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ID-100144052Recently 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

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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!
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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

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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.

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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

ID-100207206When you get into real estate investing or any venture for that matter you never look at the cons or negatives, you always look for the positives and reach sky high.

But what happens when your plans take a turn for the worse or your tenants cause you problems and all of a sudden you are hard pressed to look at the positives?

I recently wrote about my tenant issues in my blog found here http://renthouse2own.ca/blog/index.php/2014/01/16/why-was-going-to-court-an-opportunity-and-not-a-problem/ Continue reading

Everyday we hear about our national debts, personal debts and just debt in general and I thought it would be a great idea if we could delve into debt a little more and understand how it affects us in our everyday lives.

GDS and TDS are your debt ratios. Why are they important? Lenders look at these two ratios amongst other variables, when making their decisions on whether to approve a loan or not.

Many borrowers think that their credit bureau scores are the most important factor when being considered for a loan – this is only an indicator and cannot tell your whole story!ID-100213554-1

GDS stands for Gross Debt Service ratio and it is the percentage of the borrower’s income that is needed to pay all required monthly housing costs (mortgage payment, property taxes, heat and 50% of condo fees). The acceptable ratio is 32%.

TDS stands for Total Debt Service ratio and it is the percentage of the borrower’s income that is needed to cover housing costs (GDS) plus any other monthly obligations that a borrower has, such as credit card payments and car loan payments. The acceptable ratio is 40%. Continue reading