So you’ve got you’re mortgage approval, now the lender gives you the choice of several repayment options. You’ve heard about the standard monthly payments but what’s semi-monthly or accelerated bi-weekly? Which one can save you the most amount in interest and which one can pay your mortgage off sooner?
Since last October I have been working with a couple who would eventually come to be First Time Home Buyers. When we initially met, she was and is currently a full-time student and he is a full time worker for the city they live in. He was also in a consumer proposal.
Unfortunately, a life circumstance had affected their finances and they ended up seeking a consumer proposal. His beacon was in the high 500’s and she did not have a beacon score, being a full-time student. When we first sat down, it did not look good. The only thing going for them, was a sizeable gift from a family member.
They had two small children and were living in a rental and the landlord was selling so they had to go. Instead of moving into yet another rental, we began to put a plan together to get them out of their rental situation and into their first home. Thankfully the landlord was giving them 6 months to find a solution so we got to work! Continue reading
As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.
At 10:00 am EST, Wednesday July 16th, 2014 the Bank of Canada again did what we expected them to do … they continue to maintain their overnight rate and in fact are not likely to make any change until possible 2016 now! What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is fabulous news but are you still making the most of the low payments you have! If you have any high interest credit card debt that you can’t pay off in full each month, it might be a good time for us to chat about a possible debt consolidation into your mortgage to save you some unnecessary interest… get a clear financial outlook void of expensive debt and start your summer off right and debt free! Continue reading
In today’s housing market, with average prices inching toward $600,000 in some cities, saving for a down payment can be a real challenge. If you’re a first-time homebuyer just starting out and trying to get a foothold in real estate, even saving the minimum 5% may seem out of reach.
Traditionally, none of the allowable sources for down payment were easy to achieve. If you couldn’t save the required amount, you could make a withdrawal from your RRSP (if you had enough and didn’t mind impacting your retirement goals), get your parents to give you the amount with no expectation of repayment (lucky you to have parents like that!), or use your own sweat equity to cover up to half of the down payment (if you were capable of doing renovations and repairs yourself). Continue reading
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