I was at an investment meeting this past week – met many amazing people who are investing and/or just starting to invest. Invariably the question asked is always “how many investments do you own?” or “where are you in your investing career?” This is all before we even introduce ourselves or tell each other our names.
After the third time this happened, I stopped, I looked the person in the eye and said “Hi, my name is Amina and I live in Newmarket, how about you?” I did not say I am an investor or that I am a mortgage agent first, I told them who I was in one sentence and if they were interested in learning more than I went on from there. Thankfully most were and as I walked around the room, I could hear snippets of people using the same strategy and it was like a sigh lifted around the room, as people really got to know each other – aside from how many properties they owned or what they did for a living. Continue reading
Last week a colleague and fellow investor called me seeking a mortgage for a property she wanted to purchase in Amherstburg, Ontario, which is just outside of Windsor. As part of her financing, she wanted to include a VTB (Vendor Take Back). A VTB is when the seller offers financing on their own property they are selling. For instance you might have 75% LTV from the lender or bank; a 15% VTB from the seller and 10% from your own funds.
Sellers do this in a tough market, or as an incentive when they can’t sell their property or even to help the buyer when they have a shortfall in funds. Most of all a seller looks for tax deferral as they don’t have to pay capital gains until the portion lent is fully repaid. Continue reading
For the last few months I have been working with numerous other Rent-to-Own companies to help them qualify either potential tenant/buyers and/or potential investors.
One problem I have been coming across specifically is the lack of credit. Too much credit can cause just as many problems as no credit or lack of credit.
Some people are in the enviable position of paying for every purchase with cash. This is great – except for when it comes to establishing credit. The strength of your credit history determines if you qualify for a car loan, mortgage or even credit card and also at what interest rate you will pay. Lenders will use credit reports and credit scores to quickly assess an applicant’s creditworthiness and to check their credit history.
For new or young borrowers or even borrowers who suffered damage to their credit and are now scared to have any credit, however, this poses a serious catch-22: How do you qualify for credit without a credit history, and how do you rebuild a credit history after it has been damaged. Continue reading
Recently I had a client approach me for a mortgage. I first met her when I was filling my property with a Rent to Own strategy. At the time, she was looking in an area outside of where I am currently investing.
She recently approached me to request a mortgage as her income is good and her beacon score is decent. She is in the mid 600’s.
However, she had collections from the Ministry of Finance and a loan through a company, called Easy Financial that charges 42% annually. She also had previous collections that would not come off her bureau until for another 3 and 4 years respecitvely. With Easy Financial, she was making only the minimum payments and at that rate it is simply too difficult to pay down and she was basically drowning! Continue reading
When I go out to networking events, I love to talk about mortgages, the benefits of one type of mortgage over another and it invariably leads to a discussion about rates.
I was speaking to somebody about posted rates vs. discounted rates and thought it would make for a great article.
He admitted that like many people out there when he would get his renewal letter he would just sign it back without going through the trouble to see if he could get a better rate. Continue reading
When it comes to mortgages, many of us get frustrated trying to figure out the penalties to get out of our mortgages before the current term expires – this might be due to a refinance (debt consolidation, equity take-out for reno’s, etc) or because we are moving and don’t have a mortgage that moves with us. There are numerous reasons why someone might not finish the term on their mortgage – but there are not numerous solutions to the problem!
IRD (Interest Rate Differential) charges compensate a lender for lost interest when you prepay large portions of a closed (fixed) mortgage early. This charge is basically the difference between the interest you promised to pay and what the lender can earn if you were to take that mortgage out today.
IRD or penalty charges are historically hidden behind cryptic language that the lender uses to disguise just how expensive it can be and thus can act as a deterrent for people to cancel their current mortgages. Continue reading
Recently BMO cut their 5 year rate to 2.99% – speculation was that it was due to Jim Flaherty’s recent departure. In these times, when interest rates seem to be the talk in real estate and in business in general, I thought it would be great to discuss what else you might be giving up for that supposed great rate! Continue reading
I recently got a new client. His credit is unfortunately damaged due to a current consumer proposal and she does not have a credit history in Canada as they moved 3 years ago from the US so she could go to school to become a nurse. She was not working so did not bother to get any type of credit as she did not think it was important. She paid for everything in cash so she could keep things affordable.
Some people are in the enviable position of paying for every purchase with cash. This is great – except for when it comes to establishing credit. The strength of your credit history determines if you qualify for a car loan, mortgage or even credit card and also at what interest rate you will pay. Continue reading
I have written in the past about tips on how to improve your credit rating but the other side of the coin talks about the things we do everyday – sometimes unknowingly, that can ruin our credit rating, otherwise known as our beacon scores!
Many people don’t pay attention to their credit ratings until it’s too late. If you want to purchase a home, own a credit card or even buy a vehicle just to name a few, you need to prove that you can service the debt and pay your bills on time. Continue reading
I recently attended a real estate investment meeting and was contacted afterwards by somebody who is interested in investing in his first investment property. Being a mortgage agent and a real estate investor, I was happy to advise him.
We started talking about what he was looking for, what his goals were and what type of property he was seeking.
We spoke at length about how to analyze a property; we also spoke about which investments work best for cash flow, whether it be buy and hold, rent-to-own or multi-unit properties – it all comes down to what you as the investor wants out of the investment, what you are able to handle in terms of management and what your exit strategy is.
Unfortunately he did not understand the basics of analysis and which cities make for good investing over others. He was just interested in spending his hard earned money on the first property he found on MLS. Continue reading