Obtaining a mortgage is one of the most expensive investments you will ever make in your entire life. It involves a lot of things including utmost commitment which is the main factor with which you can make the investment a success. In the process, you will have to deal with several people – some are there to give you sound advice as to how you can close a good deal whilst others are just eavesdropping into your current situation.
When you are investing in real estate, it is essential to hire the best partner to work with. You cannot just scout for anyone and then hire him or her at once because you are in a rush. This is not how the entire buying scheme works. You need a solid team to work with and you will not be able to have that if you are not careful enough when making a choice. In order to make sure you are getting the right people to work with you during mortgage time, you can follow the tips below:
Hire a mortgage broker with adequate knowledge
When hiring a Canadian mortgage broker, you should be able to find one who has connections in the Canadian mortgage market. A broker is there to help you analyse your needs according to what you can afford. He is the first person to run to in the process. He does all the research for you in the Canadian mortgage market for you and will also make sure you get the higher chances of approval later on. He can make necessary arrangements with your choice of lender too.
Look for an honest real estate agent
From a mortgage broker, you have to be able to look for a real estate agent. The real estate agent takes charge of scouting the actual homes that will fall into your budget. As he gives you all the choices you can get, he will also see to it that he finds you a property that will suit your requirements in terms of accessibility to your workplace, to your child’s school or to groceries or supermarkets. He will also try his very best to give you a property that has lower taxes or even one that is located in a place where property values appreciate through time.
Get the help of a professional home inspector
Inspection and appraisal is important in making property investments. In this case, you will need the help of professional home inspectors. He will look into the property you are eyeing to purchase and check for flaws or defects if there are any so you can make necessary arrangements with the seller or back out if the property does not suit you.
As you can see, there are different people you need to work with during mortgage time but it all starts with the help of a mortgage broker. Along this line, we encourage you to contact us for any queries regarding the ideal mortgage that you are looking for.
Mortgages are great; they help you get to your dream in a financially manageable way. Therefore, you may want to know what works to keep you financially fit in the long run when it comes to mortgages. No one likes going through a financial crisis but unfortunately happens. When taking a mortgage, understanding certain facts will go a long way to help you understand how everything basically works. The last thing you want is getting side-blinded by the terms and conditions of your mortgage. Here is an insightful into the world of mortgages.
Annual percentage rate
Even though it may be kind of challenging to understand how mortgage costs work at first, the complicated parts can be broken down into comprehensible bits. First of all, there is interest that is easy to understand. The next involves costs that arise from direct originating as well as the closing cost. With the annual percentage rate, you are in a better position to create an allowance for all these costs. This provides you with an ideal gauge for making comparisons when looking for the best lenders in town. More often than not, you will realize that a good number of lenders who offer low rates charge a higher percentage rate when you add in other fees.
Change in mortgage rates
As a soon-to-be homeowner, you are more likely to fall in the category of homeowners who make the assumption that interest rates are stable. When making mortgage decision, it is important to understand that mortgage rates change over time and may affect your monthly payments. The rates respond to the change of the market forces that cause a significant change in bonds and stocks among other financial investments. That means that a quote that you have may have secured earlier in the day may become obsolete several days when the rates change.
Quotes from lenders
Even there are standard policies that protect borrowers from any form of financial abuses; there are no policies that restrict all mortgage lenders to a fixed price. That means that you can get different quotes from different lenders. It is up to do your homework before making a crucial choice. Lenders charge different amount of fees in relation to services such as title insurance, credit check and appraisals. By comparing quotes from different lenders, you can ensure that you pay little for these services with the lower rates.
Mortgage refinancing is a helpful when you are in a financial crisis. Sometimes unfortunate things occur leaving in you a in a tight spot. This may mean being behind with mortgage payments. Therefore, you can consider mortgage refinancing when things get rough as it gives you a chance to get lower rates making payment manageable.
These useful facts go a long way to help you make the right choice when taking a mortgage. To successfully manage your mortgage payments, you need to plan ahead and learn a few things regarding financial discipline. You should also be aware of financial backups such as mortgage refinancing that help you in sticky situations.
For starters, the average price of a home in Canada is approximately $440,000. Montreal is one of Canada’s best big-city bargains when it comes to buying a home. Average sale prices, over the past few years, were forecasted to be more than $887K in Vancouver, less than $613K in Toronto, and over $338K in Montreal. Read on to find out more about the house prices in each city as well as the types of houses you can purchase with the value of an average Canadian home pricing.
Types of houses found in Montreal, Vancouver and Toronto
Montreal is built in a way that makes incorporating a wide variety of apartment styles possible. In addition, it has a housing market that consists of more than 50% renters. For starters, you can find studio or loft apartments in Montreal and they typically feature one large open space that comes with a mezzanine for sleeping. There are also two- and three-story apartment buildings that houses units that have their own entrances. Also known as duplexes and triplexes, these apartment units can feature winding stairs as well. In Montreal, full houses (which are available for rent) and multiple apartment buildings are uncommon.
From townhouses, condominiums to penthouses, Vancouver offers a decent range of housing options but at really expensive prices. If you are planning to invest in a property here for the long haul, price won’t matter. Even if the price of your home in Vancouver drops in the short term, you can still afford to hold on to it as it will eventually recover. What’s more, there is a shortage of land here. Toronto, on the other hand, is enjoying a booming condo market, and there more condo projects growing more complex, expensive and larger over the years.
What can the average price of a Canadian home get you in each city?
In Montreal, you can purchase a 930 square foot, two-bedroom duplex that comes with a single bathroom. Vancouver, on the other hand, has 925 square foot, two-bedroom condos that you can purchase at the same value. The average price for a single-family detached home here has also surpassed the $1.4 million mark. The near 20 per cent jump over the past year has widened the affordability gap between condos and houses. The value of a land in Vancouver is one of the biggest reasons why prices were driven higher for detached properties.
Based on the average Canadian home pricing, you can also purchase a 900 square foot, two-bedroom condo that comes with two attached bathrooms in Toronto. Recent studies have also shown that the average price of a house in the Greater Toronto Area has increased by more than 7%.
How to purchase a house in Montreal, Vancouver or Toronto?
If you are buying your first home in Montreal, Vancouver or Toronto, it is pertinent that you consult mortgage brokers for their knowledge and advice, and be mindful of your current financial situation. By having full control over your mortgage, you can also grow your home’s equity as its value increases. Once the technical aspects of buying a home are covered, you can choose the type of house you really like with peace of mind.
You have just taken a mortgage product to build some rental units near your home. Within no time, your rental property is complete and potential tenants have started checking it out. But how do you increase your rental yield? A few years ago, landlords and rental property managers had an easier time letting their properties. Their clients did not expect too much from them and were more accepting of the rental properties offered to them.
Regrettably, all this has changed in recent years and renters want and expect a lot more for their money. And because more people have jumped into the property investment market, tenants have a wider range of options to choose from.
Improving a rental property to attract more clients
Since the majority of rental property owners don’t want to lose their clients, they are now renovating their commercial buildings to meet the needs of their clients. Competition has made these investors to work extra harder to make their properties more desirable and hence to increase their rental yields. For all this to work, they are spending more money to bring their rental properties up to the expected standards. After all, their clients want to portray a specific lifestyle and living in quality rental homes make them feel like they are living that wished for lifestyle.
Giving your rental property a competitive edge is easier than you ever imagined. But before we get started on how, it is important that you find yourself a reliable property manager. This person will be charged with the duty of looking after your property. Some qualities to look out for when hiring this kind of a person include reliability, trustworthiness, organization and hardworking. Reliable property managers are great when it comes to maximizing the returns from your investments. Without much ado, here are some three tips for giving your property that competitive edge you desire
Have it renovated
Having your rental property expertly renovated offers great rewards in the long run. Yes, it might be a costly undertaking, but the rewards are really worth the trouble. For one, it can help you get more income from higher rents in addition to helping secure great tenants who will love your property like it is their own. By simply replacing shower heads, taps, and other fixtures in a bathroom, you have given a fresh and improved look. Repainting the kitchen flooring, walls, cupboards and changing the handles with new ones makes a huge difference when it comes to attracting the right kind of tenants.
Keep your rental property clean
A rental property whether an aging or new one should always be presented in its best light. One of the best ways to do this is having it professionally cleaned at last once per week. Arriving to view a fresh smelling property is an undeniable benefit in winning over potential tenants. Even if your property has the markings of a great home, if the floors and walls are stained or dirty, they it could be sitting vacant for longer than you had anticipated.
Carpets and flooring
It is always a good idea to replace old carpets or flooring when it comes to rental properties. Laminate and timber flooring are a favorite with many renters. Moreover, these types of flooring make rooms to appear fresher and larger. But if you want to make the rooms more homely and warmer, then opt for quality carpets. If your budget does not allow you to replace your carpeting or even flooring, then make sure to hire professional cleaners to have them expertly cleaned.
After months of keenly searching for a dream property to purchase, you are lucky enough to have just found it. Unfortunately, there is one issue you hadn’t given much thought – your monthly income is not high enough to effectively cater for the purchase. Simply put, you cannot qualify for your required mortgage loan. Or can you? Yes you probably can. While you combined income might not be high enough to help you qualify for a home loan, why don’t you consider the other streams of income that flow into your home?
From social security payments and dividend income from investments, to monthly alimony payments and disability payments, there are many different sources of income that could be flowing into your home than you ever imagined. However, there are two things you need to first realize before using your other sources of income for mortgage loans qualification purposes, including:
First, you need to document every kind of income you hope to use so as to qualify for a mortgage loan. How so, you might ask. Well, the days of simply stating your income and not having to prove it are long gone. These days, lenders require seeing proof of income a borrower is planning to utilize so as to qualify for a mortgage product.
• Total monthly debts
Regardless of what income streams you utilize, lenders today requires that your combined monthly debts, including your estimated new mortgage payments, to be no more than 43% of your gross monthly income. If you are able to meet this threshold, then you can easily qualify for a mortgage loan regardless of whether you are relying on your normal employment income, disability awards, alimony payments, a mixture of rental income, and so forth.
With this in mind, let’s look at some common non-conventional income sources that might actually help you to qualify for a mortgage.
Part-time job income
To use this form of income, you must first prove that you have been receiving payments on a regular basis and that you will continue receiving it long after you have been approved for your mortgage. Most of the lenders will need proof that you have been receiving this part-time income for at least two years. In other words, you will require claiming this part-time income on your taxes to proof its authenticity.
If you have been renting out an apartment, then simply use the monthly rent as a form of income when applying for a mortgage. However, you must be able to show proof of this income, meaning that it must be listed on your yearly income tax returns. This way, the lender can be able to scrutinize your returns and determine whether or not your rental income has been stable for the last two years or so. If not, they your lender might not accept your rental income as qualifying income.
Pensions and social security
While you might not think of applying for a mortgage loan after your retirement, some people still do. When they do, they make use of their pension and social security payments as part of their regular monthly income. As long as your pension and social security payments as well as other monthly incomes give you adequate money each month to fall under the 43% threshold, then you have a good chance to qualify for a mortgage loan.
There is definitely a multitude of factors affecting mortgage rates, which include some aspects like property type, loan program and property occupancy. While this is a clear fact to many people, there are other factors that have the most influence when you want to secure new mortgage rates irrespective of the economic conditions. By looking at these factors, you will be able to know how you can win the lowest mortgage rates for your home and be able to save something in the long run.
The risk of the loan bears a direct relationship with its cost. Lenders generally carry all the risk since they are they are the ones who create the loans. That means they make charges depending on the market conditions. Consumer profile is one of the essential factors that mortgage lenders consider before giving out loans. The consumer profile covers such things as loan type, debt ratio, occupancy, credit score and property type. Lenders take their time to look into a consumer profile to ensure they are making the right choice when giving out the loan. Therefore, your profile needs to be on point if you want to get the lowest mortgage rate.
Mortgage lenders also consider the property profile before giving out loans. An assessment has to be carried out to determine if the property is a single-family residence, a townhome or a condominium. All these factors affect pricing. Properties such as multi-family homes and condominium have a different pricing adjustment, which makes the loan more costly. Therefore, the property type can easily help you do the math regarding the kind of mortgage rates you are likely to get from lenders. Seemingly, single-family homes get lower rates as compared to condominium and multi-family homes.
Economic conditions change on a daily basis. That is why lenders also consider the economic situation alongside property and consumer profile. Unemployment report is usually among the top factors that drives mortgage rates. The mortgage rates may be higher or lower depending on the unemployment report. If the report is better, the rates may hold or rise significantly. However, if the reportis not good, lower rates are likely to apply. Since mortgage rates vary depending on the economic situation, you need to pay attention to economic conditions before making any choice.
Rates also apply according to the loan type. In that case, if a customer does not have the ability to increase down payment as well as the loan-to-value, he can always consider the idea of improving his credit score. Financial reports indicate that borrowers mostly benefit from non-governmental loans when they put in efforts to improve their credit scores. This is because most conventional loan programs make pricing based on loan-to-value and credit scores.
You can get low mortgage rates by considering these factors before applying for a mortgage. The idea of getting low mortgage rates is about making it possible to save some money throughout the mortgage term so you can achieve the dream of owning a nice home.
If you are currently contemplating taking out a private mortgage for yourself or someone dear to you, there are five things that can help you make it good for you. These fundamental rules will enable you and your creditor not to crosshairs during its period and always ensure that you are well aware of what requirements are needed.
Getting the contract in writing
No matter how trustworthy your creditor may be, you should formalize the arrangement even if it’s just one of those intra-family affairs. Whether you choose to do this in the form of a promissory note or other means, you should ensure that you register it together with the title deed with the relevant authorities.
It is critical that you secure the loan with the mortgage deed. By doing this, your lender will take ownership of your property in case some unforeseen tragedy befalls on you: loan default or death. Failure to do this can make the property revert to your other creditors. If this happens, you can risk jeopardizing your family if your creditor decides to legal action.
Setting an interest rate
While you might think that since it is private and should be interest-free, it is best if you are charged an interest. This is because as the borrower, you can be eligible for tax benefits while your lender can be able to beat the rising inflation.
You should also ensure that you and your lender discuss all the pertinent matters conclusively before you receive the loan. This will help avoid conflicts and complications that may arise. You should discuss matters such as:
• What action should be taken when you miss a payment due to personal financial issue?
• What will you do to restructure the loan so as to prevent you from defaulting?
If you are not sure how to go about this, then you can always call on the services of a tax preparer or attorney whom you know. They can help iron out all necessary matters.
Keeping it civil
Relationships at times when doing business can result in conflicts which, if unchecked, can lead to huge problems. Thus, you should ensure that you seek the services of a mediator if necessary when things become sticky in your relationship with your lender. At times, seeking a financial gift arrangement as opposed to a family mortgage can help you avoid some of these complications. It can be unsightly to start arguing of unpaid dues at the family morning breakfast.
Often times, you may have a hard time getting your credit score reviewed with credit bureaus if you opt for a private mortgage. Thus, you should ensure that you send your private mortgage agreement and receipt of the regular payments you have been making to every bureau and request them to them to include this information on your credit history. If they agree, you should be prepared to pay a certain fee which is dependent on their discretion.
Seeking a private mortgage can often be a great way to finance your car or home purchase without having a broker’s pocket some of the funds. Because of this, you should ensure that you assess your interests since it normally affects the ongoing relationship you have with your lender.
When it comes to mortgage applications most people worry about low credit score. Surprisingly, this is not the only most common reason for mortgage applications to be declined. Here are common reasons why mortgage applications are declined:
When applying for a mortgage, lenders tend to ask for paycheck stubs, tax returns and bank statements. This helps the lender to see if your income is what you say it is and if it is consistent over the years. If you do not have documents that can prove your income then it gets really difficult for lenders to approve your loan since they are not sure of your financial status. Documented income allows the lender to have confidence in giving you the loan since they are sure you have a consistent income.
Too much debt
Lenders consider your other debts and they do not want your debts to consume so much of your monthly income. That is why there is a debt-to-income ratio of forty three percent for anyone who is interested in qualifying for a mortgage. Forty three percent debt-to-income ratio means that all your monthly debts, which should include the monthly mortgage payment that is being estimated, should not be more than forty three percent of your monthly gross income. If that percentage increases, then the loan will be rejected. This is because when you have too much debt, then probably is, it might later on become an issue to pay for your mortgage.
Shaky employment background
If you have an inconsistent employment background there is a high probability that lenders will decline your mortgage application. You need to have had a job for at least two years before you apply for a mortgage loan. Lenders prefer dealing with someone who has a consistent monthly income and not someone who moves from one employer to the next. This consistency assures them that your monthly mortgage responsibilities will always be met and by what amount.
A small down payment
You may meet all the required requirements for your mortgage loan to be approved, but the minute you give a small down payment, then you risk the chances of your mortgage being accepted. If you also happen to have a weak credit score or a high debt-to-income ratio then paying a large down payment can increase your chances of qualifying for a loan. A small down payment cannot work either way, ensure your down payment is attractive enough.
Lenders really focus on an applicant’s credit score before they approve a mortgage loan. Lenders always consider a FICO credit score of seven hundred and forty or more for one to be qualified for a mortgage loan. The lower your credit scores the higher the chances that your mortgage application will be declined. The credit score is one hindrance that affects most loan applicants. Ensure your credit scores are according to what the mortgage lenders demand to avoid the risk of your application being rejected.
If you are planning to apply for a mortgage, ensure that you have all the required paperwork and you meet all the required qualifications. Also ensure that you avoid the red flags outlined above and you will not experience your mortgage loan application being declined.
Your financial statement is probably the greatest source of information for your lender in the event that you are looking to get a mortgage approved. Well, it is the main source of information regarding your financial position. This explains why the lender is very interested in the information presented within your financial statement. Most people assume that the lender only wants to know how much money you have and how regularly you deposit money into your account. The truth is that the lender is interested in the fine details like where the money is from and whether the source is legitimate. This means that you must be able to justify all the monies in your account.
The common mistake
After establishing that you need a certain amount of money in your account in order to apply for a mortgage, you may be tempted to borrow money or acquire it from other sources like family, friends or another job that is not a part of your main source of income. This is not entirely a bad thing. It is however considered a mistake because the lender will need you to verify the source of the income depending on how much it is. There often is a cause for concern when the money in question is more than 25% of your regular income.
You need to not only explain where the money is from but also provide supporting documentation that will assure the lenders of the source of that money. The main idea here is to be able to explain your financial situation to the finest of details, in order to avoid surprises. The lender would not want you borrowing money to impress them, since they need to fully understand your financial situation before they can pay for your house.
If you happen to have some deposits in your account that cannot be explained or documented effectively, your whole application will be credibly delayed. Here, you would like to remember that delays do not favor you in any way seeing as you will be incurring extra costs while also letting lucrative house deals pass you by. You need to ensure that you have all the documentation to explain the money that has been gifted to you, money that you have earned from a side hustle and any other deposit made to your account that can be seen as irregular based on your existing banking patterns.
Sometimes you may have everything in order with your mortgage application except for a few deposits in your account. Even with an impressive credit rating and a stellar pre-qualification, you will not be approved for the mortgage unless you clear up the suspicious deposits. Be sure to have a transparent financial statement with the required explanation and documentation in case you have deposits that can be considered as out of your regular banking pattern. This is the only way to avoid the unnecessary costs that come with the delays in processing a mortgage when your account has irregular deposits. Feel free to speak to us if you have any questions regarding mortgages.
The individuals, who want to make a mark in their lives, always face situations which put them in a quandary. One such is the issue of finance which is very hard to fetch when you need it badly. When you are faced with a situation that you have not enough finances to fulfill your dreams in the world of materials, then you are forced to find it elsewhere and also through the exchange of items that are very dear to your heart. These issues of urgency are put to rest if you find the right source of finance which will ease your way into productive business and other ventures to improve the economic status of the person.
This will help!
When it comes to finances and finding the right kind of financial service provider, it would help and go a long way if you learnt a few mortgage tips from those who are familiar with the field. There are many brokers who work towards getting finances for their clients and they are able to approach them for you for a fee of course. But it is also essential that the person who is in need of the finance creates awareness to himself about the various products available and especially in mortgage.
The individual seeking finances is in a very vulnerable position because of the general economic condition and also the changes that taking place at a very fast rate. The rates that were very low during the last year might take a different turn and we have to be risk free or take minimum risk whatever the situation may be. Many are looking towards buying houses which is why the mortgage aspect takes importance. The varying rates have to be taken into consideration before making a move and avoiding any sort of quick moves should be avoided or take the help of a broker or consultant as the case may be.
The fine lines:
When it comes to buying a house, the person has to have at least twenty percent of the actual value of the property as down payment which many may not have. Look for the mortgage provider that accepts less down payment or low insurance rate on the mortgage. Getting advice from an expert broker with leads and links would help get the best one suitable for your kind of financial needs. Taking the approval of a lender who would back you up in the process as it will guarantee the security sought by the mortgage provider.
It is always prudent to keep the bank credit healthy at any point in time as this will ensure coming clean from a bad financial situation until the house is bought. Keeping all the documents in proper order and as far as the credit cards go, it is better to not open any new or close the existing credit cards that you possess.
The documents and other papers that are related to all the financial instruments that you are using currently and this will help by having all the insurance papers, investments, tax returns and other important papers related property matters are all essential in this case. When it comes to spending large amounts of money, this should be avoided as you may need the finance from every area that you have in making the house purchase easy.
When you are faced with a situation, always try to find the answers from experts in the field and keep updating the mortgage tips for your own good.