The Four Stages of Toronto Mortgage Loan Processing

Buying a home is one of the biggest financial investments that anyone will have to make when they hit the property buying age which is 25-40 years, not just here in Canada, but anywhere you may be on the globe. However, not many of us are actually aware of the rudiments of the Toronto mortgage loan processing. Awareness and understanding of this phase are vital for us to know because it will be helpful to us and prepare us somehow to take on the responsibility entailed in property ownership, regardless if it is a commercial or residential type. And since there is a manifold of available mortgage options in the market today, a first time homebuyer will feel confused and challenged by which option he should take, most especially when they realized that they are faced with the prospect of decades-long commitment and thousands of dollars of hard-earned money is at stake which necessitates them to make wise and well-thought of decision. This is the only way they can ensure to get the value for their money.

When it comes to a mortgage loan processing in Toronto, the steps would be generally just the same, although we can’t get away with the fact that some private lenders may have a special or unique process of their own. Here are basic steps in processing a loan mortgage:

Applying for a Mortgage

You will be asked to fill out an application form for loan mortgage the moment that you have found a suitable private loan provider and decided that you will consider availing his offered loan arrangement. Nowadays, this part of the process can be done online. Soon after you have filled out all information and personal details being asked of you (you do that as openly and truthfully as possible), you have to hand it over to your mortgage processor.

After submitting your loan application, anticipate that the mortgage processor will immediately reach out to you and may require you to furnish them a copy of a number of important documents. These may include your income tax returns, recent bank statements, paystubs, and among others. All pertinent paperwork can be sent via mail, which may inadvertently cause some amount of delay in the process.

Document Verification Phase

The moment that a designated loan processor received the pertinent document he is requesting from a mortgage applicant, the loan processing stage will immediately commence. The documents being submitted to them will undergo a rigid verification process. So there is no point of defrauding them as they will have a way of knowing the authenticity of the information you have provided. One of the most commonly used techniques for verification part is giving your landlord, bank, employer or any other contact people you have indicated and feature in your submitted documents, a ring.

Once your submitted documents passed and cleared this pre-approval phase, they will submit to the lender himself. This will initiate the appraisal processing and title report part which will normally take about an average of 14 days to validate your submitted documentation.

Underwriting the Loan Application

This is the approval stage, and in here the underwriters are tasked to make another round of validation on your submitted documents. It is also at this stage that their underwriters may request for your credit reports so as to help them ascertain if you creditworthiness or not.  Title search report and appraisals receive approval at this stage, too.

The underwriters, however, practice full discretion on whether or not they will deem a borrower profile as credit-worthy or not, and thus they have the power to reject or approve a particular loan application based on their careful review of a submitted borrower profile. On the other hand, accepted loan applications would find its way back to the loan processor but this time around a pre-closing statement is included. If there are any declined or denied files, the loan processor and officer will have to carefully review them once again, and see if there is any possible way that they can help the loan applicant.

Closing Stage  

If the underwriting and the underwriting departments are completely happy and satisfied with your submitted requirements and file, your loan application status will immediately enter the closing stage. It will be initiated by the loan officer with high observance on the conditions as the underwriter has stipulated. In a short time, the lender will provide you with the loan commitment, and this will help you both set the date of the actual closing date of the loan.

In making this kind of decision, I highly recommend that you make a relevant consultation with the property seller and lender. Before closing becomes formal, it would be wise that you carefully review also the Good Faith Estimate statement and compare it what you have on the Settlement Statement document. The outline of charges that you should see on both documents should be one and the same, and if you will need further assistance on this and other details for your Toronto mortgage loan you can always reach out to a distinguished mortgage broker from Toronto.

What You Need to Know About Best Mortgage Toronto and Why?

The moment that Canadians have reached the right property-buying age which is 25-40 years of age, they know and understand all the underlying reasons why they need to look for the best mortgage Toronto that they can possibly find. Thus, it makes sense when they try to make an effort to search first to find the right kind of mortgage programs that will work best for their needs. It is not advisable to grab right away the first mortgage offer that you will come across with since there could be a number of other available mortgage programs out there with lower rates. Be careful and keep yourself from making any slapdash decision because it is certain that sooner or later you will have to regret it. It might be too late for you to realize your mistake, and that would be a very costly mistake for you to have.

If you want to secure nothing but the best available mortgage rates in Toronto, you might want to consider these 5 important pointers. These pointers can serve as a beacon of light so you will not lose your way in making the right and informed decision.

• Commit Yourself to Monitor Mortgage Rates on a Daily Basis

Regardless of what industry you may belong to, credit interests will expectedly vary every single time. It is because most of the time, the tariffs will also vary on a daily basis. Hence, in order to keep yourself abreast with the latest changes and developments, you might need to monitor them on a daily basis. Believe it or not, this pointer alone has saved many people hundreds of dollars and they did nothing else but keeping an eye on whatever the mortgage rates will go though. When you are keeping an eye daily on the latest changes in interest rates, not only that you will have a significant amount of savings but at the same time you will also increase your chances of saving so much more on interest taxes.

• Scrutinize the Mortgage Company’s Policy

So many of us are actually guilty of this in one way or another, but it is not a good practice anyways when you deliberately decide to skip on reading and making a careful, thorough review of the mortgage company’s prevailing policy. Such can be very risky, most especially when at stake here is your purchased property.  Do not skimp on reviewing a mortgage company’s policy because it is possible that there could be a number of clauses within it that may not be suitable or applicable to your needs and circumstances. Furthermore, you might even encounter a mortgage company that is willing to offer you a much lower interest rate, however, you will need to make a commitment that you will work it with them.

• Make a Comparative Analysis Between Several Firms

Different mortgage companies may offer varying rates in the various mortgage programs they have on offer. However, it is unlikely that a person would be able to know exactly the prevailing tariffs unless he himself has done a comparative analysis on them first. Checking out the official company website can give you an idea of their prevailing charges. Or you can also pay a visit to their brick and mortar office so you can make a direct inquiry regarding their offered interest tolls. This way, you can increase your chances of securing for yourself the best mortgage rates possible.

• Fixed Rates vs Adjustable Rates

Perhaps, we can qualify them as two of the most well-known and in-demand mortgage rate types in the market today. In order to avail the best charges possible, you will have to wisely choose between these two available options. While they have their own distinct features and benefits, it is the specific needs of people that are actually varying and will determine the rates from time to time. There are people who have this tendency to have an increasing preference for an adjustment in interest rates with respect to the prevailing economic conditions, while there are also others who would love instead fixed tariffs.

• Improvement of Credit Score

Everyone needs to be aware that their credit score is a major factor to be considered when it comes to determining the interest rate they will likely receive. Hence, it will work to your advantage when you always pay careful attention in maintaining for yourself a good credit score and rating. If you are not yet in the property buying age, make sure that you understand as early as now the importance of keeping a good credit rating and score, all the time.

Make sure that you keep in mind all these valuable pointers I have presented here. They will significantly help you find the best mortgage Toronto rates you can possibly get from a reputable mortgage company, without any fuzz and no sticky points.  If you will remain aware of them each and every time you want to buy a property, you’d be able to veer away from the problems and issues that are normally entailed with higher interest rates.

How to Get the Best Commercial Mortgage Rates Toronto

On several occasions, I have come across a number of commercial mortgage borrowers who are somehow interested to find out how exactly, we as lenders, determine the commercial mortgages rates Toronto that we are giving them. But to shed some light on this gray area and to give everyone some idea on how we arrive at such figures on rates, here is what I usually say to them. Lenders have several criteria to use when it comes to determining the rates for  each and every commercial mortgage loan application that we receive. However, it is necessary that we make a careful evaluation of all the involved risk first. There is nothing unusual to it but all mortgage loan applications may have a number of risks involved in them and can’t be dealt away with by the lender.

In order to protect the interest of both parties, the relative risk that usually comes with a loan application is carefully evaluated. If a particular loan application is perceived to have minimal risk, it is likely to receive smaller rates of interest. If it’s another way around and the perceived risks are higher, the higher the interest rates will be. I believe that somehow, it works to the advantage of mortgage borrowers that they have a good understanding of what is important to underwriters and lenders.

Borrower Qualifications

It is a must for lenders to take a look at the mortgage loan borrower’s or at the guarantor’s  net worth, credit history and rating, cash flow, liquidity, and even his real estate exposure and experiences will also be taken into account, prior to paying attention to his mortgage loan application. This aspect is important in determining all the possible risks that are involved in a commercial mortgage loan application. It is important that lenders and even the more stable financial institutions would agree, that seeing first that a commercial mortgage loan borrower has a good background or history in owning as well as managing similar properties. In the eyes of the lender, this is very helpful when trying to determine if the mortgage borrower has a good reputation or brings with him high risks.

It is also important for lenders to see that a loan borrower has sufficient cash reserves with him in case that unforeseen issues or events come along the way. Additionally, when trying to establish a borrower’s reputation, it is important to see that he has a good track record and punctual enough in paying his utility bills such as phone, electric, the Internet, water, credit card, etc.

Tenant Mix

When it comes to financing retail properties and offices, it is a desirable deal for lenders to come across a mortgage application that has a multi-tenanted property. If it has an observable long-term lease and good quality tenants, it’s almost assured of getting the loan application approved. If the lender sees any of these, everything else regarding the process will be almost like a formality.

High turnover rate, vacancy, and a steady state of flux are among the top things that are a turnoff to a lender. These are the things that they actually detest to see with a mortgage loan application because it is almost automatically a turndown for them when they see such things. What’s very important for lenders is that they see that your property is able to attract long term tenants and that you are able to maintain them well.

Property Condition

Lenders would consider properties with little-deferred maintenance a lower risk deals as opposed to those types that require a major renovation or capital improvements. If a particular property is in a very poor condition,  it will necessitate the lender to set aside a good amount of money or have an escrow fund that is dedicated for the purpose of repairing and long-term maintenance of the property. If a property is found to be in bad shape and is not well maintained, it can’t be expected of them to really perform well. The opposite can be said to be true when it comes to properties that are well kept and properly maintained. It is safe to say that they are able to offer lenders more value instead.

Debt Coverage

What this part pertains to is when you have an observable excess in the net operating income versus the annual mortgage payments. It is believed that there is a  much lower risk if a property is producing more excess cash flow. The funds collected from the excess of cash flow can be utilized to help minimize the possibility of turnover, cash drains, or repairs.

Stabilized Occupancy

As much as possible, what we as lenders are trying to look for are those commercial real properties that have a proven track record of high level of occupancy within the last 3 years. We qualify a property that has an observable fluctuating rental histories and high vacancy rate as a  high-risk investment. Therefore, mortgage applications for such type have a very slim chance of getting approved. We require applicants for mortgage financing to furnish us a copy of their most recent operating statements, specifically their records for the last 2-3 years. Specifically what we need to see is that the property in question has a steady occupancy with an observable increasing net income. If it goes the other way around and has a fluctuating expense and income, it will not be good as it will cast a shadow of doubt on the part of a lender. Such commercial properties will have a hard time getting approved for their mortgage applications because they are expected to generate a lot of questions.

Property Location and Market

As lenders, we perceive the good properties found in metropolitan and suburban areas as low risk as opposed to the inferior properties that are found in rural locations. It is because it is a lot easier to find another tenant for a good property that is situated in urban areas or when the remaining lease term for it is running short, you can easily find another tenant for it soon after the current one has moved out. To better illustrate what I mean here, let me cite an example. If you happen to have a property that is not situated in a good location, you may need to do something about it to attract tenants and the least anyone can do is to have the structure renovated or repaired. This will help increase its market value but you can’t really make it compete with similar properties in good locations.

The moment that you have found suitable  commercial mortgage rates Toronto, it would be very convenient on your part to know in advance the proposed monthly payment that you will have. At this stage, you will find a mortgage calculator very useful for this purpose. Regardless if you are intending to purchase a commercial office building, or you want to refinance the currently active loan that you have, it will work to your advantage to know and determine exactly how much of a loan would be most affordable to you with respect to the currently prevailing rates.

5 Essential Tips To Use Involving Private Mortgage Toronto

I would like to describe private mortgage Toronto as a special type of mortgage option. While I find it very interesting, it is kind of saddening to me that most people do not have full awareness about it. The basic definition for this type of arrangement is that in a mortgage contract, the lender may not be considered as an accredited financial institution for the simple reason that he himself or his company is not registered as such. They could be a friend you have, a relative, or anyone you know and anyone who is close to your circle.

Anyone of us, provided that we have the financial capability, can lend money to other people through a mortgage. Banking and financial institutions do not have the monopoly in lending money to other people. For as long as you arrange it with the help and assistance of a licensed mortgage broker in Toronto, you can provide anyone and offer them private mortgage arrangement. If you are looking for some other source of passive income, you can take advantage of private mortgages as an ideal investment vehicle. It can provide for you a substantial amount of monthly income. Furthermore, they are negotiable instruments, you can have them renegotiated, assumed, or transferred to another party as the borrower’s circumstances may require.

We know for a fact that the majority of financial and banking institutions we have around have always had these stringent policies and guidelines with regard to the lending services that they could provide. They could be prohibitive to their ability to offer financing support to certain borrower profiles and scenarios. With this in mind, private mortgages may now come into the picture and they will fill in those gaps and finally meet the requirements for these special needs. Under the following situations, a  loan borrower may require financial assistance under the umbrella of private financing:

• Financing assistance for a cottage property
• Financing support for debt consolidation
• Financing support to an individual recover from bankruptcy
• Financing aid for private individuals with property tax arrear concerns
• Financial help for anyone with income tax arrears
• Financing assistance for people who are challenged with proving proof for their source of income

Both borrower and private investors alike can benefit from this particular type of mortgage arrangement.

Valuable Tips

Say the magic word to as many folks as you’d like to, and don’t be surprised to receive a manifold of unexpected reactions from each one of them. There are some people who might actually perceive private mortgage as a financially foolish option, while for others, you may encounter a few who would be welcoming and receptive to this kind of mortgage arrangement instead. If you are intrigued by this,  here are some valuable tips you must know first:

There is a need for you to charge interest.

In order to veer away from tax concerns,  you will need to collect a minimum amount of interest or the so-called applicable federal rate.

You need to have a promissory note.

This document should be indicative of the terms and conditions for the mortgage arrangement. Of equal importance, too, and should be included are the interest rates and the scheme and schedule of repayment.  

You must have a deed of trust.

Some other people know this as a mortgage or security deed.  In a way, this serves an assurance that a particular loan is backed up or secured by a property and with that the lender reserves the right to take back the property in the event that the borrower fails to make his repayment schedule up to date. In order to take off the loan’s interest payments,  it is imperative that there exists a recording of the deeds of trust, and this should be done with the consent of the local authorities.

Consider getting insurance.

A reputable public attorney can provide the legal advice you may need when it comes to securing and obtaining an insurance. However, you also have good chances of saving some good amount of money in not minding a separate lender’s policy.

Ponder upon the perceived possible risks.

As a general rule here, if in case you’re always having a hard time in trying to obtain a mortgage arrangement from a bank,  then most probably lending money to some other people in need is not something that you should even think about, either. Maybe, yes, there are a few circumstances which you might have a good awareness of but a banking institution might just be too reluctant to even consider. Say, for example, your child will soon finish his studies and most positively would also start working soon and eventually earn his own money.

More importantly, don’t even think about engaging yourself in private mortgage if you are the type of person who is not willing to take the risk of the possibility of losing that significant amount of money you have. If you can’t take the gamble, I will discourage you from engaging in a private mortgage or else you will be deeply distraught if things don’t come the way you expect them to.

It does not really matter whether you are an investor or a loan borrower,  a reputable mortgage broker who is knowledgeable enough in private mortgages is imperative to have so that he can help prepare and arrange the mortgage terms and conditions, properly. But most importantly, he is the best to go to person in any case that you have a need for a good guiding hand in Toronto mortgage arrangements and set-up. This is highly important, most especially if you want to be assured that you will have a well-informed decision when it comes to private mortgage Toronto.