Should You Have a Real Estate Lawyer When Buying A Home?

No one buys a home without thinking of it as an investment or as a huge decision with both long-term and short-term effects. After all, even if you’re only buying a second home, or a transition home, a house is still an expensive purchase.

Why Get A Lawyer?

There is  no doubt that there is a lot of money at stake when buying a home, not to mention the effort and emotional investment that you put in it. It is only normal to want to make sure that you’re making the right decision and that your purchase is legitimate to protect your financial interests. This is where real estate lawyers come in.

Getting a real estate lawyer can help make sure sure that all the legal aspects of buying a home is handled properly. A lawyer can minimize or totally prevent expensive mistakes more so for first time home buyers.

What A Real Estate Lawyer Can Do For You

Real estate lawyers do more than simply witness documents getting signed, says Malerie Rose of Rose Family Law in Oakville. They can review legal documents for you such as the Status Certificate for condos, or the Agreement of Sale or Agreement of Purchase. They can also dig up information to make sure that the property has no other claims, has a clean title, has no unknown debts, and that the title is valid. If unchecked, these details could result to a huge legal battle later on.

Will Hiring A Real Estate Lawyer Be Worth It?

A lot of people think that hiring a real estate lawyer is a waste of money and an unnecessary expense but that is far from reality. Hiring a professional to look into the legalities of a property that you’re planning to buy may seem like a frivolous action; however, this is actually a wise decision  that can save you time and money.

Hiring a lawyer can cost anywhere from a few hundred dollars to a few thousand dollars plus an additional couple of hundred dollars for extra costs. These are all reasonable expenses considering that you’re embarking on a financial commitment that’s more than 100X the lawyer’s fee.

Do You Need A Lawyer to Buy A Home?

The short answer is no, because you can definitely buy one without lawyers if you’re willing to risk losing the home (and your deposit and payments made) later on. The smart answer is yes.

Why You Should Invest as a Private Mortgage Lender

Nothing beats diversification when it comes to building a solid investment portfolio.  Where to find a good investing opportunity then? The stock market is a favourite for many, but it comes with a high level of risk. You’ve also got government backed securities, something that offers little risk but is at the mercy of inflation. Why should it bpm2e a case of choosing the lesser evil when you can have the best of both worlds?

Do you know that private mortgages carry very minimal risks and offers a great ROI? That does sound great, doesn’t it? But if you’re not convinced yet about investing as a private mortgage lender, no need to hire a private investigation agency in Toronto here are 5 reasons why being a private mortgage lender rocks:

Has Better Rates Compared to Banks

Private lenders can charge higher rates than banks, and consequently, can make more money than banks. With so many people having the ability to pay a high down payment but lacks the income verification or credit score to seal a deal with a bank, you won’t run out of buyers, more so if you factor in savvy brokerages who’ll connect you with such people for the benefit of all parties involved.

It Beats Being a Landlord

Being a landlord means having to take care of repairs and maintenance, both of which can get very expensive. Selling the property and acting as a private lender means you still get a steady source of income without having to shell out some cash for future repairs.

Saves You the Hassle of Dealing with Flakers

Buyers behave much better than renters. Why? Because as a private mortgage lender, you’re their lifeline back to better credit. Of course buyers can still present a risk, but if the buyer has put in around 30% down payment, there is actually less risk for you because it shows that buyer has some financial skill.

You Get to Set the Loan Terms

You don’t have to follow fixed rates for 15 to 30 years as a private lender. You can apply adjustable rates as long as the buyer agrees to it. The loan terms and duration can be exactly how you want it to be. Shorter terms means that you can get your investment back sooner so you can move on to more and better investments while longer terms presents you with a more predictable cash flow.

Lending Decision is All Yours

You don’t have to base your lending decision on the borrower. You set your terms and down payment your way. A large down payment means that the risk of default will be a lot less and the likelihood of the borrower falling behind on payments less of a worry too. Even in the case of default, you still can get a healthy profit from of selling the property.

Finding buyers and clients need not be a chore as a private mortgage lender. There are brokers like us that help buyers and clients find private lending sources like possibly you! Have any questions on private lending and how this can work for you? Contact us today!


5 Ways to Turn Your Bad Credit Around with Refinancing

No one finds bad credit attractive. It is even much worse when you need to borrow from credit facilities because it shows all the skeletons in your borrowing history. Times when you’ve defaulted in your payments for one reason or another such as failing to pay on time can gravely affect a lender’s decision to give you mortgage. A pending loan that got out of hand and bad credit from previous borrowing will magnify the problem even more. If you’re aware of all this, then there’s hope in the horizon!

What to do then? How can you boost your credit score? Proactively trying to keep your financial health in good condition can prevent you from achieving worse credit in the future, but how?

Applying for a refinancing to get a new loan with better terms and payment plan can save you a lot of money. New mortgage terms can help you pay back your debt and therefore boost your credit score. Sounds like a plan? You bet!

So how can you get a new loan when you have a bad credit history? Here are tips to help you get refinancing at much better interest rates:

Tidy Up Your Paperwork

Wrong information can break your credit score. Check your credit documents and see if the information contained therein is valid. Rectifying errors can make you more eligible for refinancing at lower interest rates.

Make it Personal

You need to make your lender understand why you have a bad credit situation and the best way to do that is to meet your lender in person. By helping your lender understand your situation, you’re letting them see what you’re doing to pay back and that you care.

Know Your Ability to Pay

Things change, and what you can afford to pay a few months ago may be totally out of what you can afford now. The good news is that you can change your loan terms to help make payments easier for you. How can you do that? By refinancing! But remember that you have to be able to convince your lenders that you have the ability to pay your new terms. One thing you can do to convince them is to show proof of your ability to pay by depositing some money in the bank or by showing proof of your expected revenue. This often leads to favourable payment terms with lower interest rates so be sure that you can hold your end of the bargain!

Have Strong Guarantors

Pick your guarantors right. The people guaranteeing your loan should have a better credit rating and score than you because this shows lenders that your guarantors believe that you have the ability to pay your mortgage. After all, being a guarantor means they’re willing to pay your loan should you default on payment. Establishing that you have a low risk of defaulting will make your lender more willing to refinance your mortgage at more favourable rates.

Shop for a Better Lender with a Strict Loan Policy

Your main goal should be to get a better credit rating/credit score and to get out of debt, so don’t be tempted to go for loans with tempting terms such as those that allow you to withdraw extra payments. Facilities that tempt you to spend more are no better than parents who spoil their children and will do you more harm than good in the long run.

A better mortgage package means that you don’t have to borrow again, because hopefully, you’ll be able to have a better hold of your financial health. A great mortgage broker can guide you to the best lenders who can offer you the best rates and terms.

Looking for a mortgage consultant in Ontario to help you apply the tips above? Allow us help you with our 60 years of industry expertise fixing bad credit and helping people like you with their mortgage. Contact Homebase Mortgages today!


New Mortgage Rule Now in Effect

With real estate prices soaring high for hot markets like Toronto and Vancouver, mortgage insurers and the government are attempting to cool down hot markets with a change in mortgage rules starting today.

Starting mid-February, portion of mortgages above $500,000 will require a 10% down payment, a move that’s been calculated to slow down the home buying spree as home buyers will have to put down more cash before they can call a house their home. It is believed that this change will put-off homeowners from taking on mortgages they can’t really afford; because the banks will then have to tighten lending rules with possibly more people needing a loan to come up with the extra funds for down payment.

Politics and Real Estate

Back in December, the federal government had announced that the Canada Mortgage and Housing Corporation, along with other mortgage insurers, will be requiring double the 5% homeowners previously used to pay to have their mortgages insured. This move is aimed to create a protected environment for buyers as shared by Finance Minister Bill Morneau – a government attempt to stabilize the real estate market in ‘hotter’ cities.

Coming from the perspective of those who are tracking Canadian housing trends, Real Estate Investment Network senior analyst Don Campbell says that this change will most likely have an impact on first-time homebuyers in hotter markets; making the demand for starter homes in Vancouver and Toronto theoretically decrease as people try to save themselves from getting locked into mortgages they may not be able to afford.

Quite a number of recent surveys point to the sobering thought that some people are stretching their financial resources dangerously thin, as they take on alarming debt loads with high interest rates to be able to finance the ownership of their dream home. It remains to be seen if this latest government-led measure will indeed shield the economy given the high household debt loads a lot of Canadians are carrying around.

New Era for Mortgage Brokers?

Licensed mortgage brokers seem to think that the introduction of the new mortgage rule is indeed good politics, but is lacking in terms of policy since how this affects the whole Canadian market is not likely to be felt that much. Why? The homeowners purchasing homes costing above $500,000 are not that many. Statistics show that only about 10,000 of the 120,000 to 125,000 homes above $500,000 will be affected by the new rule and those are mostly saturated in Vancouver and Toronto.

Realtors and analysts alike are on the camp that any effect of this new mortgage rule will be short lived and will eventually fade off as it becomes ‘normal’ for people buying in the $500,000 to $900,000 range. If any, people in affected hot markets will just get more creative in securing loans, such as by contacting Vancouver and Toronto mortgage brokers that can get them access to loans with great payment terms and will enable them to afford their dream home.

Worried about this news or need assistance getting approved for a home mortgage in Toronto? Contact our dedicated team of Toronto mortgage brokers today!

Toronto and Vancouver Mortgage Rules to Change Starting mid-February

Planning to purchase a new home? Moving to Toronto or Vancouver soon? You might be in for a surprise starting February 15,2016! Vancouver and Toronto’s housing markets are at a frenzy and the Liberal government turned to tweaking lending rules in an effort to cool them down.

The Big News

In an announcement a few weeks ago, it was revealed that new residential mortgages with portions in excess of $500,000 will be subject to a 10% down payment instead of the current 5% –  a change that will take effect a month from now. The first $500,000 will still be subject to a 5% down payment and existing mortgages will remain as is, with homes costing more than a million still having to follow the required 20% down payment, as shared by Finance Minister Bill Morneau.

Benjamin Tal, CIBC’s deputy chief economist says that Calgary could get hit hard by this change – because it has a relatively large share of high-ratio mortgages compared to other places.

A Matter of Safety?

Different policy changes had been placed in effect in recent years to limit Canadians’ vulnerability to financial risk in the event of a correction in the housing market. Since 2008, there has been four occasions when mortgage rules had been tightened to cool off blistering real estate markets. The cooling effect is indeed effective, albeit it should be noted that the effects are only temporary.

Morneau told reporters in an interview that the increase in down payment is believed to help with stabilising the entire market as well as make people more secure by creating a buffer. It is estimated that about 1% of the total market will be affected by this change; a number that is equivalent to an estimated number of less than 10,000 home purchasers.

Morneau further shares that the move is aimed to cool down and keep the housing market stable; more so for Toronto and Vancouver, both of which are sporting fiery hot real estate markets. 4% of Toronto’s home sales and 6% of Vancouver’s home sales are above $500,000; a big difference compared to the national average of only 1%.

The Minister also shared that the change is planned in such a way to not have a negative impact on certain markets, like Alberta’s where the situation is more challenging.

The announcement has been widely expected in light of growing concerns that homeowners could end up being in a very tight situation if prices suddenly collapse in an overheated market.

Comes with a Price

What does this mean for the aspiring home owner? A lot, apparently.

Those who may be planning to purchase a pricier home in Vancouver and Toronto might be ‘forced’ to put off doing so because they would have to save up more money for the down payment, not to mention having to meet some mortgage requirements like having a minimum annual income of $120,000 with no debts to qualify if someone wants to purchase a half million-dollar home. A family or individual with a monthly income of $7,000 after taxes and spends $5,000 to $6,000 on monthly expenses will need a few years to save up for the new down payment – something that’s not to be taken lightly.

Need help getting approved for a home mortgage or have some questions regarding this mortgage news? Meeting your real estate financing needs is our expertise! Contact us today!

3 Things You Need to Know About Home Mortgages

Buying your first home is a proud moment! Who doesn’t want to own their own home? The problem is that a mortgage can be the most expensive bill you’ll ever have to face, but if you plan ahead you’ll be able to avoid a lot of the pitfalls that come with home mortgages. Here we’re going to go over everything you need to know and about getting the right mortgage and how to avoid the wrong one.

What’s the Difference Between Pre-Qualified and Pre-approved for Mortgages?

Pre-qualified and pre-approved are two of the most important terms you’ll hear when dealing with home mortgages. Being pre-qualified means that you can get a rate over the phone and can walk into the bank and get a rate… just like everyone else who is applying for financing. Being pre-approved means getting a good faith estimate of how much you would pay every month, how much financing you can qualify for and other important things you need to know when dealing with mortgages. No matter what lenders tell you, being pre-approved doesn’t mean you have to do business with them.

Don’t Settle on the First Lender You Talk To

If one lender gives you a good deal, there will always be another who will give you a better deal. This is why it’s important to comparison shop before choosing the lender to finance your home mortgage. With a Toronto mortgage broker you’ll get an experienced and friendly local expert to help you get a better deal. It’s important that you compare not just loan amounts but interest rates, monthly payment estimates and terms as well. While one lender may give you fantastic interest rates, they may turn around and hit you with penalties that triple the interest rate in six months because you pay your payment early.

The most important reason you shouldn’t try to comparison shop on your own is this: when lenders check your credit report they bring down your credit score. But if you can apply to many different lenders within two weeks of the first checking your credit report, you’ll be able to avoid excessive damage to your credit as well as find the right lender for your needs. Why should you hope and pray that a lender will give you financing when banks are eager to get your business?

The Difference Between Conventional and Private Home Mortgages

A conventional mortgage is financing granted by a traditional lender like a bank; these can be troublesome for people who have gaps or issues with their credit history. Private home mortgages on the other hand don’t really use credit to factor in what kind of mortgage people can get, but favour things like equity and collateral more. Each will have its plusses and minuses so you’ll want to speak with one of our Toronto mortgage brokers to make sure you get the right solution for your needs and situation. Why take what you can get when you can make lenders compete?

To find out how we can help you find a great mortgage, apply online here!

Buying Your First Home with a Home Mortgage

Buying a home for the first time when you’re Canadian is a unique experience. There’s now a dizzying array of options for borrowing: private mortgage lenders, second home loans and home equity loans, they can all be confusing! If you want to get a good deal and understand the contract you’re entering into for the next 30 years, you need a mortgage broker. Here we’re going to go through what you need to know about home mortgages.

Are You Ready to Buy a Home?

Before you start shopping for mortgages, you need to ask yourself if you’re really ready to buy a home. Is your credit in need of repair? If so check out our page on debt consolidation. Do you have steady employment, or do you have a job that is hard to prove income (self-employment or small business owners for example)? With a mortgage broker you’ll have a helping hand to prove your income and will make the mortgage process so much easier.

What Home Should You Buy?

While you might love the look of one home, you’re going to want to look at many different homes. Do you want a neighbourhood where you can walk around or do you want the ultimate self-sufficient condo? These are the kinds of things you’re going to have to take into consideration to make sure you get the right home. Since most home mortgage rates run between 15 and 30 years this is going to be your home for a long time to come. Make sure you can love it and live in it.

The Home Mortgage Process Explained

You need to shop for your home loan BEFORE you start looking at houses. A mortgage broker will help you find a great rate and a good amount that gives you breathing room to find your dream home. A real estate agent will work from there; knowing your budget helps you save money applying for homes and having home inspectors to come out. You’ll also know that a house is just out of your range and won’t have to waste time thinking about what could have been.

Once you’ve been approved and sign the papers, you own a house! You’ll have to pay your loan on time or you may face penalties. Working with a mortgage broker you can make sure that the terms of the agreement are fair and sensible; there are many terms that can make little sense and come back to bite you later. Prepayment penalties charge you more for paying ahead of time, and balloon payments blow up your loan payments to insane heights when you’re ready to close it out.

Is a Home Mortgage Right for You?

If you need money for the down payment on your house, you need a home mortgage. There’s just no way around it, and you’ll be able to get into the home of your dreams. With the help of a mortgage broker you’re going to be able to get a fair rate and pay off your home in a shorter amount of time.

Home Equity Loans Account for Most Canadian Household Debt

Are home equity loans accounting for most of the increases in household debt? Bank of Canada warns that Canadians may be taking on more HEL debt than they can handle.

A study of borrowing trends has confirmed that loans secured by the equity in homes are adding to the outstanding debt, and not home mortgages, as is commonly believed.

The country’s homeowners have been increasingly converting home equity to cash to pay for renovations and purchase of consumer goods. Latest reports from Statistics Canada reveal that average household debt has increased to 153 per cent from 110 per cent back in 1999, and 70 per cent of this is mortgage debt.

As home prices have scaled higher, debt-to-household equity has also risen. Bank of Canada says that a correction in home prices may affect Canadians. With the upswing in home prices, households are having to take out bigger home mortgages to fund their house purchases, and using the equity from rising home values to pay for their other purchases.

Should home prices reverse, values will drop while Canadians will still be saddled with significantly large mortgages, increasing debt-related stress. According to Statistics Canada, an economic downturn that leads to home price depreciation, can take a turn for the worse as consumer spending plummets.

An important reason for spending to drop is that home equity may fade away, diminishing the borrowing ability of homeowners. It is estimated that a price drop of 10 per cent can lead to a one per cent dip in consumption.

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