Is It Time to Leverage Your Home Equity?

If your homeowner with equity, you can cash in and start making equity in your home work for you with a home equity loan. After all, you’ve been saving for years, making your payments on time, isn’t it time you started getting something back? This kind of mortgage, also known as a second mortgage, can help you remodel your home, start a business, pay for retirement, or help you buy a new home. Under the current mortgage rules, you can burn up to 80% of your home’s worth; you may not actually borrow this much though! Here were going to talk about equity, how one of our Toronto mortgage brokers can help you, and if this is the right choice for you.

What Is a Home Equity Loan?

After years and years of payments, you’ve started building value in your home, and that’s equity. The less debt you owe on your home, the more equity you have. As Canada mortgage brokers we can help you unleash the power of your home’s hidden equity to get the money you need for your next project.

But before we talk about qualifying for a home equity loan we need to talk about loan-to-value ratios or LtV. No one will ever get 100% loan to value, even with the 720 or above credit score. You’re most likely to get between 60% and 80%, and you’ll only be able to borrow up to 80% of your home’s value – and that’s after they subtract whatever you still own it. This is why you to have as much equity available as possible.

Who Can Qualify for a Home Equity Loan?

If you have equity you can qualify for home equity loan – the trouble is finding the RIGHT but home equity loan. When you work with us as your Toronto mortgage broker you’ll understand what your real options are. We don’t work for the banks, we work for you, so you’ll know what you’re supposed to be getting. Credit, employment history, and payment history all play a role in your eligibility.

Understanding the Risks of Borrowing

Anytime you borrow against your home there will be risks. What we can do as mortgage brokers is mitigate those risks, helping you understand if now is the right time to get a second mortgage on your home. After all, what’s the point going through with it if you’re only going to end up losing your home?

Let Us Help You

Working with us will help you save time, money, sanity, most importantly your home. We’ll help you understand if your lender is on the up and up, you can find a better deal somewhere else, or if maybe you should just wait to borrow against your home. A little time can do a lot of things for your credit, and the better your credit is, the better your mortgage terms will be. Visit our home equity loans page today, and see how much you could save on your next mortgage!

Put the Equity in Your Home to Work with a Home Equity Line of Credit

With a home equity line of credit, or HELOC, you’ll finally be in the equity in your home to work. But if you were to find the lowest HELOC rates, fantastic and easy access to your credit line, and the flexibility that suits your life you’re going to need one of our Toronto mortgage brokers help you! Here were going to talk about how HELOCs work, the benefits and pitfalls, and everything else you need to know if this is the right decision for you. You want to make sure you’re getting the lowest rate possible – the lower the interest the less you have to pay!

How does a home equity line of credit work?

Instead of you having to worry about things like dealing with a large lump sum or planning far ahead, a HELOC works a little different. Open one for a rainy day and use it when you need it with the flexibility and easy access options you need. Open one right now and fund your retirement, start a business, pay your kids’ Uni tuition. Unlike a second mortgage or home equity loan, you borrow just what you need and pay it back when you use it, and borrow it again if you need to. If you never use it, you don’t have to worry about paying it back – it’s just that easy.

Who is eligible for a home equity line of credit?

If you have equity in your home, you’re eligible for a HELOC. The more equity you have the better the deal you’re going to get – but you’re also going to want to have good credit, a good job and proof to back it up. The lender needs to know that you’re going to be able to pay back this loan; if you don’t have good credit or a good income, you may still qualify for a HELOC – but you may have to pay more in less favourable terms and interest rate penalties.

Can I pay off my home equity line of credit early?

This depends on the lender you’re working with. When you choose us as your Toronto mortgage broker we’ll help you through the process. From figuring out whether you should go with Lender A that offers a great rate but a penalty if you pay early, or Lender B which offers the ability to pay it off early with a slightly higher interest rate, you might want to take Lender B.

Get the best rate with us

If you want to get the best rate on your next HELOC, you’ll want to work with us! As Canada mortgage brokers we can help you figure out how much you can save – you might even be surprised at how much it could be! If you’ve already worked with your current lender to find a HELOC, we can help you find a better rate – so give us a call today!

Also, visit our home equity line of credit page today to learn more!

Why the Toronto Real Estate Market Cooling Down is Normal

Buying a home in Toronto has been nothing but challenging these past years, but as the housing market begins to cool down, there is more hope that buyers may have chance of purchasing their dream homes soon.

Turning of the Tides?

The TREB shared that some home owners have cashed out their equity after hearing about the provincial housing policy in April and the increase in supply of resale homes in May due to the first quarter’s strong prices.

Sellers that listed their homes in spring are seeing lower and fewer offers from would-be-buyers. In fact, home prices in Toronto dipped 7% in May compared to April although it is still 15% higher than May of last year’s average home price.

Toronto Real Estate Board director of market analysis Jason Mercer shared that a month-to-month decline did happen although the market soared. The details were released in the end of May statistics by TREB.

The May cool down occurred with a 43% hike in active listings but Mercer was quoted that this is not an indication that the housing bubble will burst. He added that for that to happen, a dramatic economic change has to take place. Examples of such would be a real increase in lending rates or a significant change in regional employment.

Toronto Housing Competition Still Fierce?

Mercer further shared that there is still enough buyer competition to keep pushing home prices up – if the average price growth of about 15% and less than 2 months of housing inventory is to be looked upon. He also said that buyers are simply taking a step back this month to see how the new government policies and foreign buyers’ tax will affect the market,

A housing commentary from RBC Economics Research stated that buyers and sellers are locking horns because we’ve entered a period of price expectations adjustment. This will predict whether a buyer’s market will be coming in the months ahead.

One realtor said that buyers should not expect to chance upon a steal in the near future but that they can expect to have more choices and more negotiating power.

Owner of Spring Realty Ara Mamourian shared that a lot of buyers are misunderstanding available data and thinking that there is a crash where there is none. There is no huge buying opportunity but rather an increased opportunity to buy with less competition, not an absence of it and certainly no huge discounts coming soon. He added that for safe measure, sellers must make sure that their realtors have sold their old home first before buying their next home, taking a 180 degrees turn from the first quarter’s real estate advice.

Desmond Brown of Royal LePage said that the current market is not a new normal, rather only a return of the old normal. He also shared that he is welcoming this market change because this will allow people to move to a bigger home if they need to without having to jump hoops because they can’t afford to.

Thinking of taking advantage of the changes in the Toronto real estate market to purchase a home soon? Contact us at Mortgage Central Nationwide to find out how we can help.

Planning to Turn Your Basement into an Apartment or Income Suite? Read This!

Plenty of people are converting their basements into an apartment or income suite to be a source of extra income to help pay for mortgage and many other things. Other people simply have too much space and don’t want to waste an income opportunity. However, before you pool your resources and start construction or renovation, keep in mind that there are so many things to consider before transforming your basement into a basement apartment.

Questions You Must Ask Yourself

  • Do you really need to do this?
  • Do you know where to get funds to push through with this project?
  • Will converting your basement into an apartment be legal?
  • Will your plan for the basement apartment comply with the retrofit guidelines from the fire code?

If the answers to the questions above are all favourable, then you are on your way to having a basement apartment that can increase the overall value of your home and give you extra income. Note that doing anything illegal such as failing to comply with local fire codes and zoning laws mean that you will have to pay thousands of dollars in fine once reported to authorities such as your Town’s Building or Fire Department.

Things to Check

In the event that you will be buying a home with basement apartment that needs fixing, keep in mind that just because it is there does not necessarily mean that it is legal. You will have to check with your local Fire Department or with the city municipal standards department to find out if your baseline apartment is registered as a second unit. If this isn’t the case, then you will have to research how to secure a permit for it to be legal and comply with the fire code.

Also note that your area may or may not permit the building or conversion of a basement apartment. An example would be that basement apartments that were rented out prior to the 31st of October 1995 are considered legal although the local zoning code does not permit it.

Toronto Basement Apartment Considerations

In 2000, the City of Toronto has permitted having second suites on all semi-detached and detached homes in the city as long as they meet the following conditions:

  • The house and any additions should be at minimum 5 years old
  • The second suite must have its own bathroom and kitchen, a self-contained unit
  • The second suite cannot have a floor area that is larger than the rest of the house
  • The home with the second suite on most cases, must have a minimum of two parking spaces
  • Existing second suites should comply with the property standards, zoning standards and Fire Code in Ontario

All homes that do not meet the above must apply to the City for permission and note that other areas such as Vaughan, Mississauga, and Brampton, still do not permit second suites unless built or rented prior to November 1, 1995.

The four basic requirements of the Fire Code must also be upheld as well. They are as follows:

  • The main home and the second suite must have adequate fire separation
  • The basement apartment must have its own separate fire exit
  • Smoke alarms must be installed
  • The Electrical Safety Authority must conduct an electrical inspection to ensure that all occupants of the home and basement apartment will have access to sufficient electricity

More technicalities have to be observed but the above are the main requirements.

Should you still wish to build a basement apartment and need extra cash to fund such a renovation, or need some funds to ensure an existing suite is made legally compliant, a second mortgage or a home equity loan would surely help. Contact us to know more!

Everything You Need for Mortgage Refinancing Checklist

So we’ve talked about mortgage refinancing, but here we’re going to go over a quick checklist you’ll need when you come speak with one of our Toronto mortgage brokers. If there are any special documents you need aside from these we’ll let you know – but this list will about cover it. While a few things won’t apply to you, it’s important to read over the whole list! Don’t skip it! Read it right now! Before it’s gone forever – well no not really, but you get the point.

  • Photo or Picture ID – You need a way of proving that you are you. It’s better that the bank is paranoid about proving that you’re you and not some identity thief intent on stealing all of your equity with you none of the wiser. Passports, driver’s licenses, ID cards, anything generally issued by the government will help you establish your identity to a prospective lender.
  • Proof of Income – What do you do for a living? Self employed? Using your business to prove that you’ve got some kind of income rolling in? Paystubs? All of these things will help show that you have an income to pay your mortgage.
  • Bank Statements (Private and Business) – You’ll need bank statements for the last 3 to 6 months (farther back the better) to show that you have money in your account.
  • Divorce or Marriage Documents – Are you receiving alimony, child support from a divorce? You’ll need to bring in your divorce decree. Have you married since your mortgage started and you need to show that you have another income in your household that you want considered as your own? Bring your marriage documents with you.
  • Mortgage Documents – The loan origination document is VERY handy to have. You’ll also want to bring in statements (the most recent is best) from the current mortgage lender to show that you’re current with your payments. Don’t leave home without these if you have them, especially the most recent statement.
  • Tax Forms for 2 Years Prior – Showing proof of your income with your taxes is the best way to go about it. If you want your business income to be considered also bring tax returns for your business too.
  • Utility Bill – Most lenders are going to want proof that THIS is your home. A utility bill usually suffices to prove that this isn’t another mortgage refinancing on a rental property.

There are other things you might need to bring – but you’ll find these out when you schedule an appointment with one of our Canada mortgage brokers. Remember that each lender will be different and their criteria can range widely! Some won’t care if you’re refinancing a rental property or that you don’t have a utility bill. Others won’t care if you bring in information to prove that you and your partner live together. It all ranges wildly from one lender to the next, but when you work with us you’ll find out what you need to know.

Learn more about our great rates for mortgage refinancing here!

Open Up the Tap on Your Equity with a Home Equity Loan

You’ve been making timely payments all these years, isn’t it time your home started to give a little back? With the right mortgage broker (us!) and a home equity loan you can get all the money you need to consolidate your debts, send your kids to university or even start a business. With any kind of equity loan the devil is in the details and you don’t want to try and negotiate this one your own. Let’s explore how they work and why you would want one.

What is Equity?

If you don’t know, equity is how much you have invested in your home. If your mortgage(s) are completely paid off you have 100% equity. If you’re still paying off half your house you have 50% equity. You can figure out how much equity you have in your home by subtracting the remaining debt from the most recently appraised value of the home. This way you’ll be able to know exactly how much of a home equity loan you can take out.

Don’t Take Out a Large Home Equity Loan

Just because you’re approved for a big amount doesn’t mean you should actually borrow that much! You’ll want to work with one of our Toronto mortgage brokers; we understand the market, the tricks lenders pull and we’ll work hard to help you get the best equity loan possible. Every situation is different, don’t take a cookie cutter mortgage that just isn’t in your best interest. Also be careful about what the terms are before you sign on that dotted line.

Plan Ahead

When it comes to home equity loans you need to have a plan for the future. Why are you borrowing this money? Will you get some kind of return on it? Are you going to be able to pay it back? How much will you need to pay each month to pay back your home equity loan? If you don’t know the answers to these questions one of our Canada mortgage brokers can help. We have a lot of experience when it comes to home equity loans and we’ll be able to show you how to get the right loan.

Your Equity is Important

Each time you make a mortgage payment you’re socking away money for the future – that future is now. Why should you get robbed of your equity because you didn’t know any better? We’ll work with you to help you understand your rights and obligations as a borrower and to really understand what you’re signing. From finding the right mortgage lender to signing we’ll be there with you for every step of the way.

You’ve worked hard for your home and you shouldn’t have to lose it. Working with us as your Toronto mortgage broker will help you not only get the money you need now but keep your home in your future for years to come. Don’t get a bad deal, get the right deal!

Discover our home equity loans today!

How to Manage Home Equity Lines of Credit

Right now you can get excellent LtVs (Loan to Value ratios) on home equity lines of credit, but is it right for you? Here we’re going to go over everything you need to know about HELOCs and the differences between these and home equity loans. Always do extensive research before brokering equity in your home – speak with one of our Toronto mortgage brokers and see if this is the right choice for you.

What is a Home Equity Line of Credit?

Before we get started, let’s talk about what a HELOC is and isn’t. Every month you paid your mortgage bill you accrue equity in your home – this is like money in the bank that you can borrow against later when you need it. Unlike a home equity loan you won’t borrow a HELOC in one big lump sum. It’s more like a credit card that you use over time when you need to. Some will be structured to have a minimum rotating balance, some will only last for 2 years. The devil is in the detail and it’s important to get the terms just right and that’s why you need a Canadian mortgage broker.

What Can You do With a Home Equity Line of Credit?

You can do anything you want, but it’s important to manage it wisely. You’re effectively gambling with your future and you’ll want to put the money into something that will net you a good return. Education, improvements in your home to bring it up to the same level as other homes in the neighbourhood, and other things that will bring you a return. A vacation to Tahiti might sound nice, but you’ll want to use the equity in your home sparingly on frivolous purchases like these.

What Shouldn’t You Do with a Home Equity Loan?

Any Toronto mortgage broker will tell you to be careful with home improvements. IT’s easy to get carried away with luxury improvements to bring up the value, but there is no category for “super luxury”. Importing Brazilian hardwoods for your entryway and Swarovski chandeliers in a neighbourhood that nets homes around $100,000 isn’t really going to help! You’ll want to bring the home up to the same condition as other homes around you with a few touches that get people excited and interested. Your home is your greatest investment, don’t throw it away!

Home equity lines of credit can be tricky to negotiate, so don’t go it alone! Speak with one of our Canada mortgage brokers today and see what we can do for you. The line of credit may have compounding interest that can rack up pretty fast and if you end up with a predatory lender you could easily get upside down on your home – don’t let this happen to you. We’ll help you through the process step by step and help you understand your rights and responsibilities as a borrower so you know what you’re getting into before you sign on the dotted line.

Learn more about our home equity lines of credit here!

Why Private Mortgages Work

We’ve talked a lot here about how private mortgages work, but it’s time to start talking about WHY they work. Like always you’ll want to speak with one of our Canada mortgage brokers to make sure that this is the best route for you. While they are different, they’re virtually identical to every other sort of mortgage – you’re just dealing with a private lender instead of a bank or government organisation. Like mentioned earlier, everyone is different and you should do your research and talk to use first.

30 Year Mortgages are Out

With the last major changes made to the mortgage rules last year, 30 year mortgages are out. The max amortization rate for any kind of mortgage, including private mortgages, is now 25 years. While this will raise your payments a little you’ll be able to avoid a debt bubble. Any Canada mortgage broker can tell you that the longer your mortgage runs the more time you’ll have for something to go horribly wrong.

Private Mortgages Have Less Default Risk

Private mortgages year after year have been shown to have a much lower risk of default than other kinds of mortgages. Why is that though? Is there some dark magic at play or just better terms? Like all loans you’ll have to be careful about who you work with and what your mortgage terms are. When you work with us as your Toronto mortgage broker we’ll be able to work through your contract and understand if you’re getting a good deal or not. It’s only a lower default risk if you’re getting a deal that’s right for you.

Lower Interest Rates are the Norm

Most borrowers will see their interest rates drop a few percent when they pick a private lender, but some can see even larger jumps. It really depends on where you’re starting at – if you’re a higher credit risk or have a history of bad credit you could run into trouble. That’s exactly why you will want to work with us as your mortgage broker; no one should have to pay more than they have to and we’ll go over every aspect to help you make the most of your terms. Don’t get stuck with a bad deal when you can get the one that’s right for you.

Better Repayment Terms

Private mortgages feature better repayment terms. Most borrowers will see fewer punitive terms like early repayment penalties and late payment penalties with some interest forgiveness thrown into the mix. But everyone is different and each lender is going to offer you as a borrower a different kind of deal. That’s why it’s so important that you don’t do it on your own.

When looking for the right mortgage you need the right help. We’ll be able to help pair you with a lender that not only offers you a good deal now but a good deal later. We’ll make sure that you don’t just get a good teaser rate – you’ll get a mortgage you can live with. Visit our private mortgage page to learn more!

Your Mortgage Refinancing Checklist

So we’ve talked about mortgage refinancing, but here we’re going to go over a quick checklist you’ll need when you come speak with one of our Toronto mortgage brokers. If there are any special documents you need aside from these we’ll let you know – but this list will about cover it. While a few things won’t apply to you, it’s important to read over the whole list! Don’t skip it! Read it right now! Before it’s gone forever – well no not really, but you get the point.

  • Photo or Picture ID – You need a way of proving that you are you. It’s better that the bank is paranoid about proving that you’re you and not some identity thief intent on stealing all of your equity with you none of the wiser. Passports, driver’s licenses, ID cards, anything generally issued by the government will help you establish your identity to a prospective lender.
  • Proof of Income – What do you do for a living? Self employed? Using your business to prove that you’ve got some kind of income rolling in? Paystubs? All of these things will help show that you have an income to pay your mortgage.
  • Bank Statements (Private and Business) – You’ll need bank statements for the last 3 to 6 months (farther back the better) to show that you have money in your account.
  • Divorce or Marriage Documents – Are you receiving alimony, child support from a divorce? You’ll need to bring in your divorce decree. Have you married since your mortgage started and you need to show that you have another income in your household that you want considered as your own? Bring your marriage documents with you.
  • Mortgage Documents – The loan origination document is VERY handy to have. You’ll also want to bring in statements (the most recent is best) from the current mortgage lender to show that you’re current with your payments. Don’t leave home without these if you have them, especially the most recent statement.
  • Tax Forms for 2 Years Prior – Showing proof of your income with your taxes is the best way to go about it. If you want your business income to be considered also bring tax returns for your business too.
  • Utility Bill – Most lenders are going to want proof that THIS is your home. A utility bill usually suffices to prove that this isn’t another mortgage refinancing on a rental property.

There are other things you might need to bring – but you’ll find these out when you schedule an appointment with one of our Canada mortgage brokers. Remember that each lender will be different and their criteria can range widely! Some won’t care if you’re refinancing a rental property or that you don’t have a utility bill. Others won’t care if you bring in information to prove that you and your partner live together. It all ranges wildly from one lender to the next, but when you work with us you’ll find out what you need to know.

Learn more about our great rates for mortgage refinancing here!

Is Mortgage Refinancing Right for You?

Let’s face it, we all want to pay off our mortgage as soon as possible but sometimes you need a little help. Maybe you’ve gotten behind on your payments, maybe your interest rates are spiraling out of control – either way you need to know that you’re taking control of your mortgage, not the other way around. With interest rates now at the lowest they’ve been for years and soon to rise, now is the time to take advantage and get the deal that works out best for you.

The Good:

Sometimes mortgage refinancing comes with some great perks like:

Easy Access to Credit Means Cheap Money

When interest rates are this low, lenders are willing to work with just about anyone. Even if you have bad credit when you work with one of our Canada mortgage brokers you’ll get the help you need to find a mortgage that works for you. But while interest rates are low now, they aren’t going to stay this low forever!

Better Options than When You Started

When you first took out your mortgage you probably didn’t have the best credit – after years of timely payments you’re going to have a better track record that lenders will be interested in. All that hard work is finally going to pay off with better options for mortgage refinancing. Say bye bye to being a financial wallflower and hello to an option you can finally live with.

You Have More Leverage Now

You have something else you didn’t have when you started: equity. With equity in your home you’ll be able to secure a much better deal this time around. While you may have to give up a little equity to get a better interest rate, but for most it’s a great trade-off.

If you’re not sure what kind of equity situation you have, talk with one of our brokers.

The Bad:

Not everyone is going to benefit from mortgage refinancing.

Fees Can Cost You Big

Closing a refinance can be just as costly as getting a new mortgage – don’t do it just to save a point or two! You should be getting a seriously great deal on mortgage refinancing before you pay fees. Talk with one of our Canada mortgage brokers to find out if you’re getting the best rate for you.

Not Everyone Can Qualify

It’s important to understand that not everyone can qualify for a mortgage refinance their first time out – depending on your credit, how much equity you have and how much more time you’re willing to put into a mortgage will give you an idea if this is really the right way for you to go.

You’ll Extend the Life of Your Mortgage

If you’re trying to pay off your mortgage early, you might be hit with expensive pre-payment penalties and a few years of extra payments. Extending the life of your mortgage may not always be a great thing, especially if you want greater mobility (aka the ability to move out and move on).

Sometimes it’s a great fit, sometimes it’s not. Talk to one of our Canada mortgage brokers today or visit our mortgage refinancing page here to see if mortgage refinancing is really the right choice for you.