Aug 21, 2009...Is your Canadian mortgage credit in good shape?

If you plan to purchase a house or take out an Ontario equity loan, one of the first things you should do is check your credit.  And when should you check it?  Well, to be safe, you should check your Canadian credit about a year before you take out a secured loan.  This will give you time to see if you need to repair your credit.  There may be some items on the credit report that you were unaware of (ie collections, incorrect entries).  Or perhaps you paid some old bills, but the creditors did not report it to Equifax.  With 6-12 months to repair or improve your credit, you should be in good shape when applying for your Canadian home improvement loan.  Simply call Equifax to get your credit report.

 

Aug 11, 2009...Where do Canadian mortgage lenders lend

Most Canada equity loan lenders will go most places in Canada.  Some have policies that say they must be within a certain distance from a certain minimum populated city (ie the property must be within 25 kms of city with a minimum population of 25,000).  But the standard in Canada is that if CMHC (Canada Housing and Mortgage Corporation) will insure the mortgage for a lender, the lender will basically lend anywhere.  If the property is acreage, they will usually only look at the value of 5 acres plus house.  Getting a British Columbia mortgage on leased lands and native lands can also be difficult.

 

Aug 2, 2009...Does your house still have value

One of the things that I hear on a daily basis is clients believing that their house is worth more than it is.  Many of my clients are looking for a Canada home equity loan or a Canadian debt consolidation loan.  The clients are hoping that they have enough equity in their property so that they can qualify for a second mortgage.  But unfortunately, in many cases, the values that they remember from last year are no longer there.  Quite often the current property values are 10-25% less than than last year, thus making an equity loan impossible.

 

July 28, 2009...Canada housing market news

Good news from the Canadian housing market.  Sales of existing houses rose 31.5% in the 2nd quarter of 2009, compared to last year.  This shows that house buyers are getting back into the market, perhaps indicating that the recession is starting to abate.  It also shows that buyers are taking advantage of the low recession like prices and the fact that the Alberta mortgage rates are at an all time low.  Most of this growth is happening in the large Canadian cities such as Vancouver, Calgary, Edmonton, Toronto and Montreal.

 

July 21, 2009...British Columbia Line of Credit mortgage

The last mortgage we wish to review is the Canadian Line of Credit mortgage.  Sometimes this is referred to as an LOC.  It is secured against your property like a conventional mortgage, but instead of giving you the money upfront, and paying it back over a specific period of time, you are given a maximum amount that you can borrow and you can borrow all or some of it.  The payments are usually interest only, based on your monthly balance.  The benefits of this Ontario LOC is that the interest rates are usually low (based on the Prime rate, determined by the Bank of Canada), you can continue to borrow against it (as long as there is room) and there is no penalty for paying it all off.

 

July 16, 2009...open Ontario mortgage

In our continuing discussion of various types of mortgages, today we would like to speak about open mortgages.  An open mortgage means that you are able to pay as much as you would like towards the mortgage on a monthly basis.  There may be a minimum amount that you need to pay, usually quite minimal, but you have the ability to make large payments, or pay the entire mortgage off without penalty.  Normally, the rates will be slightly higher on a British Columbia open mortgage versus an Alberta closed mortgage because the lender takes the risk that you can pay it out at any time.  These types of mortgages are good for clients who are expecting a sudden windfall of money (ie an inheritance), fluctuating income, or expect the possibility that they may wish to sell the property in a short period of time.

 

July 12, 2009...variable rate Canada closed mortgage

The Canadian variable rate mortgage is similar to a fixed closed mortgage, with the major difference being that your interest rate fluctuates with the Canadian Prime Rate.  The Prime Rate is determined by the Government of Canada, and they meet a number of times during the year to decide whether it should be raised or lowered.  Variable rate mortgages usually have a lower interest rate than fixed mortgages, but the risk is that if the Government of Canada decides to increase the Prime Rate, your monthly payments will increase.  In general though, variable rate mortgages are usually less expensive than fixed rate mortgages.  You just have to be flexible enough to absorb the possible increased monthly payments if the rates increase.

 

July 10, 2009...a fixed Ontario mortgage is the most common

In the world of mortgages, there are many types to choose from in Canada.  The most common is the fixed Canadian mortgage.  The word "fixed" means that the interest rate remains the same over the term (or length) of the mortgage.  And quite often, you may have the privilege to prepay up to 20% of the principal amount, once a year.  The good thing about this type of mortgage is 1) you know exactly what your payments are going to be, and you can budget for it, and 2) you never have to worry that the payments will increase over the course of the term.  But if you wish to pay out the mortgage before the term is over, there will probably be an early payment penalty.

 

July 9, 2009...in the Alberta mortgage market, should you rent or buy

That seems to be the age old question...in the Canadian market, should I rent or buy my house.  If you speak with most successful people, they have made their money through real estate.  But what does that mean for you?  Well, if you can afford the downpayment, I think it is better to buy.  Even with high Canadian real estate prices, you'll see that houses generally appreciate over time.  Also, when you pay the monthly mortgage payment, you are paying down the principal as well.  With renting, you will never own the house, and, in my experience, clients are usually frustrated after years of making payments with nothing to show for it.

 

July 6, 2009...how much of a Canadian Equity Loan can you afford...

Two terms that you need to know when getting a Canada mortgage is term and amortization.  The term is how long the current rate agreement will be in place.  They range from 6 months to 10 years.  After the term is up, you will either need to pay off the mortgage, or renew for another term (with either your current lender or a new lender).  The amortization period is the length of time it will take you to reduce the mortgage balance to zero.  This is usually 25 years, but it can go as high as 35 or 40 years.  The shorter the amortization period, the higher the monthly payments will be, but the quicker you will pay off your mortgage.

 

June 30, 2009...which properties qualify for a Canada mortgage

Once you have qualified for a Canadian mortgage loan, you need to know which kind of properties that you can purchase easily.  Most Canadian lenders will approve standard houses, townhouses and apartments.  Some of the properties that may be difficult to purchase are properties that are on leased land, or mobile homes (where you don't own the land), houses that were grow-ops, condos that had a leak issue, farms or properties that are in remote areas.  It is not "impossible" to purchase these types of properties, but the rates and fees may be significantly higher because you may have to deal with "B" type lenders or private lenders.  More info coming your way soon. 

 

 

 

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