The Primary Role of Toronto Mortgage Brokers When Purchasing Your Home

It will always work to your advantage if you will have a Toronto mortgage broker by your side if you have plans of buying yourself a house or refinancing your mortgage. It is because these professionals have relevant access to the big banks and many other similar financial institutions. Aside from that, they have connections to local brokers, too. The rule of thumb in finding the right and suitable mortgage program for your specific needs is to find first the right and experienced mortgage professional.

However, some people are confusing a mortgage broker to that of a bank loan officer since they both seem to have similar functions. But there is a distinction between the two that must be understood by many before anyone would decide to engage with anyone of them. The underlying difference between the two is that the bank officer does his work to benefit the bank whereas the mortgage broker does not and is actually working for no one but for the sake of his client. The mortgage broker is unique from a bank loan officer in the sense that they are maintaining a good working relationship with a number of financial institutions yet they remain not committed to anyone of them. His main function is to link together the buyer and money lender. He may also work within the umbrella of a mortgage company and he can also work independently on his own.

If you are a homebuyer, trying to find a house to buy within or anywhere around Toronto, you have better chances of finding exactly what you are looking with the help of a seasoned mortgage broker. If anyone has a poor credit rating, he must understand that he can increase his chances of availing a mortgage with the help of a mortgage broker.

Normally, banks would have a number of prequalifying conditions that a borrower will need to satisfy first before they even consider your loan application.  The professional mortgage brokers in Toronto will work with their client-borrower in an attempt to find a suitable mortgage for their property buying needs. You will know that you have finally come across a good Toronto mortgage broker if this professional will show you keen interest on what your specific needs are and assist you in securing the proper loan program to have from a reputable money lending company. Depending on the level of your financial literacy, these mortgage brokers from Toronto or anywhere for that matter may even provide you with basic credit counseling service with the goal of helping you correct your credit issues.

Most of the time, brokers will help you out and find for you a specific mortgage program that is suitable for your needs. Don’t be so surprised if they charge you only a small amount of money for their rendered services and assistance, it is because the banks they have referred you to will compensate them or pay their corresponding fees, instead. However, if you happen to have a bad credit rating,  you will need to pay your mortgage broker fees out of your own pocket since they will commit to help and find for you a private mortgage financing company who will accommodate the financing needs that you may have.

Toronto mortgage brokers will indeed provide the significant help that you need if you are keen on purchasing a home since these professionals possess a profound understanding of how the industry works, including the rates.

What is Good About the Private Mortgages in Toronto

Money secured from private mortgages in Toronto are considered as hard money and they usually come from private lending firms whose main purpose is to offer loan options to people or homebuyers so that they would be able to purchase and acquire a specific real estate property. Most home buyers or property investors in Toronto are able to chance upon these personal or private lenders from a real property investment organization in their area. Often, these loans are made secure by the home investors. But the sad truth here is, not all homeowners would be given a chance to avail the fund that they badly need from a private lender.  If you are considering to get a private or personal loan, make sure that you have a good understanding of their advantages and disadvantages.

Private mortgages can easily become an excellent option for homebuyers who are challenged in qualifying and obtaining a traditional mortgage loan from their banks or any other established financial institution due to debt, poor credit rating, or self-employed individuals who are not always able to show a black and white proof that they are able to produce for themselves a regular monthly income. A debtor must keep in mind that even an individual who has the lowest credit score would still have a high chance of getting the hard money loan provided that the project with which he is involved in is indeed raking in good profits.

Unlike traditional loans, you will not be required to pay a personal loan over a 30 year period but instead, your loan provider would be expecting you to complete your repayment for the loan amount within 1 year or so, depending upon what has been agreed upon by both parties. It is not unusual for private lenders to expect you to complete your repaying your loan over the shortest period of time, anyways you should keep in mind that they are running a business. It would be to their advantage if you will be able to complete your loan repayments at the soonest possible time. Since their end goal is always to have a quick return on their money, you should not be expecting them to lend you a loan that will have a term of several years.

If you happen to have a house that is in need of some modifications and repairs already, I would discourage you from having high hopes that you will be able to secure a conventional mortgage from a banking or any other financial institution for this purpose alone. Regardless if you happen to have a stellar credit rating, you will have a very slim chance of securing a mortgage for such type of a project for your house. However, in this types of scenarios, private money can take on a significant role also.  In order to flip a house of this kind, you may seek out a non-traditional lender to come into the picture and finance the remodeling project

But when it comes to drawbacks, I can say that one of the major downsides are the interest rates. Compared to a conventional loan, I will say that the interest rates in a private or personal mortgage are normally a bit higher. One reason why the interest rates are a notch higher in personal loans as opposed to traditional mortgages is because of the convenience you get and the snappy processing as well. Personal loan providers in Toronto or in any other cities in Canada don’t have a need for any documentation also since their security for this kind of transaction is on the property in question itself.

If you have a house that you think will be needing some good amount of repair or remodeling job, then you may want to consider private mortgages in Toronto if you require financing help and assistance on this kind of project.

Commercial Mortgage Rates Toronto

Private individuals and small scale companies often ask us lenders how we are able to determine the commercial mortgage rates Toronto that we give to them when they are seeking for a refinancing support. Lenders use a number of criterions when assessing whether to approve a loan application or to decline it. These criterions could be varied as depending on what the lender would deem necessary.  Aside from those, one of the most important things that we, lenders,  need to take into account is the amount of risk that a particular loan application is normally entailed with. It is important for us to review a loan application and the possible risks involved since this will help us gauge whether the perceived risks are greater than the possible gains or not. The lower the perceived risks are the better. It is because this will call for a lower rate. When perceived risks are higher, this will drive the commercial mortgage rates higher instead.

 

Qualifications for Borrowers

As lenders, we need to determine if a borrower is creditworthy or not. If he comes to us with a guarantor, he will also be taken into account and will not be taken for granted.  We can determine a borrower’s overall creditworthiness by measuring out his net worth, credit history, and real estate experience. What exactly we are looking for are borrowers who have a good history in owning, utilizing, managing similar properties. It is also important to us that the borrower does have some good amount of cash reserves which will help cover for any inevitable or expected expenses or emergencies. And lastly, this often comes as a surprise to many borrowers and many of them are caught off guard here. The majority of loan borrowers are not really aware that paying their utility bills on time will also have a great impact on them when they are seeking for approval of their commercial mortgage application.

Location of Property and Market Status

Top caliber real estate properties that are situated in suburban and metropolitan areas usually come with more value in terms of costs, and they also present a lower risk to us, as lenders. On the other hand, inferior real estate properties that are located in what can be considered as rural areas present us, lenders,  instead of with lower risks and therefore calls only for lower mortgage rates.  When a good property is exactly in a good location, it will be a lot easier to have it offered again on the market for lease if your tenants opted to move out or on instances that a tenant’s remaining lease term is short. Like for instance, if you have a house for rent that is in a poor location and your current tenant decided to move out, you will need to have a significant amount of remodeling job done on it first before you can offer it up again in the market. Renovating your house for rent property will just help increase its market value again and thus will also increase your chances of attracting interested tenants anytime soon.

Stabilized Occupancy

We, lenders are also interested to see properties with good potential for high occupancy levels,  and if you happen to have one that has not had any disruption for the last 2 - 3 years, then it can easily get approved for financing assistance or mortgage. What we qualify as a high-risk property type are those that have fluctuating rental histories and those that always have vacancies for long periods of time.  We may actually necessitate loan applicants to furnish us a copy of their most recent operating statements, as much as possible within the last 2-3 years. What we are anxious to see from here is a steady occupancy trend and, if possible, and a net income that is on the increase. If a property is observed to have a fluctuating income and high in expenses, it may not be a good property for us to provide financing because it will certainly just produce doubts and questions about its integrity as a profitable real estate property.

Tenant Mix

It is desirable for us lenders to finance retail and office properties where the tenants can be described as good quality and their lease terms are for long term. What we, lenders, are trying to veer away from, as much as possible, are the real estate properties that have high turnover rates, vacancy, and even those properties that are in constant state of flux. What we like to see first so we can provide financial assistance are those property owners who know exactly how to maintain their properties well. This is very important in such a way that it can easily attract tenants that are most interested in long term lease on it.

Condition of the Property

We also consider providing financing assistance to properties that have a deferred maintenance yet is still in a very good condition as opposed to those that require major renovations or repair.  Properties that are in dire need of capital improvements will also need a significant amount of money, too, to help fund it.  If we find that the property in question is indeed in a poor condition and not properly maintained, as lenders, we need to set aside escrow funds to be used for its repairs and maintenance.  A property that is in poor condition will automatically not have a good performance, much worse than what can be expected of well-maintained properties.

Debt Coverage

When we say debt coverage, what we are exactly pertaining to is the excess amount of the net operating income overpayments received for the annual mortgage. There is a perceivable lower risk involved when a property is observed to produce more of an excess cash. The excess amounts of the cash flow can be allocated instead in mitigating cash drain, repairs, renovations or turnovers.

Leverage

When it comes to determining calculable risk, another important aspect to consider is loan-to-value.  Loan-to-value or a  50% LTV loan is bound to have a better price amount than a loan that comes with an 80% LTV. If the property is observed to be undergoing some kind of difficulty or challenges,  it is very likely to open more rooms for error when it comes to low average loans.

The bottom line here is that we, as lenders the least thing that we will want to happen is to have our lending institution be exposed to undue risks. If you are in the process of contemplating on reaching out to a lender for your commercial mortgage concerns, you may want to address all these perceived issues or concerns to the satisfaction of lenders at the application stage. This will help increase your chances of availing the loan amount that you are trying to aim for with the lowest interest rate possible.

The moment that you have fully satisfied all the criterions for a commercial mortgage loan, it will work to your advantage that you have somehow a good idea of what is going to be your supposedly monthly payment in advance. For this purpose, you may find that a mortgage calculator will be of great help and a very indispensable tool at that. It will help calculate the monthly payment that you are supposed to make for your mortgage. Should you have any need for assistance when it comes to commercial mortgage rates Toronto, you may want to reach out to a reputable mortgage broker any time soon.

Best Mortgage Toronto

Congratulations,  if you think that you have finally found your dream home already and you are set to make the property purchase. Take a moment first and think about this, have you found the best mortgage Toronto yet?  

It is a given, shopping for your dream house is never going to be a breeze. Usually, the process is not going to be seamless as you once thought, most especially if there are obstructions to overcome along the way. And for many of us, buying a home is a major financial investment to make. Hence, everything about it must be well taken care of and well-thought about. Why? It is because it is only this way that you can ensure that you are indeed getting value for your hard-earned money. Regardless if you are a first-time homebuyer or this is your fifth time as a property investor, the experience should always remain the same, seamless and hassle-free.

Perhaps, the most challenging aspect of any home buying experience is finding the right mortgage. Anything that has something to do with money should always be treated with utter seriousness, without any frivolity. And picking a mortgage is not an exemption to this since it is a major financial decision to make. The different types of mortgages we have and available today only goes to show that there will always be something that will suit the individual needs of many people. However, perseverance and patience in this aspect is necessary as there may be a slim chance that you may find the right mortgage. Remember, the small probability does not automatically mean to say you won’t find something suitable but will necessitate you to seek out.

What Can Your Budget Afford

Before doing anything else and prior to stepping out to find a home you’d have some interest in acquiring and perhaps later on to buy as well, it is crucial that you determine first how much of a mortgage your monthly income can really afford.

The moment you have a good idea how much you can really afford in terms of monthly mortgage, then you’ll be able to determine as well the down payment amount that you’ll have to make. Saving a good amount of money for the purpose of making a down payment is one of the most important aspects of the home buying process.   In addition to this, the amount of down payment that you are capable of making can have a direct impact to the mortgage amount that you may actually qualify for. Here in Canada, the minimum required amount of down payment for a real estate property purchase is 5%, which is only for the first few $100,000 of the home’s market value. This is followed by 10% on the exceeding $100,000 up to a million amount. A property or a home that is priced above a million may have a 20% asking amount for  down payment.  

If you are an upcoming property buyer or a budding  investor anytime soon, you need to be aware that  if you present a down payment that is less than 20% of the property market value, you’re giving your seller  a valid reason to make you buy instead  a mortgage default insurance. But if you have  put up more than 20%  of the home’s down payment cost, your lender will qualify you for a conventional mortgage product. Otherwise you may be necessitated to pay an additional premium mortgage value from 0.50 – 2.75%, depending upon your LTV or Loan to Value ratio as well as amortization period.

Do You Have to Work with  a Bank or with a Mortgage Broker Instead?

Prospective home buyers have two options to consider when it comes to their mortgage concerns, they can either seek help from a mortgage broker or from their banking institution instead.  However, too many people out there are torn between these two options simply because they don’t know which among them would be the best pick for their needs.

If they choose the bank option instead, property buyers are directing themselves to a lender and you are in  control and have the last command when it comes to the negotiation part. Should you decide to work with your bank, you have the prerogative of consolidating all your services with a choice provider that you trust and may have worked with. This might even qualify you for possible discounts.

On the other hand if you decide to work with a broker, you will realize that he can give you the advantage of having at hand a number of available rates. It is because he has good access to several lenders, so you have the luxury of getting to choose the rates you think would be most practical for you to pick. Aside from this, you can anticipate that they will take on the legwork part and negotiate  on your behalf so you can have a good chance in getting the best terms and available rate.

They are not in the habit of offering the same rates or products like how the banks normally do, hence, it makes sense to offer a mortgage rate comparison. This measures is giving you a good means to compare up brokers, banks, lenders and credit unions for you.

Should You Choose a Fixed Rate or a Variable Rate Mortgage?

Since you are going to shop for your dream home, you will need to take into account if you will pick a  fixed or variable rate mortgage.

With fixed rate, you have the option to “lock-in” what can be described a predetermined  rate for a definite or set period of time. You can actually pick anywhere from 6 months to 25 years, although 5 years is the most popular time frame among many home or property buyers.

A variable rate mortgage is actually in reference to or based upon your lender’s prime rate.  Prime rate is dictated by the prevailing conditions of the national economy, which most banks are making use of as their benchmark interest rate when they need to put on a price to short term loans. Monthly,  they are bound to either decrease or increase, the variable mortgage rate, will also have to increase or decrease as well.

When it comes to choosing the best mortgage Toronto, you will have a dire need for help and your reputable mortgage broker will be your best resource for this since these professionals can provide to you all the clarifying information and details that you may need to know.

Can You Still Find An Affordable Toronto Mortgage Rates in a Challenging Economy

When times are difficult and challenging, the kind of investment that you will put into your home will represent the security that you and your family will have. If you are just renting your home, be it a townhouse, in an apartment complex, or in a condominium, you will understand that one of the biggest worries that people like you will have is that where will you go if all of a sudden your landlord made a decision not to renew your lease agreement anymore. Hence, this leaves you to thinking that having your own property is the most sound and practical decision you need to make for yourself. Aside from this, owning a property will always be a great investment for the future.

As the years will pass by, your property’s market value will inadvertently rise and fall, to some extent, but fortunately for dwelling structures, the trend has always been going upward.  For this reason, you need to look first for some of the most affordable Toronto mortgage rates possible. This way you can get started on doing your property search.

It is sad but true, not everyone these days can afford to buy a house or a property in cold cash. What does this imply then?  This means to say that a vast majority of people, maybe professionals, homemakers or investors alike, will most likely have to rely on a good mortgage loan to buy and acquire for themselves a property of their own. It also signifies that it is one of the biggest expenditures that people of today will most likely have in 15 - 30 years to come.

If you are seriously considering to buy a house anytime soon, you will easily realize that there is a wide spectrum of available mortgage programs that you can take good advantage of. You can easily make a search on the Web about mortgage rate trends in Toronto and it will showcase to you a wide array of relevant information about mortgage rates and available options for taking. However, my suggestion here is to scrutinize everything up before you give anyone of them a ring because all of them will certainly tell you that they are offering cheapest rates in town. But really there is no harm at all if you will take your baby steps on this part first.

Have yourself some good amount of diligence when trying to make a review of all the available mortgage options that you will find.  You need to take up this measure because it will certainly help you chance upon a number of incredibly good financing alternatives that are perfectly suitable and appropriate to your available budget. But you have to accept the fact that doing a substantial amount of research is needed if you really want to find something that will give you value. Some people will find this kind of task to be overwhelming so you really have to prepare yourself for that.

For this purpose, you will need educational supplies or perhaps some relevant materials that can be sourced and supplied to you by the Canadian Mortgage Brokers Association or CMBA. Such materials will be of help to you so you will be able to understand some of the relevant mortgage information that you will come across with on the Web. This organization is the national representation of the real estate finance sector. One of their goals is to help expand home ownership and to help the general Canadian public to have good access to cheap and more affordable housing options. Also, one of the other goals they have is to help promote financial literacy.

The CMBA is an organization known to help promote fair and ethical lending practices. The team is also exerting significant effort in fostering professional excellence among the property professional finance workers which they hope to achieve by means of offering to the people a wide array of public educational programs and a variety of relevant publications. The CMBA agencies are highly reputed for their efforts in clarifying a problem whenever a pressing issue arises. They also take charge in preserving policies and upholding their member’s interests. They are able to fulfill all these by staying in close communication with local officials, regulatory bodies, and even to the general public.

There are clear and present  challenges in the market today and it  has  rendered the mortgage sector to take on an unprecedented, significant measures aimed at giving assistance   to the would-be homeowners in their goal of acquiring and purchasing a house of their own as well as helping them remain in their homes in spite of the unpredictable economic challenges.

Helpful Hints to Find Helpful Mortgage Rates

Shop Around  So You Can Find the Right Mortgage Rates

One of the most common mistakes that the majority of would-be homebuyers commit is that they tend to follow the advice of their realtors to take advantage of a home mortgage program that is being offered by one of their affiliated private lenders. It is not unusual for you to hear them say, “We have been working closely with this team of professionals, so you need to consider getting your mortgage requirements from them, we know they can deliver. “ Personally, I will translate such kind of statement as “This team is one of our closest buddies, too. They actually help in buying beer for us. “ To help keep your senses awake, remind yourself constantly that your hired Toronto realtor is not going to be the one to pay the mortgage bill for the next 25-30 years but you. So you take hold of making that decision for whom you will avail your required mortgage.

11 am Eastern Time, Start Inquiring About Home Mortgage Quotes

Home mortgage rates are not fixed, they are very volatile and are fickle by nature. Hence, there is nothing unusual to it if they change every single day, even on a midday.  Like for instance, the mortgage rates that we have today, it is going to expire by tomorrow morning at 8.30 am.  If the bond market is too volatile, this may induce the home mortgage rates to change even if it is midday.  When this happens, the private lender will have to make the necessary adjustment on their discount points for each offered rates with respect to the prices for the new bonds. Then afterward, they will go on and publish the fresh new rates they have for that day.

Inquire About the Total Sum of Points and Fees

Whenever you reach out to a private lender, always inquire about the “Total Points” (Loan Origination Fee, Broker Points, Discount Points) that should normally come with their offered home mortgage rate. Know that there are a number of lenders who will only provide their quotes for Discount Points but will deliberately not include their Loan Origination Fee.  There is no chance that you will learn about the Point Loan Origination Fee not until you apply for a home mortgage program. The Loan Officer, by then, would be most certain that you will accept and take their offer since they have your application already and they have pulled as well your credit report. And lastly, I am not sure if this one is intentional or not from the part of the mortgage broker, but often they don’t include their mortgage fees.

You also need to be aware that there are mortgage lenders who are not in the habit of giving their clients a charge for Loan Origination Fee.

The moment that you have received their quoted total points, you need to inquire if they have any additional Broker Fee or Loan Origination Fee that they will charge you for.  It is crucial that you nail this thing down the moment that you have a good chance to talk to your mortgage loan officer.

When Inquiring About the Rate Quote, Confirm Details of the Rate Lock Period

If you are dead serious about buying a house anytime soon and you need to close it within 60 days, I will encourage you to request for mortgage rate quotes that come with a lock period of 60 days. There are a mortgage loan officers who will send you a quoted rate that comes with 15 Day or 30 Day Lock periods because the discount points that usually go with shorter lock periods usually lower as compared to the rate locks that go with the longer periods. It is going to be self-serving to the interest of the loan officer if he will give you a home mortgage rate with a lock period of  15 days. Your time for it is certainly bound to be wasted since the quote is not considered real in the event that you are not able to settle that particular loan in a matter of 15 days. For your own interest, make it a point that you specify that you want to get a quote that comes with a  60 days lock-in period.

If you are opting for refinancing, you can go for a 45 day lock-in period instead.  But there is a chance that this might get completed in 30 days provided, of course, that you have enough diligence and you are reaching out to your mortgage loan officer for the status and updates of your application, say, at least 2 times a week.

As much as possible, avoid getting your rate lock expire on you, why? If you allowed your rate lock to expire, your lender has the prerogative of re-locking it for you but this time around it would be a higher rate, which could either be the current rate or the original rate when you decided to relock. Whichever way you go here between the two, it is going to be a LOSE OR LOSE situation for you.

If you still have other concerns when it comes to getting affordable Toronto mortgage rates that were not tackled here, you can reach out to your reliable Toronto realtor or you can get in touch with your local CMBA’s member agency  since they will be able to provide you with more relevant information and perhaps they can even provide you with  educational supplies  that will help  you in  sorting through the wide spectrum of mortgage options and finally identify the most appropriate mortgage loan program for you.