How to Get a Mortgage for a Rental

private mortgagesIf you want to buy a rental property but you don’t have 100% cash up front, you’re going to need a mortgage. You can go the conventional route with a bank, or you can look for a private mortgage lender to help you get there. Either way, you’re going to need to know what documents you need, research banks and lenders, find a real estate agent and nail down what kinds of costs you’re going to face before you buy the home. It’s important that you go in prepared – if you leave anything to chance you can easily end up with a foreclosure and bad credit.

How Much Can You Spend?

Before you even start looking at private mortgages, you need to know what your budget is. You don’t want to go off the maximum mortgage amount either; look at the down payment you’re willing to save up and multiply that by 5. You’re going to need 20% down to buy a home, even if it’s a rental or income property; if you can’t get that much money up you’re not going to do well when investing in real estate. It never hurts to make sure that you have as much liquid as possible to qualify for your mortgage application once you put it in either!

Start Looking at Lenders

Once you know your working budget, you’re going to want to start looking at different lenders. Don’t only look at private mortgages, make sure you look at conventional lenders too. You never know where the best deal is going to come from – after all there are so many lenders out there that are competing for your business. Make the most of your money while you have it, because good investments can be harder to come by than capital. From here you’ll want to be pre-approved for a mortgage; this just means that you’re ready to buy a home, but you’re not under any obligation to do so just yet.

Talk to a Realtor and a Mortgage Broker

Once you know how much you can spend and have a good idea of the lenders you want to work with, it’s time to talk to a realtor and a mortgage broker. They’ll be able to help you find a home and know if the mortgage deal you’re getting is actually the one that’s right for you. Getting a few expert opinions on the matter before you buy a home is the best way to go. Once you’ve found your dream home and a good conventional or private mortgage lender, it’s time to fill out the application.

Fill Out Your Loan Application and Wait

Filling out your loan application shouldn’t be too hard, work with a mortgage broker to make sure you’re doing it right. Now you’ll just have to wait for a couple weeks or a couple months to find out if you qualify. Once you know, you’ll be able to move on to the closing stage. If you were already pre-approved for your mortgage, you’ll be able to skip this step and move ahead!

Fill out are fast and free loan application today!

Do You Need a Private Mortgage?

private mortgages in torontoFiguring out if a private mortgage is the right choice for you can be difficult, but that’s why you need to understand your options. Just because you have bad credit or no credit at all doesn’t mean you have to go the alternative financing route. Private mortgages in Canada carry the same risk as any other kind of mortgage; what you’ll want to be careful about is how much you borrow and how fast you’re going to pay off your loan. Here we’re going to go over a few different things you need to know about financing your home, so let’s get started!

What Are Private Mortgages?

Private mortgages give you the flexibility you need to borrow, but they also give you the security of a traditional loan. These are made by lenders just like a regular loan, but instead of going to a bank you’ll need to go to a Toronto mortgage broker to get in contact with different lenders. You don’t want to do this part on your own, and a mortgage broker is only paid after you’re satisfied with your choice of lending and everything is closed out. If a mortgage broker tries to get you to pay up front, find another. Their fee comes out of those fun closing costs you pay when ownership of the home is transferred to you.

How Are Private Mortgages Different from Regular Mortgages?

A private mortgage is different only because of who is lending the money and who is borrowing it. Many traditional lenders won’t loan money to people who are self or seasonally employed; you may be retired or you may run your own business and have a hard time proving income. You may have a bad credit history you’re working on. Either way, you’re going to need a mortgage broker to help you through the process and to get the financing that you deserve to get you on your way.

Do You Need a Private Mortgage?

Situations vary greatly from person to person, but it never hurts to explore your options! You’re going to want to go over the paperwork with someone who knows what they’re doing, and this is why you need a mortgage broker. You shouldn’t have to go it alone, and with the right help you won’t have to.

How Much Do Mortgage Brokers Cost?

They work on a nominal fee; this can be 1% of your mortgage or it could be $300. It will range from broker to broker and you’ll want to be careful about selecting your broker solely on the basis of cost. You won’t always get what you pay for when it comes to mortgage broker, so make sure you ask around and look at reviews of different companies online. This way you’ll be able to maximise your chances for getting financing; then you’ll be able to get your private mortgage and save money all at the same time!

Do You Need Private Mortgage Insurance?

private mortgagesMany people don’t know what private mortgage insurance is, much less if they’re going to need it or not. If you’re thinking about getting a private mortgage, talk to us first; we’re experienced Toronto mortgage brokers who can help you find the right financing at the right price! Here we’re going to go over everything you need to know about private mortgage insurance and if you will need it or not.

Why Private Mortgages?

Private mortgages can help people with poor credit, no credit, or those with unique circumstances get the financing they need to buy or refinance their home. There’s nothing new about private mortgages and they’re virtually identical to any other kind of mortgage; instead of getting your financing from a bank you’ll get it from a private individual or company. The interest rates can be a little higher on these types of loans, and that’s where we come in. When you choose us to help you get a good Canadian private mortgage, you’ll be able to get the mortgage for you. Always choose a mortgage broker when looking at this kind of financing!

What is Private Mortgage Insurance?

When you get a private mortgage, you may not be able to get enough money up for your down payment. For conventional mortgages the down payment amount can be as low as 5% interest, but this can vary wildly from one private mortgage lender to another. This will usually stay far below 10%, unless your credit is a problem. We can usually help you figure out where you rate on the credit scale so you can take proactive steps to solve your credit problems before they become a problem for you in the loan process.

But if you can’t meet your down payment requirements, you’ll be required to purchase private mortgage insurance. This means you can put down less of a down payment, but until you’ve paid off 30%+ of your home you will be paying insurance premiums. After this point, you can talk with the lender and have the insurance waived and get out of paying it.

Will You Have to Pay Private Mortgage Insurance?

It’s always a good idea to get pre-approved for your Canadian mortgage (private or conventional!) and this way you’ll know how much financing you’re approved for. From this, you’ll be able to figure out what your 10% – 20% down payment will be like, and you can either save up or decide to just go with private mortgage insurance. Right now mortgage rates in Canada are at the lowest they’ve been, and probably will be, for many decades. You’ll be able to get a good interest rate while it’s still available, and pay mortgage insurance for a couple of years. In most cases it will pay to just do this and save on interest later.

If you’d like to learn more about what we can do for you, contact us today! We can help you sort out what type of financing will work for you.

Private Mortgages Save You Money

If you’re like the millions of Canadians who have not so great credit or are self-employed, you’re going to have trouble getting a mortgage. It’s not your fault, but traditional lenders have to weigh their risks… but this doesn’t mean you can’t get a mortgage! Private mortgages are one of the best avenues for people to get the money they need, but are they right for you? Here we’re going to go over everything you need to know about them, so keep reading!

What is a Private Mortgage?

Mortgages are simply financing for homes. The “Mort” part of the word comes from French; this just means that it needs to be paid off in full by the end of the contract. You’ll need to pay off your mortgage by the end, but there is always the option to refinance your mortgage.

Private mortgages are lent to all kinds of borrowers by private companies, investors and individuals. This means that they’re going to look at what you can offer as collateral instead of what your credit is. Collateral is something that you can put up for the loan like a car or home; if you have collateral you’ll most likely be able to get a private mortgage; they’re usually given to borrowers who are looking for second mortgages.

Do You Need Equity to Get a Private Mortgage?

It really depends on what type of private mortgage you get. You’ll want to talk with one of our mortgage brokers to see if what you need to qualify. Equity is the value of your home minus whatever mortgages you currently owe. Here’s a quick experiment:

You have $20,000 for your down payment on a $100,000 home. If you want to borrow with a private mortgage you would need to borrow $80,000. You’ll technically have 20% equity in your home, and 80% debt. You’ll be able to get that 80% loan by putting up the $20,000 that you put down. This is confusing, but that’s how it works.

Interest Matters with Private Mortgages

You’ll want to go with a Toronto mortgage broker to make sure that you’re getting a good deal on your private mortgage! While they may offer you decent terms and the money you need, if you’re paying 10% interest you’ll owe the same amount you borrowed in interest by the end of a ten year term. Interest matters when you take out a mortgage; here are some examples:

You borrow $30,000 at 10% interest. If you only make the minimum payment you could end up with $3,000 accruing each year. If you have a 30 year mortgage you could end up paying over $90,000 for borrowing $30,000. Don’t sign the paperwork before you talk to us. We’ll help you find a good loan at a good rate.

We’ll help you find different offers from different lenders so that you don’t get stuck with a bad deal. When you look at the big picture you’ll discover just how much you can save!

Who Are Private Mortgage Investors?

private mortgageWhen you’re looking for alternative financing, you may think about private mortgages; when you choose us for your Toronto mortgage broker, you’ll be able to find the best private mortgage investor. Before we talk about who private investors are, let’s talk a bit about what a private mortgage is. Instead of going to a bank to get your financing, an individual or private company will give it to you. You’ll be legally obligated to repay who holds the note (the lender) within a certain amount of time.

Why do Private Mortgage Investors Lend?

These people lend money as an investment; when you give someone money to buy a home they’ll pay on time. It’s a good way for the borrower to get the financing and a great way to ensure a regular revenue stream for the investor. They’ll be able to lend out more money and with less restrictions than you would find with a more conventional mortgage lender.

One of the most important things you need to know about these kinds of lenders is that they use interest (also known as points) to make the most profit; they may end up charging you more in interest than a bank could ever dream of. You’re going to want to be careful about the terms of the agreement as well! Your loan may start off at a low rate but it could balloon at any time. We’ll help you understand the terms offered to you so you make the right choice for your unique situation.

What are the Advantages of a Private Mortgage?

When you apply for a traditional or conventional mortgage, you may run into problems. Everyone has problems with credit at some point in their lives, and it can be easy to overlook things that can really affect your credit. The “average” FICO or credit score is 600. If you stray too far from this number (lower 500s for example) you can pay a penalty of extra interest or wind up being rejected completely from the mortgage process.

Instead of hoping you get the mortgage you need to buy or refinance your home, a private mortgage may be the right choice for you. These have less stringent credit considerations, and the private investors who back them are looking at long term income. They’ll examine you to see if you’re a profitable borrower or not. You’ll need to prove that you have a regular income and employment (we can help in this situation), but beyond that collateral in your home will serve in the place of good credit.

Finding private mortgage lenders can be difficult, and you’ll need a Toronto mortgage broker who knows what they’re doing. Our brokers are networked and experienced; we’ll help pair you with the right lender for your unique borrowing situation. We’ll apply for both private and conventional mortgages, maximising your chances for success. Your home is your greatest asset, don’t just let anyone handle it for you!

Visit our private mortgage page today, to learn more about how we can help you:

Is Anyone Really Unfinanceable?

conventional mortgagesSome people look at private mortgages because they’re not able to find financing any other way… but is anyone ever truly unfinanceable? There’s always a lender out there that wants to work with you, but unless you work with us as your Toronto mortgage broker you might not be able to find the right one. Just because you have bad credit doesn’t mean you have to get a bad mortgage, and here we’ll talk about what affects your chances for a mortgage.

Slow Pays, No Pays and Repayment Problems

If you’ve had a history of delinquent debts or slow payments, you could have some trouble finding a good mortgage – private mortgage or otherwise. You’re seen as a high credit risk because you’ve run or had trouble repaying before; if you have any outstanding debts you’ll want to consider debt consolidation and settlement before you apply for a mortgage. The less debt you have now the better your chances are, and if you can show that you’re working hard to get old debts paid off even the touchiest lender will want to work with you. Talk to one of our Canada mortgage brokers today to learn more.

No Credit, No Problem

No credit can be just as bad as bad credit, but what can you do? Opening a credit card with your bank for 6 months to a year or taking out an auto loan can help you establish the right kind of credit to get a mortgage, but you’ll also need more. You’ll have to be able to show 2 years of employment and earnings – without that you could easily end up paying a lot more interest than you would otherwise.

Mortgages for the Self Employed

If you have bad credit and you’re looking for mortgages for the self employed you’re going to need to work with one of our Toronto mortgage brokers. We’ll be able to help you figure out which one of the lenders will really give you the best chance as a borrower.

Bad Credit

Whatever caused it, you have it, but what do you do? You want to get a mortgage to buy a home or refinance one you already own, but you’ve been turned down or offered a bad deal. Let’s face it, everyone’s had bad credit in their past. The only thing that lenders make money on is interest so any reason they can think up they’ll use to charge you more for your mortgage. When you choose us as your Canada mortgage broker we’ll help you make the most of whatever circumstances you’re facing.

Everyone is different, but the less you can pay in interest and the more favourable terms you can get from the outset the better. Private mortgages are a great way to save money and there are many lenders in the area that work with people with bad credit. Everyone can get a deal when they deal with the right lender. Call today and see what we can do for you.