Archive Monthly Archives: June 2010
Toronto Mortgage Broker – Joe Walsh
“If You’re In Need of a Real Estate Mortgage in Toronto, Should You Be Working With a Toronto Mortgage Broker?”
First of all, I’m totally biased when it comes to working with a mortgage broker or not. I believe in our profession and the value we provide our customers. And if you look at the numbers, 25% of all mortgage in Canada are placed through mortgage brokers as well as 44% of first time mortgages.
I would also say that all mortgage brokers are not created equal. While all mortgage brokers and mortgage agents are qualified to conduct their craft, there are varying levels of experience and specialization that can make a difference with different application scenarios.
For instance, there are mortgage brokers that only focus on residential bank or institutional mortgages. It only makes sense that these individuals are going to have a harder time helping you locate and secure a complex construction financing requirement if its something they’ve never worked on.
Even within a residential or commercial focus, there can be a big difference between bank mortgage, B lenders, and private mortgage lender requirements. Some brokers will have experience in all three layers of the market, some will not have very much. Some will have a stronger support network to assist with deals and some will not.
So one of the key things to take into account when considering different Toronto mortgage brokers is their experience related to the type of real estate mortgage you require. How do you determine this? Go through your scenario with a mortgage broker you’re interested in working with and ask about their related experience in what you’re trying to accomplish, references they can provide, the process they will follow. If you don’t feel comfortable with the answers you’re getting then you’re probably better off interviewing more brokers.
In my experience, most of a borrower’s selection process is their comfort level with any given broker which only makes sense indicating that you should not ignore your instincts before making a selection.
Personally, I take great pride in what I do and I view each client as a partner in the completion of the mortgage application process. I need their help to get the job done properly and I want them to be satisfied with the final result.
If you are looking for a Toronto mortgage broker for a residential, commercial, or construction mortgage requirements, I suggest you give me a call so we can discuss your requirements and see if it makes sense to work together locating and securing a mortgage that will meet your needs.
Toronto Private Mortgage Broker
“Toronto Private Mortgage Brokers Will Provide You With Direct Access to Private Mortgage Lenders in Toronto and Other Parts of The GTA”
If you’re trying to locate and secure a private mortgage in Toronto or in some other part of the Greater Toronto Area, then the best approach you can take is to select a Toronto private mortgage broker to work with.
A private mortgage broker has the same qualifications as any other licensed mortgage broker. The key difference is that they have developed relationships with private mortgage lenders in the local area for different real estate property mortgage applications.
Most mortgage brokers only work with bank or institutional mortgage sources and if they do have access to a private lender, it may only be one individual which will limit the scope of what they can help you with.
Mortgage brokers that spend time to develop private lending sources will have greater access to this market and will be able to provide you with options much quicker than through a broker that doesn’t have a private money focus.
The private mortgage broker route is also important for another couple of reasons.
First, it can be hard to locate a relevant source of private mortgage financing without a knowledgeable broker as many private lenders only work through broker networks.
Second, by working through a mortgage broker that has an existing relationship with a private lender, its more likely that you’re going to be dealing with a reputable lending source versus an individual lender that may be difficult to work with.
Third, private mortgage rates can vary from deal to deal and its more likely you’re going to get closer to the best available deal at a given point of time working through a private mortgage broker that knows the market versus doing it yourself or working with a broker that does not have a focus placing this type of mortgage.
Fourth, while most private mortgages are only for one year, if you have a need for a longer period of time, there are privates that will consider multiple year terms, but they can be hard to find, and harder to find still without the right Toronto private mortgage broker working with you.
Click Here To Speak To Toronto Private Mortgage Broker Joe Walsh.
Toronto Home Equity Mortgage
“Here’s The Best Way To Get The Best Rates and Terms on Your Toronto Home Equity Mortgage”
First of all, a home equity mortgage is a mortgage program that is designed primarily for self employed individuals who may not qualify for a standard mortgage due to the way they report annual income.
Most mortgage programs qualify repayment by some combination of your wage stub, annual T4 slip, letter of employment, and annual notice of assessment from the Canada Revenue Agency.
With self employed individuals, there can be significantly more flexibility in how and when they are reporting their annual income as well as their allowable expense deductions, causing the above income verification sources to not be sufficient for a bank or mortgage lender’s repayment assessment.
This is where the home equity mortgage programs come into play. Under these programs, provided you have at least 75% of the purchaser price to put down as a down payment, banks and other institutional mortgage lenders will allow you to declare what your annual income is and may even require you to sign a sworn affidavit to that effect in front of a lawyer or notary.
Different programs have different qualifications for the home equity mortgages they support such as the number of years self employed, proof date business or corporation was registered, proof of self employed earnings from arm’s length customers, and so on.
Applicants are still going to have to qualify in all other respects in a similar fashion to a wage earner. This will include an acceptable credit score and credit profile.
And while there are several of these programs around, mortgage lenders are always changing policies, terms, and rates to best suit their portfolio and overall risk management requirements.
As a result, it can be hard to figure out which Toronto home equity mortgage is going to be the best fit for you and your family.
The best approach is to work with an area mortgage broker that works with this type of program on a regular basis and keeps up to date with the changes made by the lenders providing services to this segment of the market.
Mortgage brokers also tend to develop direct relationships with the mortgage lenders, providing them with a stronger voice to properly position your application which would not be possible for just an application at larger. And because brokers do not have any direct affiliations with mortgage providers, they are free to shop the mortgage market for the best possible deal that is available to you at a given point in time.
Mississauga Private Mortgage Solutions
“How to Locate and Secure Mississauga Private Mortgage Solutions For Your Residential or Commercial Property”
One of the benefits of today’s mortgage market place is that there has been an increase in the amount of private money that is available to borrowers, especially in the Mississauga and Greater Toronto Area.
The hard part with private mortgages is locating private mortgage lenders in the first place and then trying to determine if they are the best fit for your deal.
Most private mortgage funds are placed through mortgage brokers as they have better direct access to the market needs than an individual private lender or private lending corporation.
But mortgage brokers can’t always provide you with the best available options for private money as they will likely only be working with a small number of privates. Some won’t work with any directly, but will try to access private lenders through other brokers.
The reason why its important to be able to shop the market for private mortgage loans, especially in strong real estate markets like Mississauga, is that private lenders have gotten more competitive on the better deals with interest rates rivaling bank or institutional rates in some cases. If you take the first deal that comes along, you may be paying more than you need to.
A second point to keep in mind is that even though there is a lot of private mortgage money around these days, it can come with very different focus areas. Some private lenders may primarily only do commercial mortgage deals, and even more specific, commercial construction. If a private lender gets a deal outside of their primary focus, the rate is likely going to be higher due to greater unknown risk. This could result in you paying a significantly higher rate than what’s available in the market for your deal.
The third point I would make is about time. If you’re pressed for time which can be the case with many private mortgage deals, then you want to immediately be focusing in on highly relevant lenders that are going to be the best fit for your deal. If you’re not working with a mortgage broker that is well positioned for your needs, a lot of time can get wasted and higher costs incurred in the long run.
If you have a private mortgage financing need, give me a call so I can quickly assess your requirements and immediately get you in touch with relevant Mississauga private mortgage lenders.
Toronto Bad Credit Mortgage
“Here’s How To Locate And Secure A Toronto Bad Credit Mortgage”
First of all, what is bad credit? There are varying degrees of bad or poor credit, each with different financing applications.
Bad credit in general refers to a low credit score and a poor credit repayment record. But each person’s credit profile will tell a different story which can result in different potential mortgage options.
For many institutional lenders, if you don’t have a credit score of 650 or higher, you will not be eligible for their best rates and in some cases they won’t consider you at all.
With credit scores below 650, there are still bank or institutional mortgage sources that can provide reasonable rates, depending on the reason for the poor credit. For instance, it you were away for an extended period of time and accidentally neglected to pay an outstanding credit card balance for a few months, your credit score is going to get hammered, but the severity of the credit issue is very low which will be taken into consideration by certain lenders.
If you credit is below 500 and you have a history of continually missing payments on a number of loans and credit cards, then any type of mortgage financing is going to be difficult to secure because no one wants to constantly be chasing a borrower for late payments.
You can also have a credit score below 500 for events that have happened in the past, but you can also show one or two years of constantly improving credit by you incorporating better credit management practices.
The point here is that bad credit mortgages in Toronto are going to need to be considered on a cash by cash basis, with different options potentially available for different credit profiles.
The best way to determine what bad credit mortgage options are available to you is to work with an experienced mortgage broker that has a focus on bad credit mortgage financing applications.
The mortgage broker will be able to review your credit with you and quickly assess the mortgage lenders that are going to actually be able to help you or will be interested in your deal.
This is going to avoid wasting time with mortgage providers that are likely not going to be able to provide a Toronto bad credit mortgage.
If you require a Toronto bad credit mortgage, give me a call so I can assess your situation and discuss relevant options with you.
Bridge Mortgage Toronto
“Here’s How to Locate and Secure Toronto Bridge Mortgages For a Variety of Real Estate Transactions”
Do you have a real estate deal that threatening to fall apart due to your inability to locate and secure the required mortgage financing?
Do you have a financing need that hinges on leveraging a piece of real estate property to secure a short term mortgage?
Are you involved in a construction project that has run out of money and needs some additional capital to complete the work?
In all these scenarios and many others, a Toronto bridge mortgage may very well be the solution you require.
Remember that a bridge mortgage by definition is for a short period of time that has a defined beginning and end date and a solid exit strategy for repayment. When these conditions exist, a bridge mortgage may be able to be arranged in very short order.
In some respects, most private mortgages are bridge loans in that they are typically only issued for a term of one year or less. There are exceptions to this, but for the most part private mortgages are very short term in nature.
The keys to being able to secure a bridge mortgage in Toronto is to work with a mortgage broker that has a focus on bridge financing requests and works with lending sources that provide bridge mortgages in your immediate area.
This is key for a number of reasons.
First, by working through a well established mortgage broker, the lending sources you are exposed to are likely going to be legitimate private lenders that have been pre-qualified by the mortgage broker and with which the broker has an ongoing relationship. There are all sorts of real estate lending scams out there, so you want to make sure you’re avoiding potential sources of financing that will do more harm than good.
Second, private money is very regional in nature, so unless you’re working with a local source of financing, its unlikely you’re going to be successful securing financing in the time required.
Third, different sources of bridge mortgages in Toronto will focus on different types of financing requests. By working with an experienced mortgage broker, you will end up talking to relevant sources of bridge mortgage financing sooner which will get your financing in place that much faster.
Bridge mortgages in Toronto will cost more than a bank mortgage, but the added cost is for speed and a certain amount of application flexibility that you may not get working with a bank or institutional lender.
If you require a bridge mortgage in Toronto, I suggest you give me a call today so I can quickly assess your requirements and provide relevant local options in as little as a few hours.
Bank Rate Goes UP – Residential Mortgage Rates Stay Put
“The Anticipated Bank of Canada Rate Increase Does Not Impact Residential Mortgage Rates”
The much anticipated Bank of Canada interest rate increase took place as anticipated on June 1, with the central bank rate moving up from 0.25% to 0.50%.
At the same time, the long term bond rate dropped, providing some mortgage providers to actually drop rates.
It is very uncommon for short term rates to rise while long term rates are falling, but we live in strange times to say the least. All the financial fallout in Europe has pulled down the bond market which provides mortgage lenders with a lower cost of capital.
With more global economic uncertainty, the seems to be the same upward pressure on interest rates that we were seeing just a month or so ago. While near terms rates are still very possible, there seems to be a growing possibility that rates will not move any further for the foreseeable future.
So with all of that said, what does it mean to residential mortgage holders that have variable rate mortgages or that are looking at fixed rate products.
The continuing message is to make sure that you are aware of what your cash flow is going to be able to handle. If you’re like 33% of Canadian mortgage holders that are taking advantage of variable interest rates, the prognosis for variable rates to stay low are pretty good. But even small movements in mortgage rates can be more than some cash flows can handle. So make sure you have a good grasp on the wiggle room you have in your monthly cash flow so you can proactively project how much of an interest rate increase you can sustain before it starts to impact your monthly payment requirements.
One thing is for sure, rates are going to continue to ebb and flow, based on a lot of things we have no direct control over or even understanding of, like the financial dynamics in the European Union.
Hopefully the current run of low mortgage rates will continue. Just make sure you can adjust to higher rates if and when they occur versus just hoping that they won;t.
Residential Mortgage Penalties
““Why Are Residential Mortgage Penalties All Over The News These Days?”
The answer is pretty simple…a dramatic decrease in interest rates. This means most mortgage holders are locked into higher rates. This means higher penalties to break the mortgage. (Keep in mind you are ‘breaking a contract’ – that’s why they call it ‘Penalties”)
Fixed-rate closed mortgage holders must pay three months of interest or make up the difference in the interest rate (whichever is greater) as their penalty for breaking the mortgage before the end of the term. Depending on the length of time outstanding on the mortgage term, the fixed interest rate, and the amount outstanding, the mortgage prepayment penalty can easily get into the $5,000 to $10,000 range. Each Lender may have a different way of making the calculations but generally it is an interest rate differential between the current rates and the fixed rate you’re locked into.
The difference between your mortgage’s fixed rate and the posted interest rate for the term closest to the number of months left on your mortgage. They also take into account the amount of discount you originally received when the mortgage was given.
So what can be done to minimize costs? One way is to ensure that you make a lump sum prepayment before you payout the mortgage. Some lenders allow as much as 25% of the original mortgage amount to be paid down without penalty. Even if you have to borrow off other sources of financing for a short period of time, this is an effective way to basically get rid of 25% of the prepayment penalty.
Another way is to consider porting the mortgage to the new house. Not all mortgage providers will offer this option, but if they do, its definitely something to consider.
In the case of a debt consolidation, you might also be able to get a mortgage increase with a blend in rate. Under this strategy, the lender blends the old rate on the old mortgage funds with the new lower rate associated with the incremental funds. The result is an interest rate that is somewhere between today’s low rate and your current mortgage rate.
It’s important for homeowners to evaluate their situations with a mortgage expert. Most consultations are free; this should be less than the cost of trying to figure it out alone and get hit with a hefty surprise on closing.