On this page you will find useful articles and tips to help make the mortgage process smoother and hassle-free. Keep watching this page as we will be adding to it on a regular basis. 

Financing a Home

• Get a Pre-Approved Mortgage
• Buy With "0" or 5% Down
• Using Your RRSP
• Choosing a Mortgage
• Accelerating Your Freedom

• The Dynamics of Switching
• Choosing a Mortgage
• Accelerating Your Freedom

• Consolidate Other Debt
• Combining Mortgages
• Breaking a Mortgage and Transferring
• Refinancing and Home Equity Considerations

Self-Employed? Credit Issues? Unique Income Situation

Buyer and Seller Info

• Programs Available to First-Time Buyers
• Buyer's Tips - Winning the Bidding Wars
• An Easy Guide to Buying Your First Home
• Negotiating Tactics & Strategies Can Make or Break the Home Sale 
• Multiple Offers: How Can You Compete?
• Buyer Tips for Negotiating Price
• Can I Relax Now That My Loan is Approved?
• No News From the Seller is Not Necessarily Good News
• Why You need a REALTOR on Your Side
• 11-Step Program to Buying a Home
• Pre-Qualification and Pre-Quantification 101
• Don't Confuse An Appraisal and an Inspection
• Sellers: If You Want It, Ask For it!

Financing a Home

Get A Pre-Approved Mortgage

Be prepared

Don't miss out on the home of your dreams because you can't arrange financing quickly enough. Avoid disappointment. Apply for a pre-approved mortgage with us now! 

What is it?

A pre-approved mortgage puts your financing in place before you make an offer on a home. Usually, the sale of a home is contingent upon the buyer securing the required financing within an agreed-upon time frame. If you are unable to do so, the sale could fall through. With a pre-approved mortgage you'll be able to make a firm offer for the home of your choice. And as most Realtors will tell you, a firm offer adds an awful lot of leverage to price negotiations! 

Who is eligible?

Any qualified borrower. 

How it works

Apply with us now and start enjoying the convenience and negotiating leverage that Invis provides. All information you supply is completely secure and will be held in the strictest confidence.

Once you have received your pre-qualification from us, we'll help you find a lender with the most competitive rates who will issue your prequalification certificate. After a brief telephone contact from the mortgage lender discussing options, and requesting you to send proof of income and employment, you can be "pre-qualified" — quickly and easily.

After you purchase your home, simply contact us to provide property and offer details, along with any other information requested, and your actual mortgage can be approved within hours.
 

Buy With "0" or 5% Down

Don't have the usual 25% down payment?

No worries — Increase your leverage with a high ratio mortgage! This consumer-oriented program makes the dream of home ownership a reality for more Canadians than ever before. Even with zero down payment. 

What is it?

5% Down: Two programs are available that let you buy a home for as little as a 5% down payment. One is administered by Genworth Financial Mortgage Insurance Co., a private sector insurer, and the other by CMHC, a Federal Crown Corporation. Read carefully; the small print could create unexpected hitches! Use us to guide you through the process.

"0" Down: There are also two programs where you can buy with "0" down: 

Free-Down Payment: Some of the lenders in the Invis network have programs which are referred to as "Free-Down-Payment" Programs. In these scenarios, the rate is higher than the discounted rate, and is closer to - if not the actual - posted rate. The lender essentially provides you with a cashback of 5% which is the downpayment. The higher rate of interest paid over the mortgage term compensates for the downpayment covered by the lender. 
 

"0" Down - A few of our lenders will actually do a "0" down mortgage, however the catch is that there is an insurance fee that has to be paid to the lender who self-insures the mortgage. The fee is added to the mortgage amount. 
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Who is eligible?

For 5% down, anyone who meets the following lending criteria: 

A first time buyer who wishes to purchase a home whose value is above the "ceiling" established in that area for the First Home Loan Insurance Program.

OR

A non-first time home buyer who has 10% or more as a down payment
 

For 0% down, any qualified borrower who meets the underwriting guidelines of the specific lenders. 

How it works

Both 5% programs allow you to obtain a mortgage of up to 95% of the purchase price. Depending upon the percentage of down payment to be used, CMHC and Genworth Financial charge the following one-time insurance premium to you, the borrower. This premium can be added to the mortgage without affecting the Loan To Value ratio (LTV).
 
 

Down Payment =	% Financing  (as % of mortgage amount)	Insurance Premium  (calc. from mortgage amount)
5-9.9%	90.1% - 95%	2.75%
10-14.9%	85.1% - - 90%	2.00%
15 - 19.9%	80.1% - 85%	1.75%
20 - 24.9%	75.1% - 80%	1.00%
25 - 34.9%	65.0% - 75%	0.65%
35% plus	Up to 65%	(special circumstances )

In the example given above, the mortgage of $178,000 would be subject to a 2.0% Insurance fee because it is 89% of the purchase price. The fee would be $3,560, and the total mortgage amount $181,560. To qualify for a CMHC insured mortgage: 
 

• your monthly payments for "shelter costs" (mortgage principal and interest plus taxes and heating) must be no greater than 32% of your gross pre-tax family income.
• your monthly payments for all obligations — shelter costs plus loan, lease and credit card payments, plus alimony etc. — must not exceed 40% of your gross pre-tax family income.
• the payments on your mortgage must be calculated using the 3 year rate (5 year rate for the 5% down program). 

1. If the best 3-year rate you can get is 6.5%, the monthly payment on the $182,450 mortgage shown above — at a standard 25 year amortization — is $1,216.13 (see Mortgage Analyzer calculator). If your annual taxes are $2,000 and annual heating $1,200, then your annual shelter costs would total $17,794.Assuming no other payments, an income of $55,605 ($17,794/32%) would qualify you for this mortgage.

2. If you have monthly car and credit card payments of $475.00, this would add $5,700 to your annual debt servicing, for a total of $23,565. Dividing this figure by 40% (see above) gives a required qualifying income of $58,900. 

What else should you know?

In general, the credit status of an applicant must meet the lending criteria of the particular mortgage lender. An Invis Mortgage Consultant can help you meet the required criteria and assist you with the entire mortgage process. Plus we deal with many lenders and therefore have a greater chance of matching you with a lender.

Also, while CMHC will qualify an ex-bankrupt applicant for insurance two years after discharge with subsequent re-established credit, many lenders' own rules over-ride this feature, and they will decline the application.

On the other hand there are a number of lenders who specialize in granting and administering mortgages to the full extent of the National Housing Act at competitive interest rates.

In addition to the slight differences described above in mortgage terms and qualifying ratios (Total Debt Service ratio cannot exceed 40%) there are a few important conditions which apply to eligibility under this program: 

The downpayment must be 5% of the purchase price.

The applicant must be able to prove that their down payment comes from their own resources — savings, sale of investments, etc., the exception being a family gift that never has to be repaid, and which is in the borrower's possession before the application for Mortgage Loan Insurance is sent to CMHC. 

Using Your RRSP

First Time Home Buyer? Don't forget about the RRSP Home Buyers' Plan. It can be all or part of your down payment. The rules have changed in recent years, so if you think you know them, double check here!

What is the Home Buyers' Plan?

The HBP is a federally instituted government program that allows you to withdraw up to $20,000 from your registered retirement savings plans (RRSPs) to buy or build a qualifying home. The home can be for yourself or it can be for a related disabled person if it is more accessible to that person than his or her current home, or is better suited to that person's needs. 

You do not have to include eligible withdrawals in your income, and your RRSP issuer will not withhold tax on these amounts. You can withdraw a single amount or make a series of withdrawals throughout the same year, provided the total of your withdrawals is not more than $20,000. If you buy the qualifying home together with your spouse or common-law partner, or other individuals, each of you can withdraw up to $20,000.

You have to repay all withdrawals to your RRSPs within a period of no more than 15 years. Generally, you will have to repay an amount to your RRSPs each year until you have repaid all the amount you withdrew. If you do not repay the amount due for a year, it will be included in your income for that year.

Keep reading to learn more! And remember, whether you have RRSP savings or no RRSP savings, the HBP can be applied to you!

Benefits from using the Home Buyers' Plan.

The utilization of your RRSP's within the guidelines of the HBP results in benefits that are quantifiable immediately and extend over the long-term:

• ncreased down payment 
• Decreased principal owing 
• Avoidance of substantial interest costs over that accrue over long periods 

You can participate in the HBP more than once in your lifetime if: 

• your HBP balance for your previous participation is fully repaid at the beginning of the year you want your participation in the HBP to occur; and 
• you met all the other HBP conditions that apply to your situation.

• you acquire a home under the HBP for a related disabled person that is more accessible to or better suited to the needs of that person; or 
• you withdraw funds from your RRSP under the HBP and provide those funds to a related disabled person that is more accessible to or better suited to the needs of that person.

Under the "HBP", Revenue Canada permits you to use your RRSP funds towards the purchase of a new home. The default insurance companies support this program (when your down payment is less than 25%) in allotting the RRSP funds as a source of down payment.

a. No penalty for withdrawal

• There are no negative effects from removing funds from the RRSP —in short, individuals are able to withdraw monies from their fund without penalty:
• No tax is owed on the monies withdrawn 
• No interest is paid on the monies while it is outside of your RRSP 
• There is no monitoring of the monies while outside your Plan (see Tax Management below)

• Regardless of no penalties for withdrawing funds, there are certain guidelines that must be followed in order to remain protected under the HBP' umbrella:
• There is a maximum of $20,000 that can be withdrawn from one individual's RRSP. 
• There can be a maximum of two first-time buyers in the purchase of a new home, and each individual can withdraw up to $20,000 for a total of $40,000. 
• The purchased home must be owner occupied. 
• The RRSP must be repaid within 15 years with minimum annual payments of 1/15th of the withdrawn amount — failure to do so will result in 1/15th of the
• RRSP initially withdrawn having to be added back to taxable income in any year the minimum re-deposit is not made. 
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Summary of conditions for participating in the HBP.

A number of conditions have to be met to participate in the HBP. While some conditions have to be met before you can withdraw funds from your RRSPs, others apply when or after you receive the funds.

The following chart lists all the HBP conditions and who has to meet them in different situations.

Situation 1 - 
You buy or build a qualifying home for yourself.
Situation 2 - 
You, a disabled person, buy or build a qualifying home for yourself. 
Situation 3 - 
You buy or build a qualifying home for yourself for a related disabled person. 
Situation 4 - 
You help a related disabled person buy or build a qualifying home.
 

Situation	1	2	3		4
Person responsible for meeting conditions	Y	Y	Y	RDP	Y	RDP
Conditions to meet before applying to withdraw funds
Enter into agreement to buy or build qualifying home	Y	Y	Y	N/A	N/A	Y
Intend to occupy qualifying home as principal place of residence	Y	Y	N/A	Y	N/A	Y
Be considered a first-time buyer**	Y	N/A	N/A	-	N/A	-
HBP balance on Jan. 1 of year of withdrawal is $0	-	-	-	-	-	-
Conditions to meet when a withdrawal is made
You or your spouse can't have owned the qualifying home more than 30 days before withdrawal is made	Y	Y	Y	N/A	N/A	Y
Resident of Canada	Y	Y	Y	N/A	N/A	Y
Completion of Form T1036	Y	Y	Y	N/A	Y	N/A
Receipt of all withdrawals in same year	Y	Y	Y	N/A	Y	N/A
You cannot withdraw more than $20,000	Y	Y	Y	N/A	Y	N/A
Conditions to meet after your withdrawals have been made
Buy or build the qualifying home before Oct. 1 of the year after the year of withdrawal	Y	Y	Y	N/A	N/A	Y

** NB. 
You are not considered to be a first time homebuyer if, at any time during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal, you or your spouse owned a home that you occupied as your principal place of residence.

Establishing an RRSP with borrowed funds for a tax refund.

The "HBP" permits an individual to establish an RRSP with borrowed funds, and then use the resultant tax refund for a down payment. In this scenario: 

• The individual borrows funds that are contributed to an RRSP. 
• After a 90-day period, the RRSP is collapsed to repay the loan. 
• The client receives a tax refund that can be applied to the purchase of a home. 

The lender can verify that the borrower has proven liquidable assets equal to a minimum equity of 5% of the purchase price.

We will: 

• set up a meeting to determine each client's approximate refund amount 
• arrange the RRSP loan 
• provide a mortgage pre-approval based on the information provided 

Managing Tax Refunds

The government does not monitor the funds that are withdrawn from RRSP's for the purposes of the HBP. Therefore, providing that an individual has qualified as a buyer and has purchased a qualifying home, they may do whatever they desire with the money. Furthermore, the income tax refund received may be used in whatever manner decided, such as: 

• Clearing the balance on credit cards 
• Reducing, or retiring, personal loans 
• Making lump sum payments on a mortgage 
• Purchasing household necessities — appliances, furniture, accessories etc. 
• Increasing the down payment to reduce/avoid default insurance premiums 
• Paying for legal fees and or tax adjustments 

What else should you know?

The Home Buyers' Plan enables you to borrow money to top up your RRSP plan using accumulated RRSP eligibility limits. If your tax assessment notice indicates you are eligible for $18,000 in contributions in the current year, and you already have $4,000 in a self-directed plan, you are allowed to borrow — subject to credit approval — the $16,000 to buy the RRSP required to bring you up to the $20,000 Home Buyers' Plan limit.

Then you can claim the eligible deduction against your current year's income in order to get a large tax rebate. You can use the rebate to pay down the loan or apply it to the cost of buying the home. Here, of course, the amount of tax you're paying each year is an important factor. If the $16,000 deduction in this example results in a $5,000 tax rebate, it can be used as you see fit. If, on the other hand two partners each earning $80,000 per year take their maximum RRSP of $20,000 each in the current year, they could net a total of $15,000 or more in a tax rebate.

You are then allowed to withdraw up to the $20,000 maximum from the RRSP 90 days after topping up or creating the plan, subject to the re-deposit requirements described above.

Be Careful — If you're planning to borrow the money for the maximum RRSP, you could end up disqualifying yourself for a mortgage because your monthly payments will be too high. Your "total debt servicing ratio" — the proportion of your gross income required to service both the home related costs and other monthly obligations — may exceed the usually acceptable monthly maximum of 42%. Another $600 per month could well make the difference in whether or not you'll qualify for a mortgage. Your Invis Mortgage Consultant is the best person to advise you on this process. 
 

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Renewing a Mortgage

The Dynamics of Switching

What happens legally when you switch?

Most people are unaware of the legal effect of switching lenders. When you renew a mortgage you are essentially starting the process again — discharging the existing mortgage, taking out a new one, and beginning the whole payment process, albeit at a lower principal amount. As such, you should treat this as just as important a process as the first time you arranged the mortgage. Remember your situation will most likely have changed since then, and you will require a different product with different terms attached to suit your situation.

In most Provinces a switch of the current or lower balance requires only a simple assignment of interest in the mortgage to be executed by all parties and registered on title. This assignment also attaches the specific terms that will have legal effect, and replaces those of the transferring institution. So even though the old mortgage is still registered on title, all those old terms and conditions registered by your previous lender will be completely replaced by those of your new lender under the assignment of interest.

Moreover, the form that you are holding in your hand from the lender who did your previous mortgage financing, has a rate that probably is not as competitive as it could be. Don't let the hassle from the first time you negotiated dictate you just signing the form and sending it back to the lender — it will most probably cost you in the form of higher rates.

The lenders count on 70% of renewers just signing the form and mailing it in — they are not forcing you — but they are preying on human nature to embrace convenience. However, let us the work for you — the same convenience, at a much lower cost to you and a product and terms that will suit your current situation. The fact is that it is likely another lender will give you what you want at a rate you want — there are no legal implications to you switching. 

Choosing a Mortgage

Financing strategy for renewing/switching

As an experienced homeowner and borrower, you are probably already very familiar with the mortgage products and services of your current lender. It could be to your advantage to use another lender. Contact us today to help you make the switch. As well, here's some important information to keep in mind:

What type of mortgage should you choose?

Today, more than ever, there are numerous mortgage options available.

Don't be confused

We can help you find the best product for your needs and negotiate you the best rate. They do the research for you, enabling you to avoid the frustration and confusion of having to do it yourself, and explain the available options. 

Mortgage categories

Fixed-rate: 
6 month, 1, 2 & 3 year (open, closed and closed-convertible)4, 5, 7 & 10 year closed

Variable-rate: 
3, 4 and 5 year (open, closed, closed-convertible and capped)

Split-term: 
Combination of all possible terms (6 month through 10 years)

Self-directed RRSP: 
A specialty mortgage rate — term optional — within CMHC guidelines. Invest your own RRSP funds into all or part of your home mortgage. 

What terms & payment options should you choose?

It all depends on what you want. We will assess your personal situation and needs to find the best mortgage for you at the best rate. 

Short-term risk & variable

If rates are low and stable, and/or you are prepared to take a risk, you can generally pay a lower rate with a short-term mortgage. You simply roll over your term every 6 months, or float your rate against prime, with the option of locking in to a longer term at a later date. This is not for everyone, however, as sudden upward rate movements can have a significant impact on your payments. You may want to discuss this with us.

Long-term

Any term 3 years or longer is considered "long term" in today's economy. Because long-term rates are usually higher than short-term rates, you may not want to choose this option. On the other hand, by locking in you will avoid exposure to rate increases. You'll have the comfort of knowing exactly what you payments will be and you'll be able to manage your budget accordingly. 

Split-term

A mortgage which allows you to minimize — or hedge — your interest rate risk by splitting your mortgage into 5 parts. For example: A $150,000 mortgage could be split into five $30,000 segments with terms of 6 months, 1, 2, 3 and 5 year terms negotiated at today's best rates. The average rate would rise or fall much more slowly than changes in the market, however, as only the shorter terms are affected by even the most volatile rate movements over the first few years. Confused? Talk with us.

Prepayment options

Many lenders allow you to make a lump sum payment — usually 10% to 20% of the original principal balance. In addition, many mortgage products now include a "double-up and skip-a-payment" feature. This lets you "bank" extra mortgage payments for a rainy day, at which time you can "skip" them if you need to. Ask us to advise you on your options today! 

Payment changes

Most mortgages now allow the amortization to be adjusted by increasing the payment on closed terms by 10% — 20% per year, once annually. 

Payment frequency

Most mortgages now come with the option to pay your mortgage at a frequency that matches your cash flow — weekly, bi-weekly or semi-monthly. The added benefit of the "accelerated" weekly and bi-weekly payments is that by dividing a regular monthly payment into two or four respectively, and deducting it at the new interval, an extra payment a year is made directly against principal. The surprising effect of this one extra payment a year is to reduce the amortization of the average mortgage by approximately 5 years, with cash savings at the end of the mortgage term. 

Accelerating Your Freedom

One of the highest financial priorities of Canadian homeowners is to pay off their mortgage as quickly as possible. Most are aware that paying down extra principal in the early years by whatever means possible can shorten the life of your mortgage — and dramatically lower the interest you'll pay over the long haul. The "Pay-Off Tips" below describe some of the most effective methods of achieving this.

TIP #1: Mortgage payments made with after tax cash 

More Canadians are becoming aware that, since mortgage interest is not tax-deductible in Canada you are making mortgage payments of both principal and interest with money that you've already paid tax on — "after tax dollars". This makes it even more important to eliminate the drainage of disposable income as soon as possible!

TIP #2: Prepayments give great return on investment

If you pay an average of 6.5% in mortgage interest, for each $1,000 by which you reduce your mortgage principal, you will save $65 in after tax cash every year. If you are paying taxes at a marginal rate of 40%, you have to earn $108.33 each year to pay the interest on every $1,000 of principal outstanding...a heavy burden, but also a tremendous implied benefit to reducing this balance. In fact, the example shows that the "return on investment" for making prepayments on your mortgage is 10.833% before tax and 6.5% after tax — far better than most fixed return investments (bonds, GIC's etc.).

TIP #3: Increase your payment annually to the most you can afford 

The upside is that most lenders will allow you to reduce it again to the previous level if it turns out to be too great a burden or your circumstances change.

TIP #4: Utilize your RRSP-driven tax rebate as a mortgage prepayment method 

Even if you can only prepay annually, make sure these funds are set aside for that purpose. Many Canadians will borrow (at prime) to buy an RRSP to ensure the maximum rebate. When applied to the mortgage principal, this refund is a "gift that keeps on giving". Combining the refund with the tax-free interest earned on the RRSP over the subsequent years will quickly outpace the short-term interest costs of the RRSP loan.

TIP #5: Increase the frequency of your payments 

Make accelerated bi-weekly payments to get a "free" principal reduction equivalent to one full mortgage payment every year — painlessly. Unless you are paid weekly it makes little sense to make weekly payments. All you'd be doing is making a smaller payment, and deferring the difference for a week.

TIP #6: Make use of double-up privileges wherever possible 

Tell yourself that you will "skip-a-payment" whenever necessary... then skip only when you absolutely must.

TIP #7: Round your payments up 

By adding even a nominal amount of say, $10 per payment, the amount of interest you are saving will be unbelievable, and the extra money relatively painless to part with.

TIP #8: Pay a lump sum whenever possible 

By decreasing the principal of the mortgage, your payments will not be allocated as much to interest in the future, thereby accelerating your freedom to mortgage-free life.

TIP #9: Keep payments the same when mortgage rates have fallen 

If the payment amount has not been a problem so far, then keep it the same thus paying down the principal faster.

TIP #10: Raise payments in line with increased income on an after-tax basis 

If your income increases, don't keep your mortgage payments the same. Although the disposable income may be fun to spend on unnecessary luxuries in the short-term, the long-term benefits of being mortgage free faster and saving those interest payments will far outweigh the short-term curtailing — just pretend that your income did not increase and maintain our usual lifestyle.

DON'T WASTE YOUR HARD-EARNED MONEY ON INTEREST!

These methods have allowed many people to shorten their mortgage life by years within a very short period and enjoy a greater lifestyle for a longer period. 

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Refinancing

Refinancing, whether it be a relatively straight forward refinance of your existing mortgage balance, or utilizing your Home Equity for any other purpose desired, is a strategic financial decision that requires the assistance of a mortgage expert to get you the best deal from the hundreds of options available. Whether you want to:

• lower your monthly payment
• consolidate debt
• renovate
• pull cash out of your home
• increase your flexibility with a credit line
• break your mortgage

Tip: Did you know that when refinancing, your prepayment options may figure in to your advantage whether you have exercised them or not? It pays to inquire from the experts at Invis.

Consolidate Other Debt

Most unsecured debt is priced by your bank at a higher rate than your mortgage in order to compensate them for the higher risk of loss if you default. For many people it only makes sense to use available home equity to pay out this debt, as it typically reduces interest costs significantly. If the total of the existing mortgage and the debt to be refinanced is less than 75% of the value of your home, and you qualify in terms of income and credit standing, refinancing your first mortgage should be a breeze.

In fact, using uss the perfect way to achieve this consolidation. Get us working for you now. 

If you want to spend a significant amount of money on improving your home, you may be able to take out a lot more equity than you realize! We can advise you through this process. Both insurers — Genworth Financial and CMHC - will insure new mortgages which are "topped up" for this purpose, if the total of your current mortgage and the new funds exceeds 75% of the current home value. Not all improvements are eligible, however. Pools and spas are typical "over-improvements" which may not qualify for a high-ratio equity take-out. Of course, if the total requirement is less than 75% of your home's current value, you should have little trouble getting the "top up" you need — regardless of the degree of luxury you plan to add.

Combining Mortgages

Where the combined mortgages result in one "high ratio" mortgage:

If neither (or none) of the mortgages you're combining was ever insured, but combining them results in a high-ratio situation, you'll be required to pay an insurance premium. You need to look closely at the total savings the combination will give you, in order to determine whether this is worthwhile financially.

Where the combined mortgages result in a new "conventional" mortgage:

High ratio insurance is not required. As long as you qualify with your income and credit standing, we will help you achieve this quickly and conveniently.

In both cases there is one critical consideration which causes the failure of many such fefinances. The new mortgage often requires a fraction of the cash flow previously needed to service the now consolidated debt. Many who go through this process not only absorb the cash flow savings into an improved lifestyle — they either re-incur debt that they paid out, or incur debt for which they now qualify — or both. It is important to approach such a consolidation/re-combination of obligations with the clear and focused goal of applying all savings toward paying down the mortgage. Otherwise, the new mortgage will be a burden, rather than a solution. 

Breaking a Mortgage and Transferring

Many closed mortgages have the feature that allows the balance to be paid out with a penalty after a certain time has elapsed on the mortgage. Check the "prepayment" clause in your mortgage to determine your own situation, or better still, call your institution and ask them the cost of paying out in full.

Refinancing and Home Equity Considerations

Aside from considering the different options when refinancing your mortgage or looking to utilize the equity in your home, you as a homeowner need to understand how lenders look at your “financial situation” when deciding whether to grant mortgage financing.  By understanding what lenders look for, you will be better prepared to work with your mortgage consultant and make the whole process as smooth and efficient as possible.

There are two main areas to examine:

1. Understanding credit.  What factors about applicants do financial institutions consider?  Lenders look at the 5 C’s of Credit: Capacity, Capital, Collateral, Character and Credit. 

2. What type of borrower are you?  Common borrower profiles are risk averse, risk tolerant, and those with flexible borrowing requirements.  In this section, we offer some guidance to help you determine what type of borrower you are.  We look at some key questions for prospective borrowers to ask themselves. 

1. Understanding Credit

Remember, lenders run a business to make money, not lose it.  Those with good/better credit receive lower rates, and those with spotty credit receive slightly higher rates – the higher the risk, the higher the return for the financial institution.  As part of the application process, lenders examine prospective borrowers according to varying requirements, however central to all decisions are the 5 C’s of credit:  Capacity, Capital, Collateral, Character and Credit.

Capacity
Capacity to repay the loan is the most critical of the 5 C’s.  Is your income sufficient to support the repayment of the requested loan amount?  This is where lenders look at your Gross and Total Debt Service Ratios.  Do the monthly carrying costs of the loan represent less than or equal to 32% of your total monthly income?  Including other loans outstanding, do your loan obligations and carrying costs represent less than or equal to 40% of your total monthly income?  Prospective lenders will also want to know about any other sources of income you may have to repay the loan, in case your steady income stream is interrupted.

Capital
Capital is the money you have personally invested in the property, typically equity in the home or, in the case of home buyers, a down payment.  The amount of your own money put into the home portrays a message of confidence and trust. The more money you contribute, the less risk for the lender of losing money if default occurs, and the more likely it is that you will do all you can to maintain your payment obligations.  Capital also reflects your ability and willingness to save money and accumulate assets, confirming that you can manage your financial affairs adequately within your income.  The higher your net worth, the more you have as a cushion for repayment in the event you run into a financial setback. 

Collateral
Collateral is additional security you can provide the lender should you for some reason not be able to provide repayment.  In real estate transactions, collateral is generally the property, and the lender will want to ensure that the property for which they are providing mortgage financing is marketable real estate.  An appraisal will determine whether the subject property has sufficient value to support the requested mortgage amount, taking into consideration any deficiencies that may affect the ability to resell.  Collateral may also include such things as investments, other real estate, stocks, etc.

Character
Character is your reputation and reliability – the general impression you make on the potential lender.  Are you trustworthy enough to repay the loan?  Factors associated with your character can include your educational background, business experience, length of time at your current employment and current residence.

Credit
Credit is the evaluation of your habits in meeting credit obligations. Information about your credit history is stored at the credit agency, or “credit bureau," and indicates how well you have paid your bills over the last six years.  All major credit cards, auto loans, leases, etc. are reported to the credit bureau.  A lender will evaluate your ability to maintain your obligations and try and determine how well you live within your means.  Some individuals make the mistake of not paying the minimum monthly obligations on loans and credit cards with the expectation of making a larger payment the following month. These missed payments appear on their credit report, branding them as chronic "late-payers" for the next six years.  If there are any problems with your credit bureau, you will need to provide a full and satisfactory explanation to the lender. 

2. What Type of Borrower Are You?

We will guide you through the myriad of options that are available and get you the mortgage product that best suits your individual needs.  In order to get the ball rolling, it is helpful to begin thinking about what mortgage product options you would feel comfortable with.  By having an understanding of who you are, the mortgage process becomes more efficient and your satisfaction over the term of your mortgage increases.

Here are some questions that you should mull over and speak about with any of your fellow purchasers.  Although this is not an exhaustive list, it provides a good start.

Consideration #1: 
Is some fluctuation and change in payments acceptable?

Consideration #2: 
Do I want the comfort of knowing what my payment is every month and of knowing it will not change for the whole term?

Consideration #3: 
Do I want the lowest payment possible?

Consideration #4: 
Do I want to pay down my mortgage as soon as possible?

Consideration #5: 
How much down payment am I comfortable with, while not putting myself and my family into financial difficulty?

Consideration #6: 
Are there any credit issues about which I will need to provide documentation?

There are numerous other considerations that your mortgage consultant will cover with you, however this will be on a case by case basis and will depend on your own personal situation.

Other issues that may also have to be addressed and require special consideration are:

5. Nature of income – self-employed, commission based, or salary, for example. 

6. Status of applicant – new immigrant, foreign investor, etc.

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Self-Employed/Special Circumstances Considerations

Self-Employed? Credit Issues? Unique Income Situation?

Financing Considerations for Non-Traditional Borrowers/Situations

Invis can get you a mortgage in most situations regardless of your circumstances. Where traditional financial institutions have given the answer “No”, Invis routinely says “Yes” and gets you a product that suits your needs at an extremely competitive rate. 

Below we have provided a list of the most common non-traditional situations, however, please note, that not all situations are listed and each is looked at on a case-by-case basis to fit with the appropriate lender – each situation is unique and looked at accordingly. This is where the expertise and knowledge of an Invis Mortgage Consultant is essential in taking care of you and your family.
 
 

Employment - Self-employed	- Recent job start/change - Work experience outside Canada	- Lack of work history - Part-time
Income	- Income - Non-verifiable - Salary + commission - Seasonal	- Commission - Salary + OT and/or bonus
Credit	- Spotty/bad credit - No credit	- Good, but a lot of credit - Previously bankrupt
Property	- Rental - Construction - Cottages/vacation homes - Multiplex - Investment	- Rural/acreage - Mobile homes
Status	- Non-resident	- New immigrant
Financial	- Zero-down	- Purchase plus improvement

If you fall into one of the categories above, or if you have a different situation, Invis’ expert mortgage consultants know where to go and how to structure the deal. Contact Invis immediately and have peace-of-mind that your mortgage needs are being well taken care of.

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Buyer & Seller Info
 

Programs Available To First Time Buyers 

There are a number of programs available to first time buyers, that aid their ability to become homeowners. One such program is the ability to buy a home with as little as 5% down. In some instances you may qualify to purchase a home with No Money Down. For more information about this program, contact Tim. These programs give people an incentive to purchase by creating an opportunity to own their own home without having to accumulate a large down payment. There are special terms and conditions attached to many of these programs. For instance, insurance fees apply if the down payment is below 25%, and at the highest end equals approximately 3.75% of the mortgage amount. Please click here for more information.

There is also the federally instituted Home Buyers' Plan which allow individuals to take advantage of their RRSP without being penalized. Of course there are conditions that have to be met by the individual or individuals over time, and the property has to be a qualifying property, but nonetheless, this program is a great incentive for individuals to own their own home. 

There are also numerous mortgage products available from lenders that an Invis Mortgage Consultant can explain to you. You should take into account that the first year of owning a home is when individuals have the most difficulty in making payments since they have apportioned large amounts of funds to the down payment. A lot of lenders also have cash back mortgages which give the consumer a percentage of the mortgage back in cash for their own use – closing costs, mortgage payments, furniture, incidentals arising from moving and so forth.
 

Buyers Tip: Winning the Bidding Wars 
by Marcie Geffner

Hot real estate markets bring out the worst in everyone. Sellers become greedy and demanding. Buyers become desperate, frustrated and disillusioned. And real estate agents get caught in the middle as they try to negotiate purchase contracts that are acceptable to both sides of the transaction.

Along with frayed nerves, hot markets mean multiple offers will be received for just about every for-sale home. These bidding wars are great for sellers, but they add to the "freaked out" factor for buyers. How can you buy the home of your dreams when several other people are also bidding on it? Here are five tips:

• Make your best offer. Let's face it, the bottom line is the most important consideration for most sellers. They're naturally looking to sell their home for the highest possible price. If you want to win a bidding war, offering the highest price – something attractively above the asking amount – is a sure way to get the seller's attention. Most sellers who receive multiple offers only seriously consider those at the top of the price heap. 
• Cover the seller's costs. Of course, price is only part of the equation when it comes to the seller's net proceeds from the sale. An offer with a slightly lower price can triumph if the buyer agrees to incur more of the transaction costs, like the penalty on discharging the seller's mortgage. 
• Show you're serious. Offer to make a large money deposit and as large a down payment as you can. Putting more money on the table up-front shows the seller you're serious about the transaction and willing to put your money behind your intentions. 
• Get pre-approved. Attach a copy of your mortgage pre-approval letter to your purchase offer. A pre-qualification letter is helpful, but a full approval, subject only to an appraisal of the property, is even better. Sellers favor buyers who demonstrate that they're financially able to close the transaction. Agents advise getting your pre-approval letter from a local mortgage broker or lender who has a good reputation among the local agents. 
• Don't add unusual or unnecessary contingencies or requests to your offer. Sellers know extra contingencies (e.g., the approval of in-laws, the sale of another residence) can delay the transaction or create a loophole for the buyer to bow out of the agreement. Special requests (e.g., the right to purchase appliances or move in early) complicate the offer and distract both sides from more important elements. On the other hand, don't waive standard inspection and financing contingencies unless you thoroughly understand the considerable risks. 

An Easy  Guide to Buying Your First Home 

A lot of prospective homebuyers do not know where to start or what to look for when buying a new home. Here is a basic step by step guide that will help you on your way: 

• Decide what you want – depending on your situation and lifestyle different amenities will reflect the areas which will be of the most benefit. However, this has to be balanced against the price range in which you can qualify or feel comfortable being in. 
• Get a pre-qualification – nothing feels worse than finding the ideal home in the perfect area, and then not being able to get the financing to close the deal. A pre-qualification will provide as a reality check prior to mapping out your life in a home that you cannot afford.
• Find a realtor – although not imperative, a realtor knows the process inside out, knows how to negotiate a deal, and possesses a wealth of information and contacts that can answer your questions and put you at ease. Tim can recommend a realtor to you, as well as any other related professional you need – lawyer, appraiser, insurer etc. 
• Get a written pre-approval – by calling, filling out an online application, or speaking to one of our mortgage consultants you can be pre-approved by any one of our numerous lending partners. After that, there is no more worry about the ability to complete your home transaction. 
• Go out & get that house – it's now time to go out and find the home that fits all of your criteria. Remember, use your realtor or any other information source as much as possible to ensure that you are getting what you are bargaining for. 
• Negotiate an offer on the property – if you are not using a realtor, or you want to have a better understanding of the negotiation that is taken place, read "Negotiating Tactics and Strategies Can Make or Break The Home Sale". 
• Finalize an offer on the property – After a successful negotiation, you now have your home. To finalize the deal you need to have the home inspected by a professional home inspector, and you need to get a lawyer. We can provide you with all these contacts, and can help you take care of the details. Our association with the  Canadian Lawyers Network, a national association of law firms that specialize in real estate and mortgage transactions, ensures that you receive top quality service at extremely competitive pricing. 
• Be prepared – As your closing day comes closer and closer, don't forget all the other things that need to be done – i.e. fire insurance. At Invis we help you to ensure that the mortgage transaction goes smoothly and with as little stress as possible. 

Negotiating Tactics & Strategies Can Make or Break the Home Sale 

In a perfect world, real estate closings would occur over night, sellers would keep every promise made, and both buyers and sellers would negotiate openly and fairly. Unfortunately, welcome to the real world where buyers whittle at the purchase price, closings are postponed, and both sets of players use negotiating gambits to win advantage. 

No matter which side of the transaction you're on, it's vital to learn to identify various negotiating techniques and their respective antidotes to achieve a win/win real estate transaction. 

Negotiating Tactic #1: Nickel-and-diming 

Antidotes: 
As the seller, it's not necessarily price but net proceeds that you should focus on. Some lower-price sales can actually put more money in your pocket than a higher offer that asks for various terms and conditions that you are not prepared to deliver. As the buyer, remember that everything is give and take; and in tough seller markets, you stand to lose the property to a higher offer if you play the nickel-and-dime game too long. If you really want the property (and can financially afford it) play the cheap card in moderation and give the seller a fair offer. 
 

Negotiating Tactic #2: Good guy/bad buy 
This gambit occurs when a party wants time before making a decision (often on a counter offer) and/or wants to sway the direction of the sale. 
 

Antidotes: 
If you're working through a real estate agent, he/she will probably try to present the offer to both spouses simultaneously. If you're working alone as a for-sale-by-owner, make the appointment to present for a time when both spouses are present. If only one of the parties shows up, ask if joint consensus is needed to make the final decision or if s/he is empowered to speak for both parties. Get signatures on all paperwork as soon as possible. 

Negotiating Strategy #1: Higher authority 
One or both of the players must defer to a third party for answers and/or approval. The higher authority could be a lender, an appraiser, a relative, and even a boss. 

Antidote: 
If you're making an offer that requires a response, set short time frames for the other party to respond back unless unreasonable (i.e. out of town buyer). Communicating to the buyer that you know s/he is capable of making sound decisions, with or without a third party, will quickly tell you if a higher authority is needed. If so, consider it a necessary roadblock with a timeframe that you'll have to deal with. 

Negotiating Strategy #2: The stall 
The stall is a decision not to make a decision. 

Antidote: 
Ask the stalling party to isolate their concerns about the offer. While you need to build the party's desire to accept the offer, don't forget that you have a powerful negotiating tool – revocation of the offer before acceptance. While this may seem like a dire measure, there's no harm in communicating to the party that you understand this option – This may be just the nudge needed to precipitate a decision. 

Negotiating Strategy #3: Reduce-it-to-the-ridiculous 
The idea is to make something you're negotiating for seem so insignificant, that the other party would appear a fool to say no! 

Antidote: 
As the seller, turn the table and show the ridiculousness of a buyers comments without insulting them – i.e. equate a sum of money into cost in cents per day to buy the house. 

The bottom line is that neither buyer nor seller gets to win all of the marbles; contrarily, no one should lose them all. Identifying negotiating gambits and more importantly, their antidotes, can help you structure a win/win transaction where all parties feel as though they've compromised, but won. Good luck with productive and fair negotiating! 
 

Multiple Offers: How Can You Compete? 
by Blanche Evans

In a hot market, there are more buyers than homes for sale. Prices may rise, and the days a home is on the market may shorten to a week or even less than a day. Some homes will sell before they are even registered in the local MLS. That means that sellers are often presented with multiple offers. How can you position your offer to be the one the seller accepts?

The best way is to gain an understanding of how multiple offers work and how they benefit the seller. Multiple offers mean that the seller has his/her pick of offers, but that doesn't necessarily mean a disadvantage for you as a buyer. You just have to determine how badly do you want this particular home. If you want to compete in a multiple offer situation here is what you will need to know:

Price & Terms
There are two things that matter to the seller – price and terms. They want the highest price possible, and the best terms available. Both of these areas leave room for negotiation. Just because a seller is entertaining multiple offers doesn't mean you don't have a chance. You just have to hit the right note with the seller that the other contracts don't.

Just to give you an idea of how important terms are to the seller, let's look at a hypothetical situation. You offer a seller the highest price for his/her home, but you put in the contract a contingency that you must sell your home first before you close on the seller's home. It may seem reasonable to you, but these are terms that the seller has no reason to accept. Why would s/he wait for you to sell your home first?

The seller will only accept terms which meet his/her own needs, so keep contingencies to a minimum. Ask your agent to find out from the seller's agent what terms will be most favorably viewed by the seller.

If you can't get there first, get there the best way you know how
In a multiple offer situation, the seller is not under any obligation to negotiate with the first buyer who submits an offer. So, if your offer is not the first offer, don't panic. Because the seller has the liberty of choosing the best offer to negotiate, your offer stands a chance of being noticed.

As you already have learned, the seller will accept the offer that best reflects his/her needs. They not only consider price, they also look at such things as financing and possession dates. That means room to negotiate for you.

Believe it or not, the highest price doesn't always buy the home. Sellers have a number of needs aside from price; they want a quick closing, or a delayed possession, or they may wish to exclude items in the home, and so on. Any offer which puts any of these goals at risk will not be accepted.

A buyer may make the highest offer, but perhaps has not been qualified by a lender. A seller who accepts an offer from an unqualified buyer is taking a substantial risk. Should the offer fall through because the buyer fails to qualify, the home will lose valuable marketing exposure and advantage. In a hot market, many sellers won't even entertain offers presented by unqualified buyers. (Hint: Get pre-approved for a loan. Not only will you know exactly what you can spend, you will demonstrate your seriousness to the seller.)

Your seller may have a special need that is more important to them than price. For example, your seller may have a need to sell quickly, but remain in the home for a period of time until school is out or until a transfer takes place. Your ability to negotiate on this point may be more important than coming up with the highest dollar amount. You can offer a short-term lease post-closing or offer to delay possession to accommodate your seller.

You can do a number of things to get the seller's attention – offer to pay full price, or a little above the asking price. Work with your agent to determine the seller's "hot" buttons, and act accordingly within your budget and your own needs.

Deadlines can be deadly
Don't assume that the seller has to respond to your offer by your deadline. Deadlines are only important to the seller if s/he plans to either accept your offer or wants to keep the negotiations going.

By the same token, if the seller counters your offer and gives you a deadline for accepting, and another offer comes in that is more attractive than yours, the seller can withdraw his/her counter offer to you in writing and accept the other offer.

Don't falter in the negotiations
Don't assume that because your seller is negotiating with you that s/he can't entertain other offers. All it takes is for one party to make a change that the other party doesn't accept and negotiations are over.

In fact the seller's agent is under no obligation to let your agent or you know if there are other contracts on the table or not. The seller may be waiting to see your best offer before accepting another offer that may already be on the table. Multiple offers are often used by sellers to improve upon the asking price or terms. The sellers agent may be instructed by the seller to ask the buyers to "submit improved offers."

This is the time another offer can slip in and take your momentum away.

Answer promptly and with as much generosity as you can muster. Don't nickel-and-dime the seller with requests for small repairs, or complicate the contract with contingencies. Just ask for a repair allowance and take care of the problems yourself.

Hot markets don't stay hot forever
Hot markets may be hot for a while, but there may come a time when they will cool. The home you are so anxious to get now may level off in value very shortly. Make sure that this is the home you want no matter what the market conditions say. The home's history may be helpful here. Ask your agent to provide you with the home's history or a history of comparables in the area. If a home has been sold several times in the last few years, the history can tell you why and how much was gained or lost by the sellers involved.

Also look at the affordability of the home. Are the extra considerations you are offering to stay in the contract really worth it? Do they price the home out of your range? Will you be able to afford the other costs associated with move-in such as furniture and updates?

Know when to throw in the towel
There may come in a time when it is wise to simply give up and move on to another home. Some sellers, in a multiple offer frenzy, will simply make unreasonable demands. Some will even demand offers beyond those which can be justified by comparables or local lender guidelines. Lenders have a ceiling on what they will lend on homes in a given area and it can be broken down by square foot, age, history, and other factors. If the comparables don't justify the price, the lender may refuse to take a chance on being the first to raise the loan limits on a certain neighborhood or home. You might as well throw in the towel. Sometimes a lender's refusal can be the kick in the pants a seller needs, however, and s/he may agree to your price when confronted by the voice of reality.

The best way to position yourself as the buyer whose offer is accepted is to work closely with an agent who can help you step by step from getting pre-qualified for a loan, to helping you find homes in your pre-approved price range, to helping you negotiate the home of your dreams. 
 

Buyer Tips for Negotiating Price 
by Julie Garton-Good

You want to make every dollar count in the purchase of your home. And one way to make it happen is to employ sound negotiating tactics that make a difference between small cents and dynamic dollars.

So let's cover steps you can take to negotiate a fair price with sellers and not leave money on the table. It's perceived that price is often a major concern with sellers. In fact, a common seller's lament is "We have to get our price because..." (I'm sure you can fill in the blank with statements you've heard).

But it's really not the highest price sellers are after – it's the greatest net proceeds from the sale. "Net" is determined by subtracting the seller's closing costs and any outstanding loans, liens and other financial encumbrances from the sales price. A second way home buyers lose out when negotiating the purchase price is to make a low, often ridiculous first offer. Yes, I know, sellers sometimes do take less (even though it's done far less often in the today's strong seller's market.) Put yourself in the seller's position. How happy would you be in continuing negotiations with a buyer who had just insulted you and your property?

First offers set the stage for all other negotiations that follow. In fact, the seller may become enraged and refuse to make any counter offer back to you. Or if there is a counter offer, the seller might turn the tables and insult you by asking for a price higher than what the property's listed for. (Yes, this does happen in a hot sellers' market!) If you do make a lesser offer, be prepared to defend why such as repairs to be made, etc. Sellers will be more willing to listen to a price cut if it's rationale and fair.

One last tip – earnest money does talk. When evaluating two offers side-by-side, the one bearing the heftiest amount of deposit gives the perception that the buyer is more serious about the property and is perhaps a better financial risk (even if it isn't true!) This is an important tactic in a seller's market where many buyers are vying for relatively few properties with multiple offers to the seller simultaneously.

When it comes to negotiating the purchase price of your home, neither buyer nor seller get to win all of the marbles! Decide how important purchase price is to you and negotiate with that priority in mind.

Can I Relax Now That My Loan is Approved? 
by Dena Amoruso

When the question, "Is it safe?" is posed, somehow Dustin Hoffman in the movie Marathon Man comes to mind. If you recall, Olivier's ill gotten fortune was indeed not safe after all.

When new homebuyers begin feeling rather smug and complacent after their loan is pre-approved, they somehow think they can go on "autopilot" while their house is being built. The truth is, a solid loan pre-approval with no conditions is a fairly safe bet that everything will sail smoothly, but it certainly is no guarantee.

During the months a new home is being built, varying factors can enter into the "picture" the loan officer painted of the homebuyer and his ability to re-pay a mortgage loan to the lender in question. Most of these factors and responsibilities sit squarely on the shoulders of the homebuyer himself. Safeguards for buyers (borrowers) to observe after the loan pre-approval and before the home's completion may include the following:

Changing jobs:
Buyers represent themselves as being employed in a particular line of work at a particular rate of pay, and may offer the lender promises of salary bonuses or future commissions during the escrow process. This may all look great to the lender, with verifications received from the homebuyer's employer of all of the above. The danger here is in making a change after the fact. Many lenders agree that borrowers must have at least one years' stable employment history with their employer, and if they must change jobs, they should stay in the same line of work, have no gaps in employment whatsoever, and leave only for a higher rate of pay. If bonuses and predicted overtime are forfeited (they were not guaranteed) due to a change of this kind in employment history, the lender must be notified that qualifying conditions may have been altered since the original pre-approval was issued.

For that reason, many lenders would advise buyers to fight the urge to make a change in employment until after close, just to be completely safe.

Credit worthiness:
During the "feel good" stage, anticipating the completion of their new home, buyers oftentimes go crazy purchasing high ticket items and racking up major charges on credit cards. Buying furniture, deciding they want a newer car in the driveway, and arranging for thousands of dollars in new appliances have a way of adding up and kicking many homebuyers where they least expect it, suddenly affecting their credit scores and loan ratios. The rule of thumb here is: make every payment due on mortgages, cars, etc. and try not to take on any more or it may preclude you from qualifying when fresh credit reports may be reviewed prior to closing.

Communication:
Homebuyers, after a pleasant meeting with their loan officer and a subsequent pre-approval is issued, tend to believe that no news is good news. In theory this may be true, but only from the lender's side of the desk. After all, your loan officer does not have the obligation of calling you weekly to see if any material changes have taken place in your employment status, your money reserves or your credit worthiness. He or she will also not check weekly or monthly with you to see if money has since been removed from some of the accounts already verified. It is therefore incumbent upon you, the buyer, to communicate any changes of this sort on a regular basis directly to the loan officer. Communication is definitely the key here, and the responsibility rests primarily with the borrower to maintain his approval status.

The scary thing for homebuilders is the risk they take in banking on the loan pre-approvals, using them as a green light to build and personalize homes based on the premise that nothing basically will change. The hard truth is, some pre-approvals can fall apart due to buyer neglect and mismanagement of their assets and credit-worthiness. In these cases, builders must try to re-market the homes that lose their original buyers to others who may not be willing to pay for items already ordered and installed, and the builder loses money.

Homebuyers may want to think of themselves as posing for a portrait at the time of pre-approval. Nothing should basically change within that portrait until after they close on their new home. No flinching, changing outfits, or background landscape alterations should take place, with the pre-approval photo "frozen in time." With that posture in mind, they may at last be able to breathe easier and look forward with confidence to moving day.
 

No News from the Seller? – Not Necessarily Good News 
by Julie Garton-Good

What's the standard time frame for a seller to accept an offer? There's no such thing as a standard time frame, it depends on how active the market is, how many other offers (if any) the seller is considering as well as the seller's individual situation and availability (i.e. one of the spouses being out of town, etc.)

It can vary based on the buyer's needs, the seller's needs – even customs in a local real estate market. Timeframes are initially specified by what the buyer or his/her agent specifies on the purchase agreement. Once the seller sees the offer, he has the opportunity to amend the timeframe specified by the buyer; but to do so constitutes a counter-offer, a brand-new offer that the buyer doesn't have to accept.