move into the same home.
Cohabs, as this written agreement is sometimes called, outline how things will be divided if the relationship were to end.

This includes who:

  • retains ownership of property purchased together

  • retains ownership of property acquired before the relationship started

  • takes responsibility for any debt accrued before or during the relationship

  • pays for household expenses; and

  • how inheritance would be divided if families are being combined

In British Columbia, as long as the terms are deemed fair and don’t infringe on anyone’s individual freedoms (like, for example, specifying who a person can or can’t talk to), these cohabitation agreements can be pretty wide-ranging.

DO I NEED A COHABITATION AGREEMENT?

Generally speaking, yes having one makes sense. If you are planning to move in with your partner it is a good idea to do so before you move in. However, if you are already living with your partner it is more important to have this agreement written and signed before two years of living together. After two years you are considered to be in a common-law relationship which is considered the same as a marriage-like relationship under BC Family Law.

If you are getting married or plan to, your cohab agreement can be worded in a way to ensure that it will still remain in force once you are married. It also gives you a chance to come to an agreement on how things will get divided while you are still in the relationship (and on good terms with your partner).

cohabitation agreements are binding contracts

Having a cohab reduces some of the stress during breakups and helps avoid the costs involved with disputes. They also help make sure that both parties take care of their families and protect the inheritance that they give or receive from their own family members.

By having a cohabitation agreement, you are resolving in advance how to separate property if the relationship breaks down. Everything is much quicker, cost-effective, and less stressful.

In short, you can move on quicker with your life.

WHAT HAPPENS IF YOU DON’T HAVE ONE?

In BC, if a couple doesn’t have a cohabitation agreement and a dispute ensues after their relationship breaks down, the decision as to who gets what will be governed by the Family Law Act.

According to this act, property and debt is divided equally among both parties. It becomes the responsibility of each person to provide evidence proving who brought what into the relationship, which is sometimes difficult to do.

The time to have these agreements made is when people are on good terms. If you wait and the couple isn’t on good terms, lawyers get involved, and that can get pricey and could take years.

DO YOU NEED ONE IF YOU ARE MARRIED?

Under British Columbian law, cohabitation agreements hold the same power as a marriage contract (in fact, they are the exact same thing, except named differently).

These agreements apply to anyone in a married couple, a common law partnership, or who is living together. They can even include clauses that say that they remain valid if the status of the relationship transitions from cohabitation to a common law relationship to being legally married.

WHAT DO YOU NEED TO INCLUDE IN A COHABITATION AGREEMENT?

Here is a list of things that can be included in a cohabitation agreement:

  • How family property or an individual person’s property, like real estate, possessions, and pensions, will be divided

  • How shared debts will be divided

The agreement can also determine who gets what if the relationship were to end. This includes:

  • who owns what within the party’s assets

  • how much money each person puts in to run the household

  • how credit cards are dealt with

  • whether someone will receive spousal support (typically in the form of financial support) upon an eventual breakup

  • how any disagreements following separation will be solved

WHAT IS NOT INCLUDED?

In BC, certain things cannot be included in a cohabitation agreement.

These include:

  • Laying out how people must act within the relationship

  • Stating parental responsibilities for children who have not been born.

  • Laying out future child support obligations for any unborn children.

DO YOU NEED TO UPDATE COHABITATION AGREEMENTS?

Cohabitation agreements should be seen as a living document. They need to be reviewed at regular intervals to keep them current and make sure they still do what they are meant to.

We recommend that people update their cohabitation agreement every five years, or whenever a significant event, such as a marriage or the birth of a child, occurs. Additionally, if one of the members of the agreement were to suddenly receive a large sum of money or property from an inheritance, for instance, the agreement should also be reviewed.

If you would like to make sure that this update occurs at regular intervals, you can include a review clause in the document itself. This clause would be triggered after an event (such as the ones mentioned above) or could state that the agreement needs to be reviewed every couple of years to remain valid.

Whatever you choose to do, the main point is that it’s important to look at the agreement regularly to make sure it continues to work for both parties and to make sure that it hasn’t become significantly unfair.

whats included in a cohabitation agreement

HOW DO YOU GET A COHABITATION AGREEMENT?

There is a growing trend of people who choose to try to save money by using resources online to create their own cohabitation agreements.

Bad idea.

While an online template gives the appearance of saving time and money, this is just not true.

There are plenty of precedents of people who have entrusted their property and significant debts to these online templates, only to find out that they hold no legal value, causing their assets to be divided according to the Family Law Act.

If you want your cohabitation agreement to stand up in court, you need a lawyer who knows family law and can tailor it to fit your specific needs. Both parties should also seek independent legal advice to make sure the agreement is fair and gives adequate coverage to their own best interests.

If you have any more questions about Cohabitation or Marriage Agreements, let me know and I’ll put you in touch with a family lawyer who can assist.

A big thanks to Lawrence Klass for this great information!

Key Takeaways

That might have felt like a lot of information. Here is a summary of all the key points we went over for you to reference. 

Cohabitation Agreement Definition

A cohabitation agreement is a legal document signed by two parties who live together or plan to move into the same home. It outlines how assets, debts, and other matters will be divided in the event the relationship ends.

Purpose of Cohabitation Agreements

Cohab agreements are essential to protect you legally and to avoid disputes and complications if your relationship ends. They provide clarity on ownership of property, responsibility for debts, household expenses, and inheritance division.

Legal Consequences Without a Cohabitation Agreement

In the absence of a cohabitation agreement, the shared property and debt are divided equally among both parties according to the Family Law Act. Proving ownership of assets can become challenging and lead to prolonged legal battles. Under the law, unmarried couples in a common law relationship (living together for at least 2 years) are treated as having a marriage-like relationship.

Applicability to Married Couples

Cohabitation agreements have the same power as marriage contracts in British Columbia and apply to married couples, common law partnerships, and couples living together.

What to Include in a Cohabitation Agreement

A cohab agreement can cover the division of family and individual property, shared debts, spousal support, and dispute resolution methods.

Inclusions Not Allowed in Cohab Agreements

Certain aspects, such as dictating behavior within the relationship, parental responsibilities for unborn children, and future child support obligations for unborn children, cannot be included in a cohabitation agreement.

Need for Regular Updates

Cohabitation agreements should be considered living documents and should be reviewed regularly, especially after significant events like marriage, the birth of a child, or changes in financial circumstances.

Importance of Professional Legal Assistance

Using online templates for your cohabitation agreement may not be legally valid. It is advisable to consult a lawyer who can tailor the agreement to specific needs and ensure it holds up in court. Both parties should seek independent legal counsel to ensure fairness and adequate coverage of their interests.

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how to protect your family as you age header

How to Protect Your Family As You Age

Age isn’t quite what it used to be. 

60 is the new 50, 80 is the new 70. There’s been a considerable amount of talk in the media about “miracle” technological advances that cure all types of ailments and promise to keep us alive well into the triple digits. 

There’s no doubt that some of these advances are real and are actually extending and improving our lives, but there’s one thing they’ll never be able to change: accidents still happen, especially as we age.

According to a report by the Canadian Medical Association, nearly three-quarters of Canadians over 65 have at least one chronic health condition, and unexpected accidents like falls remain a leading cause of hospitalizations for people over 60.

Despite these staggering statistics, many people remain unprepared to deal with what could happen to them and their families if they suddenly become incapacitated by an accident or illness, or when they die. 

Recent polls show that the majority of Canadian adults lack basic estate documents such as wills, representation agreements, or powers of attorney. And, many of those who have them need to update their documents for them to remain legally binding. 

As you get older, not thinking about the very real possibility that something could happen to you means you are putting an unfair burden on your family and leaving them exposed to a number of headaches and responsibilities. 

So what can you do to remedy that? Here are five things you can do right now to protect your family as you age.

1. Write (or update) a Will

Wills are extremely important documents. If you don’t have one (or if things have changed since you wrote it or you’re not sure what’s in it or where it is) you should definitely consider getting a will (or a new one) as soon as possible.

Wills allow you to express how you want your estate to be divided and help keep an inventory of what you own. This provides a HUGE help for your family and takes the burden of many decisions off of their shoulders.

Perhaps more importantly, wills allow you to select someone you trust to be in charge of executing your wishes. This helps guarantee that your wishes are actually carried out after you die, and helps organize the division of your stuff once you are gone.

2. Write a Power of Attorney Document

Power of attorney documents allow you to authorize someone else to sign financial or legal documents and act on your behalf. This can also be used to buy and sell assets, and sign tax returns if you are unavailable or incapacitated. 

There are two types of power of attorney. While a specific power of attorney is limited to a single transaction, an enduring general power of attorney allows you to choose someone who will take control of all your legal and financial matters if something were to happen to you.

In addition to this, it is a smart thing to do if you are in the early stages of Alzheimer’s, other forms of dementia, or degenerative diseases and believe that you may need help managing your daily finances now or in the future.

One small note, a power of attorney doesn’t apply to health care decisions (you’ll need a Representation Agreement for that).

how to protect your family as you age checklist header

3. Get a Representation Agreement

Representation Agreements are legal documents that allow a person (or a group of people) to make personal care and health decisions on your behalf.

This allows someone you trust to manage your affairs if you are incapacitated or unable to make your own decisions due to illness, injury, or disability. It also allows you to dictate your specific wishes regarding your physical, emotional and personal needs, including:

  • Choosing who will advocate for you
  • Giving or withholding consent for medical treatments
  • Where you will live (and with whom)
  • Whether to admit or discharge you from a care facility
  • Planning of support and services
  • Who has visitation rights
  • Care staff management
  • Spiritual matters
  • Whether you want to refuse CPR or have a Do Not Resuscitate (DNR)
  • End of life decision making
  • Diet and grooming
  • Care of pets
  • Participation in activities and exercise

Without a Representation Agreement, a doctor or health care provider will choose your Temporary Substitute Decision Maker (TSDM) if you can’t make your own decisions.

This person is selected based on the Health Care Consent Act. Your spouse would be the first choice, followed by one of your children.

Your TSDM is required by law to make decisions based on your best interests. However, this person may not necessarily be the person you want, or may not know what type of care or treatment you would prefer.

A Representation Agreement allows you to choose in advance who you want to represent you. Most people choose a spouse, partner, friend or family member in their representation agreement. 

The representative’s main responsibility is to assist a person to make a decision for themselves. This means that before making any decision, the representative is legally obligated to try to determine your current wishes.

If you are completely incapacitated and your current wishes cannot be determined, then your representative will follow what has been outlined in your Representation Agreement.

As a last resort, the representative will make a decision based on what they think is in your best interest while consistent with your values.

4. Get rid of some of your stuff!

Most people tend to accumulate lots of things throughout their lives. While some of these things may hold sentimental value, they also tend to pile up in basements, attics, and closets and are a hassle to deal with as we get older (not to mention a nightmare for those left to do it after you pass).

Downsizing isn’t as easy as “just getting rid of some stuff”. Letting go of your things can be difficult, but it can also be a very liberating process and one that your family (and future you!) will definitely appreciate.

Going over your things with your family members (especially your kids) is a great way to get the ball rolling on downsizing.

5. Get some legal help!

According to the BC Wills, Estates and Succession Act and the BC Wills Variation Act, which legislate estate succession in British Columbia, there are a number of reasons why your estate documents may be deemed invalid by a court.

For example, there could be undo interference (which is when someone influences the writing of another person’s will); formal invalidity (when proper processes aren’t followed); or a lack of testamentary capacity (when someone doesn’t have the mental capacity to legally sign a will).

Regardless of the reason, if a judge declares that a will is invalid, it’s essentially thrown away.

Draftinging or reviewing your documents with a BC Notary can help to ensure your wishes are followed and documents stand up to scrutiny.

The bottom line: if you haven’t created or reviewed your legal documents lately, now is the perfect time!

About David Watts

David Watts is a BC Notary who has practiced in Downtown Vancouver since 2006.  David’s office specializes in working with people to create their Wills, Power of Attorney and Representation Agreements; as well as performing Real Estate Transfers for properties all around British Columbia.  David has trained to receive the Certified Professional Consultant on Aging (CPCA) designation. David has been long-serving Director of the Society of Notaries Public of British Columbia and is currently 2nd Vice President.

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Welcome BlueShore Financial To The David Watts’ Team!

We are excited to announce that BlueShore Financial is now working with David Watts Notary as a mortgage lender.

It’s an exciting week for BlueShore Financial as they open their new downtown Vancouver branch, just a few blocks from our office.

What we love about BlueShore is they aren’t your average financial institution – they think differently. One example of this is they have built a unique Financial Spa® which designed to create a calming and relaxing environment. Their branch has soothing sounds of their waterfall, soft lighting, comfortable seating and refreshments. They even sell spa products such as lotions and soaps with proceeds going to BC Children’s hospital.

Blue Shore Financial Spa


You can take a virtual tour of their Financial Spa® here.

We also love that they are a Vancouver-based credit union who donates 1% of their pre-tax profits to local charities and not-for-profits in the local community. Wishbank, one of their impressive programs is a financial literacy program for kids delivered in local schools.

BlueShore Financial will be working with us to provide mortgage solutions. Some features of their mortgages include:

  • Flexibility – choose the right term, from 6 months to 10 years, and the right amortization (as long as 30 years).
  • Multiple payment options – Choose weekly, bi-weekly, semi-monthly or monthly payments to suit your cash flow. Up to 15% of the original principal can be paid down each year on the mortgage anniversary date. Also, scheduled payments can be increased, on an ongoing basis, by up to 15% once each calendar year.
  • Custom built – If a listed mortgage option doesn’t seem to be what you need, they can build the ideal mortgage solution for you.
  • Portable – Take your mortgage with you when you purchase a new home (with qualification).
  • Assumable – Transfer your mortgage terms to the buyer when you sell (with qualification).
  • Waived legal fees – If you borrow additional funds or choose another BlueShore Financial mortgage, you pay no additional legal fees.
  • Extended financing – Up to 80% of property value or up to 95% if insured by CMHC, with down payments as low as 5%.

If you are interested in finding out more, phone or email, we’ll be happy to discuss.

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