mortgage Loans

Overcoming The Challenges Of Getting A Mortgage When You Are Self-Employed

There will always come a time in your life when you may need to acquire a mortgage for the property of your dreams. Applying for one has some qualification procedures that you must follow. It will be easy to secure documents that you need in order to qualify for that much-needed mortgage if you are employed by a company who can help certify your capacity to pay the mortgage amount. The question is what will happen if you are self-employed?

Self-employed Canadians and the mortgage scenario

mortgage refinance

It has to be noted that almost 23% of income earners in Canada are self-employed or have at least made a living from part-time jobs. These statistics is an indication that more and more Canadians are attracted to being hired on a contractual basis or becoming self-employed to survive everyday living. The sad thing about this is it will be not as easy as it is for them to get approved for a mortgage loan from private lenders as it will be if they are employed by private companies or other companies for that matter.

The benefits and drawbacks of being self-employed

Being self-employed allows you to say you can work and survive on your own. Add to that, you can also pay slightly lower taxes because you can include your personal expenses among your deductibles before arriving at your taxable income figures. Take note though that there is a drawback that comes with the choice of being self-employed, one of which is it will not be easy for you to prove your income. Since you have a smaller income reflected on your tax return, it follows that you will have a hard time qualifying for mortgage and even if you do, you will only be granted a minimum mortgage amount.

Overcoming these challenges

It is good to note that mortgages are now available for you even when you are self-employed and just like you, there are other self-employed individuals who want to avail of such a privilege. Mortgage agents and brokers have made it possible for you to enjoy your hard-earned money and own the property you have dreamed of.

These agents work with you and give you access to lenders to get the amount of mortgage you need. They negotiate on your behalf in order to make the terms more flexible and agreeable for you. You can use these mortgages to buy a new home or other properties that you have in mind. All you have to do is basically show proof of income using documents such as income tax returns or a six-month bank statement. Business licenses, contracts, invoices, and articles of incorporation may also be required if you own a business.

New mortgage rules

One of the things you should bear in mind when looking for mortgage lenders in Montreal is to make sure that you are updated with the existing mortgage rules especially that new rules have been made effective on January 2018. You have to take note of what is in store for you with these new rules. Never hesitate to ask questions or make a research before signing the mortgage contract.

Are You Unsuccessful In Your Mortgage Renewal?

When your mortgage hits its maturity date, you will have to renew the outstanding balance for yet another term. You can do this repeatedly before fully paying off the mortgage. Before your term expires, your lender sends you a renewal offer via email. The new offer contains information on the new term and mortgage rates, with a slip on which you can sign and send back. However, as convenient as it may seem, your approval odds are never 100%. A great way to evade the inconveniences is switching best mortgage companies in Montreal. But, if your slip is denied, there is no need to worry. Let’s explore the possible options you may have if your slip is denied.

Reasons For Denial

While switching lenders is convenient, why not exhaust all available options before leaping out? A good reason to move on with your lender is that you won’t have to re-qualify. If you pay off all your mortgage payments during your term, your lender will not deny you the mortgage renewal application. They will still review your current financial situation to figure out whether you are creditworthy. They may even evaluate your current employment and income rates to weigh the scales. If your finances are questionable, the lender may choose to deny your renewal. It is good to negotiate to see if you can increase your chances of fast approval.

Contacting A New Lender

If your lender denies you the mortgage renewal, or you are in search for better terms out there, you may consider going to another lender. To find a new lender, contact a mortgage broker or agent. However, the downside is that you have to submit a new mortgage application for renewal.

Since the new lender does not know anything about your financial status apart from your outstanding mortgage balance, they will have to verify your income to ensure you meet the standard credit requirements for approval. This makes it even more difficult. Therefore, do not cut links with your current lender just yet.

Possible Solutions After Being Denied

Both your current and new lender may deny you renewals. If so, do not give up. You can try convincing them into accepting your terms. If you fail, just consider other options. For instance, if your “A” lender is a bank or credit union, branch out to “B” lenders. Typically, they may be bad institutional lenders and trust companies for cash-strapped individuals. However, lenders go with logic. Therefore, if your credit score is way below the reasonable standard, you will still miss out. But, don’t bow out. Private lenders can suit you best at this level so you don’t sell out your home. You will have to convince that private lender because they need an assurance too before approving your request.

Getting to the point where you will be forced to sell your home is never your only last option. It can only happen when your finances dwindle below the required standards. To evade this tragic situation, make sure you timely pay all your monthly payments and you will maintain your good credit score. If you religiously follow the rules, it will not be difficult to have your mortgage renewed for another term.

Essential Information To Know About Private Mortgages

Does everyone want to secure a favorable mortgage deal? But still, many people cannot just land a good deal. The stringent Government regulations on down payments, high-ratio buyers and investments make many Canadians miss out on mortgage rewards these days. To, land a favorable deal, you have to do your homework beforehand.

While it is often said that housing is the bedrock of Canadian economy, in all reality, it is fast-dwindling as things currently stand. As a result, things have got harder for the self-employed individuals residing in far-flung areas. To evade this backdrop, more Canadians have resolved to shift to private mortgage lenders for their home financing needs. They save a lot and avoid the time-consuming guidelines and procedures set out by the traditional systems. Indeed, they are the go-to option.

Private Lenders Operate Differently

To start off, a private mortgage is simply a home loan offered by a company or individuals, and not a bank or any other banks. Among the greatest upsides of working with private lenders is, since they are financed by investors or a group of investors, they do not bow to the stringent guidelines set forth by the major institutions. Private mortgages are therefore more friendly and faster, particularly when it comes to the application process. This means if your situation falls squarely out of the conventional lending guidelines, it is the best catch.

You Will Qualify For Private Mortgages, If You:

  • Are self-employed
  • Intend to purchase raw land or private property
  • Desire to make a real-estate investment
  • Have less credit
  • Are suffering hefty penalties and need to access equity but don’t want to refinance your bank mortgages.
  • Are looking to renovate already existing property
  • Seek a short-time loan.
  • Need to consolidate the high-interest rate debt.

How Private Mortgages Operate

If you are thinking private mortgages are daunting, fear not. The secret lies in understanding the easy-to-follow process to secure a subsidized loan. First, you need to reach out to your broker who after assessing the situation, will determine whether you are eligible for the loan or not. Then he or she will search for best mortgages solutions that fit your needs. The experts who offer debt consolidation mortgages in Montreal will then structure the deal, with an exit strategy so you know how long it will take.

It is important also to keep in mind that private lenders mostly consider applications from borrowers at convenient locations. It is because private mortgages are uninsured to allow the lender to easily regain the property in case of a default. It is therefore that before branching out to any broker around, be mindful of the distance involved and most importantly, the charges you will incur as the deal is saving you money. Before approaching a broker also, take some time to evaluate their reputation and reviews to avoid schemers.

Currently, the private mortgage industry is steadily growing in popularity. Since many borrowers fall afoul of the traditional guidelines, they leverage the private mortgages opportunity to upscale their business. Do not be too fast, so you avoid a bad deal. There are countless options available, thus you must remember to scour the alternatives and settle for what is favorable on your part.

What Are Assumable Mortgages?

Interest rates in Canada are predicted to rise over the next few years. With this prediction, many people are thinking about mortgage assumption, also known as assumable mortgages. This type of mortgage, basically, allows the buyer to assume or take over the seller’s existing mortgage. This is only possible, however, upon the approval of the lender. Learn more about the ins and outs of assumable mortgages through the following facts.

The assumable mortgage process

This mortgage is actually a financing agreement where a seller is allowed to transfer his mortgage to the buyer. The transfer includes everything related to the seller’s existing mortgage including interest rates, mortgage terms, and of course the remaining balance. This gives the buyer a chance to get rid of the rudiments of negotiating a new mortgage, which in these times can have a higher interest rate.

The process is not commonly utilised simply because lenders do not recommend them as it will place them into a losing situation. Years ago, there was no formal approval needed for assumable mortgages. The seller back then, agrees that he will be responsible in case the buyer fails to make payments. Some were not at all interested with this type of mortgage.

The pros of assumable mortgages

mortgage refinance

It is clear that in assumable mortgages, interest rates are lower. This will give potential buyers a list of benefits as they can save much on closing costs as well as appraisal fees. Brokers and lenders can likewise help when it comes to reviewing the mortgage thus giving the buyer a detailed calculation. This will allow the buyer to get a better deal after all costs and considerations have been factored in. On the part of the seller, an assumable mortgage can be his best way to sell his property in the fastest possible time. Eligible buyers become enticed with the purchase basically because of the lower interest rate.

The cons of assumable mortgages

Assumable mortgages are not all benefits. There are drawbacks when availing one. The buyer, for example, has to assume higher monthly payments since the amortisation period becomes shorter. Mortgage insurance premiums may also be added to the cost of the mortgage thus increasing the monthly payments even more.

Sellers, on the other hand, may have to face risks since they are passing on the mortgage to someone who has not gone through the entire process of applying for a mortgage. When buyers default on payment, sellers have to take charge. Even when there is mortgage insurance already in place, the seller will still be obliged to pay any remaining balance.

An assumable mortgage is not your only way out of an increasing interest rate in the market. There is not even a guarantee that the lenders will approve your request for this type of mortgage plus it is still possible you have to undergo the necessary parts of the application process before getting approved. If you are looking forward to purchase a home and want to make sure you are getting the best deal, you have to check mortgage rates in Montreal first. You should also get advice from experts.

How Is A Mortgage Interest Rate Different From Its Annual Percentage Rate (APR)?

If you want the best out of a mortgage, there are several things you will need to get right including picking the right mortgage lenders and making sure that your credit score is good before starting the application process. It’s also critical to understand some of the technical features of mortgages. Knowing how mortgages work puts you in a better position to negotiate for better terms, higher limits and more. It’s also an important tool for people who have current mortgages. By understanding the intricacies of a mortgage, it will be easier to monitor your mortgage and make beneficial changes such as refinancing the mortgage.

An important technical piece of knowledge is understanding the difference between a mortgage interest rate and its annual percentage rate. Interest rates are usually the starting point for negotiation or examination of mortgage terms, so it’s important to understand it thoroughly.

The interest rate


This is the percentage of the mortgage amount that you will be charged for borrowing. There could be other fees associated with a mortgage, but the mortgage interest rate can be thought of as the base fee. When comparing mortgage services from different lenders, it is common to compare the mortgage interest rate to find out which is the best for you. This is important, but should not be the only variable you use to figure out what would be best for you.

The annual percentage rate 

On the other hand, the annual percentage rate is a mortgage fee which takes into account the mortgage interest rate and other fees that may be levied by the lender. For instance, a particular lender may provide a mortgage product that has a comparably low interest rate, but which has many other additional fees. These could be percentages or set amounts of money, and could be paid once or repeatedly. Many people consider the Annual Percentage Rate as the true amount of money that the mortgage will cost you.

Calculation of the APR

The mortgage interest rate is easy to calculate, since you simply get the interest rate and find out how much this translates to when you consider the amount you are going to apply for. The APR, on the other hand, is a little more complex to calculate. To do so, the lender’s fees are included in the interest rate, usually by amortizing these fees over the mortgage’s life. In essence, it assumes that they are additional payments. After all the additional fees are added this way, the new interest rate is then calculated.

This gives a true picture of how much you will spend on the mortgage, rather than focusing on the interest rate alone. It can be used in many other decisions besides choosing which mortgage to take, including getting a second mortgage in Montreal or choosing between static and variable interest rates.

When making the decision to get a mortgage, always ensure that you understand the true amount you will pay for it using the APR. High quality lenders will always be upfront and give you information regarding the extra fees you will be charged including the interest, so that you can get a true picture of the mortgage cost

How Does Bad Credit Mortgage Work?

For many borrowers, they have a history of bad credit and this has made many lenders and banks reluctant in facilitating their mortgage easily. People have fallen into this situation as a result of prolonged illness, redundancy, divorce, car accident or perhaps a combination of all these situations mentioned earlier. With all these, is it possible to acquire a mortgage loan? According to today’s trends, the answer to this question is an emphatic yes!

A few years back, the application of a loan would involve a checkup on your income background and credit history. But this is different today. With fast pace of technology, any defaults is impossible to hide. Your application is rejected instantly if there is an imperfection in your income or credit history. This has limited the number of individuals applying for loan. There are different lenders who render bad credit mortgage in Montreal with various options available for their clients. While choosing one over another, make sure you know everything that has to do with bad credit mortgages. Most of the times, these types of mortgages are sugarcoated. You should keep your eyes on the following.

Higher interest rates


One of the characteristics of a bad credit mortgage is high interest rate. Borrowers are charged a higher interest rate as a form of compensation in the risk they are taking. The truth is that, there is a loan risk for borrowers with a bad credit record and many lending companies put this into consideration. A higher interest rate is imposed on the borrowers for them to take this loan. One of the reasons behind this is to protect the lender in event of a mishap and a foreclosure on a bad credit mortgaged property.

Discount points 

Bad credit mortgages come with discount points, which is common. The discount point is composed of a percent of the overall purchase price. Borrowers of bad credit mortgage are billed higher discounts points. This is usually between four to five points. Point may go higher for bad credit mortgages as far as ten. This rise isn’t against federal law and unpopular practice. In this case, it is determined by the lending company.

Larger down payments 

There is a larger down payment for a bad credit mortgage when compared with other types of loan. Borrowers are charged a large down payment in exchange to ignore their previous credit history. Normally it is 70 to 75 percent of the value of the loan. In this case, the lenders are protected as a result of equity in the property. Upfront price of this type of loan may not be affordable for borrowers. But if you feel that the down payment required is affordable, this might be beneficial for you. The down payment taken by you will cover a considerable part of the entire purchase price and this signifies that a lower monthly rate will be paid on the bad credit mortgage. Whatever the case may be, you should seek the help of an expert.

Is It Hard To Land The Best Mortgage Rates?

House hunting always comes with searching for mortgages. You are lucky if you can pay the house that you like upfront, meaning, with the money you have saved in the bank. What if what you have is only enough for the down payment and a portion of other related expenses? The next thing you should bear in mind then is to seek mortgage help. When you do, you have to know how to get the best mortgage rates.

Prepare your finances

Your finances will always affect the mortgage rate and even the mortgage deal you can avail of in its totality thus you have to prepare for one. When preparing your finances, you have to make sure you are ready with the basic 20% down payment required. Alongside this, you also have to take two steps – first is to prepare your credit report and second is to pay CMHC insurance in case you do not have enough cash to pay for the down payment. Paying attention to all these finance-related records and payments will make it even easier for you to have your mortgage processed whilst also making sure you are offered the mortgage rate that you have always wanted.

Ask help from a broker


If you do not love math (or sometimes even if you do), chances are you will have a hard time understanding which mortgage rate will work best for you. A broker is what you need in this regard. A broker can help you do away with the need to visit all the banks in town just to compare mortgage prices and rates. The good thing about working with mortgage brokers is you can always trust them when it comes to being able to talk to multiple lenders and from there, they can make all negotiations on your behalf so that you can get the best mortgage rate that will work within your budget.

Always choose a mortgage that will meet your needs and expectations

In the world of mortgage rates, you are given two choices. The first one is called the variable mortgage rate which commonly starts at a lower rate but depending on what has been set by the Bank of Canada, this rate can change or fluctuate through time. The other choice is called the fixed mortgage rate, one where you are expected to pay the amortisation based on a rate that is fixed throughout the term of the loan.

It will be quite difficult to calculate which between these two rates are better over that of the other. It will then be good to reconsider getting a mortgage that allows you to avail of prepayment options where you can either reduce the term of the loan or pay more than your amortisation.

Choosing from various mortgage rates can be quite tricky. Add to that, you have to bear in mind that not all lenders offering the lowest mortgage rates offer the best rates. With the help of a reputable mortgage broker who can do all the negotiations for you, this should be less of a problem on your part.

How To Work With The Right People For Mortgages

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

mortgage broker

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.

Mortgage Knowledge That Can Help You Stay In A Good Financial Position

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

mortgage rate

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

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.

How To Give Your Rental Property A Competitive Edge

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.