Ontario Mortgage – How To Find The Best Mortgage For You

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If you are looking for an Ontario mortgage, there are better options than going to your bank. Banks in Ontario, Canada are loaning money more freely than during the global economic meltdown, but will rarely offer you the best deal when you walk in off the street. Offices in those tall buildings in downtown Toronto owned by the major Canadian banks each have a vested interest to capture Canadian loan business within their product offerings. Loan officers work for the bank, and can only offer you limited mortgage products or solutions. On the other hand, a mortgage broker works for you and can help you find the best deal for your mortgage needs by shopping your loan across many different types of lenders in Ontario and elsewhere in Canada.

Getting the right financing is crucial when buying a home in Canada since it will probably be the single biggest purchase you make in your life. As an investment, it makes much more sense to buy a home than rent one in Ontario because unlike anywhere in the United States, there are no capital gains taxes on real estate in Ontario, Canada.

A Canadian mortgage broker has access to bank mortgages and can often get better deals for you than if you approach a bank on your own. In addition, mortgage brokers in Ontario have access to hundreds of other financing options, including loans from Canadian finance companies, trust companies, and private lenders. You can save time and money not having to shop around for your Ontario mortgage on your own and you only need to fill out one application. The mortgage agent or broker then has lenders compete for your business. The best part – you get expert advice that can save you thousands of dollars and it costs you nothing. Once you choose the lender, the mortgage agent is paid a commission, so it costs you nothing to tap into their expertise.

A seasoned, licensed Ontario mortgage professional knows how to negotiate the best deals and can explain all your options to you. As over 25% of all Canadians live in Southern Ontario, it is important to draw on the local expertise of an Ontario mortgage broker or agent as lenders in different parts of Canada and internationally all have different requirements. While getting a low-interest rate is important, it is not the only consideration. In Ontario, Canada the mortgage brokerage industry is regulated by the Financial Services Commission of Ontario or FSCO. You can see a legitimate Ontario mortgage brokerage license number posted on all advertising material and websites. A mortgage agent or broker can help you get the best package for your financial needs, taking into consideration fixed versus variable rates; payment options; terms, or penalties.

Recently the Bank of Canada signaled increasing rates which in turn triggered higher mortgage rates in Ontario. The housing market in Southern Ontario is doing exceptionally well in 2010 and prices are on the rise again. Recent concerns about inflation may have been overblown and the temptation for the Bank of Canada to raise interest rates is being balanced by the need to revive a growing yet still fragile Canadian economy. One strategy for Ontario home buyers given the current interest rate levels in Canada is to lock in lower rates for at least 90 days while shopping for their home to take advantage of the lowest possible Canadian mortgage rates.

If you are a first-time buyer, self-employed, or new to Canada, you will have a much harder time qualifying for a mortgage with a bank. Recent changes to Ontario law have placed tighter restrictions on mortgages, so it is best not to go it alone but gain the assistance of a local mortgage professional. If you are shopping for a home, it also pays to get pre-qualified for a mortgage to secure the rate and to know how much you can afford. From extended hours to house calls, you will also get better service from your Mortgage broker in Ontario.

Home Equity Loan Mortgage – Unlocking The Equity In Your Home To Pay Off High Debts

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Many people have incurred debt over the past two years with the downturn in the economy and rising unemployment. Despite record low-interest rates for mortgages, other forms of credit like credit cards, revolving credit and car loans are still at high rates. A home equity loan mortgage can make good financial sense if you have equity in your home. You can refinance or borrow against that equity to save thousands of dollars in interest since this type of secured loan can be financed at lower rates.

Many options are available to reduce your debt burden and increase your cash flow. If you are currently making many different payments to lenders: store cards, credit cards, loans, cash advances, etc. you can consolidate all of those debts into one monthly payment. This consolidated payment is usually much lower than the total minimum payments for all debts. If you are having trouble making ends meet, the lower payment may mean you can avoid going further into debt by using credit to get through the month. As your income or cash flow situation improves, you can make accelerated or additional payments toward your home equity loan to pay it down faster.

It may make sense to refinance your mortgage at today’s low-interest rates, increasing the amount of the mortgage to pay off your other high-interest debts. You will pay less interest and have a smaller monthly payment than servicing all debts, but you will have the mortgage for a longer period.

You can also choose to get a home equity loan or line of credit that is secured by the equity in your home. The rate of interest on a home equity loan is much lower than an unsecured loan. The advantage to this type of loan is you can usually pay it off sooner, and increase payments as your cash flow improves. The object is to pay the line of credit down, not to leave it run up at the maximum amount. People that do not pay down their lines of credit may be better off with an increased mortgage payment since it forces them to be more disciplined in paying down debt.

Using the money in your home can make good financial sense, as long as you avoid incurring additional debt in the future. You need to be disciplined and pay off your loans and not look at refinancing as a way to afford a more lavish lifestyle. It is also a good idea to keep some money or lines of credit open in reserve for emergencies.

An accredited mortgage broker can help you understand your options for a home equity loan mortgage, and help you find the best financing solutions for your needs.

5 Keys To Becoming A Rent-To-Own Property Investor In Canada

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New home keys and house plan

By now, everyone is quite familiar with the unique set of circumstances that lead to the collapse of financial markets across the world in 2008. This was a perfect storm and boy did it pack a punch, hitting hard and fast!

Many investors saw their retirement portfolios cut in half as global economies came to an abrupt halt. Since then nervous investors have wondered if they’ll be able to retire when they originally planned. They know their money must work even harder for them just to recover what they have lost, and yet they also want greater security because they can ill afford a repeat of recent history.

Some have turned to real estate investing. While investing in real estate can be profitable, it isn’t realistic for most busy professionals since being successful at it requires time and knowledge – both of which are in limited supply. Therefore most don’t give it any serious thought.

For those who decide to pull back the curtain in their search for secure investments, require little time or knowledge, and offer exceptional returns, they’ve discovered a virtual secret called rent-to-own (RTO) properties. This article covers the 5 keys to becoming a rent-to-own property investor in Canada.

Availability Of Cash Funds

Becoming an RTO investor begins with having cash available for the down payment necessary to qualify for a CMHC (Canadian Mortgage and Housing Corporation) insured mortgage. The keyword is available. This means that the investor already has liquid cash in their bank account that doesn’t need to be transferred from other accounts, or involve selling investments to access the money. An RTO investor should have 20% ready for a down payment (or $50K – $60K for a typical home purchase) even if less is required because CMHC rules can and do change.

Employment And Income Verification

Every RTO investor must also be able to prove their income. To be able to qualify for most RTO deals in Ontario an investor should have a minimum household income of $50K – 60K.
To be approved for a mortgage an investor needs a letter of employment, their two most recent pay stubs, all T4s for the past two years, and copies of their two most recent Notice of Assessments from the Canada Revenue Agency. If the investor is self-employed then they must provide copies of all T9s for the past two years instead of T4s.

Excellent Credit

This one should be obvious considering that most tenants who use an RTO to purchase a home do so because their credit sucks. The banks won’t look at you any differently because you’re an investor with money. The higher your credit score is the better. Different banks also have different lending rules so to ensure that you can qualify an investor should have a minimum credit score of 680.

Low Gross/Total Debt Service Ratios

These ratios are used to answer the question Are you in too much debt already? For RTO investors all that this means is that your debts should be within acceptable ranges before jumping on an opportunity. Your RTO specialist and their accredited mortgage professional will be able to assist you in answering this question.

Mortgage Pre-Approvals

With the previous four items checked off a rent-to-own investor should be able to obtain a mortgage preapproval for between $200K – 250K quite easily. A mortgage pre-approval is very important as it is a commitment from the bank confirming that based on the above information, they will lend you a specific amount of money towards a mortgage if obtained within a given period.

Becoming a rent-to-own investor involves the same things required of any home buyer. Having cash funds available and accessible, excellent credit, low debt ratios, being able to verify your employment and income, and obtaining a mortgage pre-approval are required by every RTO investor before they can start investing in rent-to-own properties.

RTO opportunities move quickly because the cash flow, passivity, security, and high ROI make it an ideal investment strategy. A rent-to-own investor must be able to close the deal. The Canadian RTO specialist makes it possible by ensuring these 5 keys are met and providing a team of RTO-friendly lenders, lawyers, and insurance brokers to complete the deal and secure your investment.