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Archive for the ‘Services’ Category

Let us Pay for YOUR Home Inspection!

Friday, April 9th, 2010

If you are buying a home, no matter what the age, please do yourself a favour and get a Home Inspection completed by a certified Property Inspector. So many problems or potential problems with a home may not be visible to the naked eye, and can cost you thousands in repair bills down the road.  A Property Inspector should provide you with a comprehensive report that identifies any potential areas of concern with the :

Foundations / Wall Structures / Floor Structures

Roof

Electrical System

Plumbing System

Heating System

Windows

EXAMPLE OF A GOOD HOME INSPECTION REPORT

But Beware!

Beware of Home Inspectors who are not what they claim.  A recent episode of Marketplace focused on Grow Ops that the Home Inspectors should have easily identified to the unsuspecting buyers.

Safe Homes Canada

Is an example of a company that only uses Registered and fully Qualified Home Inspectors, and has saved homeowners thousands of dollars.

www.safehomescanada.com

WE WILL PAY FOR YOUR HOME INSPECTION

On all new mortgage applications received until June 30th 2010, we will reimburse you for the cost of your Home Inspection.

** Note the following conditions apply to this promotion: on purchases only, deal must successfully close, all mortgages are O.A.C., no commercial properties, single family homes only

Call us today for more information

1-866-712-3943

Or complete the confidential comment field below

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Fixed vs Variable Mortgage Interest Rates

Wednesday, April 7th, 2010

Many people shopping for a mortgage are often confused about the advantages and disadvantages about a Fixed vs a Variable Interest rate on their mortgage.

By definition a Fixed Interest Rate does not change for the entire term of the mortgage.  A Variable rate mortgage changes each time that the Lender’s Prime Rate changes.  This is usually directly linked to the Bank of Canada Rate.

As of today, the Bank of Canada’s rate is 0.25, and the Prime Lending Rate is 2.25%.  The next possible rate increase is April 20th.  The Bank of Canada has 8 opportunities during one year to decide to raise their prime lending rate, or leave it unchanged.  Experts currently are estimating that the Prime Lending Rate will start to rise by this summer.

Fixed Interest Rates:

Benefits of a Fixed Rate:

Easy to budget; your payment will remain constant for the term of your mortgage.   Security; you can feel secure that your rate will not change for the term of your mortgage.  This is usually the choice for First Time Homebuyers.

Cons of a Fixed Rate:

Potential loss of savings if you are paying more than the variable rate

Variable Interest Rates:

Benefits of a Variable Rate:

Savings!  Generally a Variable Rate mortgage will save you the most money in interest.

Ability to switch to a Fixed Rate; most variable rate mortgages are easily converted to a fixed rate at a point that the borrower chooses.

Lower penalty to break your mortgage; most Variable Rate mortgages have a penalty to break the mortgage equal to 3 months interest.  Most Fixed Rate mortgages have a penalty that is the greater of 3 months interest or the Interest Rate Differential.  Low fixed rates have been creating havoc in recent years where the Interest Rate Differential is costing borrowers thousands of dollars more to break their mortgage.

Cons of a Variable Rate:

Budgeting: your monthly payment may change, either go up or down, depending on the prime lending rate, so it is more difficult to budget your cash flow each month.

Risk; there is some level of risk if the interest rate rises.  Thus it is important for a borrower who chooses a variable rate to be informed and watch the Interest Rates.    You can also talk to your Mortgage Agent about watching the markets for you.

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Buying a Rental Property

Friday, March 19th, 2010

Are you consider purchasing a Rental Residental property with 1-4 units?

I have been investing in Rental properties for the past 7 years. I would like to share with you at this time HOW I evaluate a residential rental property that I am considering buying.

I will use the following property as an example: 319 Broadway Ave, Orangeville Ontario as listed on 519Property

(See my calculations below). What I look for:

a) property should be cash flow positive

b) Return on Investment; I like to be higher than 10%, the calculations below do not include ROI for increase in property value; which would increase the ROI even more

c) there is room for a second mortgage so that I do not need to come up with the entire 20% down payment

Based on this evaluation; this is an excellent investment. Other things to consider when buying a rental property;

-who pays the utilities; tenant or landlord?

-what is the “Curb” appeal of the property (how it looks from the outside can have a great impact on quality of tenants)

-is it currently rented and if so what are the terms of the leases (one year, month to month)

CMHC is implementing new regulations in April that are tightening up lending on Rental Properties. They will not insure a mortgage more than 80% loan to value, and they are only going to use 50% of the rental income to qualify the debt ratios. There are other options available to Investors than going through CMHC insurance. I would be happy to talk to you on how you can still buy a property with less than 20% down. If there is a property that you are interested in I will prepare free of charge a complete analysis like the one below for you.

sarah@dropmyrate.ca

319 Broadway Supplimentary Mortgage Information
Monthly Annual
Rental Income $ 3,100 $ 37,200
Less Expenses:
Insurance $ 250 $ 3,000
Prop Tax $ 300 $ 3,600
Net Income $ 2,550 $ 30,600
Mortgage Info:
DownPayment 20% $ 83,800
Mortgage amount 80% $ 335,200
Interest Rate 4%
Monthly Pmts (35 yr am) $ 1,484
***OAC
Monthly Cash Flow $ 1,066
Annual Cash Flow $ 12,792
Annual ROI 15.26%

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How Mortgages work for a First Time Buyer

Tuesday, March 9th, 2010

Are you considering buying your first home? Or perhaps you are re-entering the housing market? If you are currently paying rent, there is a good chance you can afford a mortgage.

Buying a home does not need to be a stressful time, it should be exciting and fun. If you have excellent professionals on your side they will glide you through the process effortlessly. Find the right Real Estate Agent and Mortgage Agent and they will be able to help you through the rest.

How Much Down Payment Do I Need?

You only need to have a 5% down payment to purchase a home. You should also make sure that you have a little extra for closing costs; for example Land Transfer Tax, your Lawyers Fees, etc.

The 5% can be withdrawn from an RRSP. It can also be borrowed from another source, i.e. a credit card or line of credit. Your downpayment could also come from a Gift from a family member or friend.

What is a Pre-Approval?

A Pre-Approval is when your Mortgage Broker processes a Mortgage Application for you and gets you pre-qualified to purchase a home. This is beneficial in so many ways most importantly:

-tells you how much you can afford so you know what price range of home you should be shopping for

-gives you a competitive edge when placing an offer over another bidder who is not pre-approved

What is the First Time Home Buyers Tax Credit?

Visit the Government of Canada website for more information and speak to your Tax Accountant to see if you qualify

What type of Mortgage should I choose?

Speak to your Mortgage broker about the benefits of each type of mortgage. You probably will have a choice between a Fixed Rate Mortgage, and a Variable Rate Mortgage. With some lenders a Variable Rate mortgage can be converted at any time to a Fixed Rate, so you can have the benefit of both. Many first time homebuyers feel more comfortable with a Fixed Rate Mortgage, so they can easily budget their monthly payments.

How do I get started?

Complete our confidential contact form (below) or on the CONTACT page

We will email you a Mortgage Application Form. This gives us your basic financial information and will allow us to complete a free confidential assessment for you, to tell you IF you qualify for a mortgage and for HOW MUCH.

(*all information is O.A.C. and subject to income & debt qualification ratios)

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Mortgages for Commercial Property

Friday, March 5th, 2010

Commercial lending can be a very challenging arena to enter. There are a limited number of Lenders that will consider Commercial deals. A deal is generally considered to be commercial if it is a Multi-residential building with more than 4 units, an office or retail building, industrial condo’s or buildings, and any other type of income generating property that is NOT residential.

Once a Property is considered Commercial, a few things change when looking into Financing the property. Generally you will require more money as a down payment. Anywhere from 15% to 50% depending on the type of property. The interest rate on the Mortgage will be higher than current posted Residential Rates. And you may require private lending as opposed to a traditional bank.

Your best approach to financing a commercial property is to work with a Mortgage Broker who has access to Multiple Lenders, and will have experience placing many different types of commercial properties. Mortgage Brokers usually have contacts in private lending also, that may give you some flexibility. For example if a Lender on an office building is only willing to loan up to 65% Loan to Value, your Mortgage broker may be able to find Private funds for a second mortgage up to 75% or even 85% so you need to invest less of your own funds.

If the building is being purchased by a corporation, generally the lender will require the Personal Gaurantee of the principals behind the Corporation.

To apply for a commercial mortgage the following information will be reviewed:

Typical Information Required to Obtain Detailed Loan Proposal
• Loan Amount Required and Purpose
• Rent Roll or Leases
• Project Operating Statements
• Ownership Details
• Pictures / Property Description
• Details of Registered Debt or Purchase and Sale Agreement

For more information about Commercial Lending please contact us by using our contact page or the comment form below, and one of our Licensed Mortgage Agents will be in touch with you within 24 hours.

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Drop My Rate Services

Tuesday, March 2nd, 2010

Pre-approvals All homebuyers are at an advantage when they can approach a sellers market with a pre-approval in hand. Find out how much you can afford, what your payments will be, how much your down payment will be before you start shopping. This will make you much more confident when buying your home.

First Time Home Buyers Let our Mortgage Agents help walk you through the process to buying your first home. Advice is available on budgeting, taking funds out of your RRSPs for a down payment, etc.

Refinancing Would you like to use the equity in your home to; Renovate your kitchen or basement? Purchase an investment property? Pay down some of your high interest debt?

Mortgage Renewals Your current lender will send you out renewal information on your mortgage about 6 months before the maturity date of your mortgage. We are confident that in almost every single case we can BEAT THAT RATE! At the very least you owe it to yourself and your family to confirm you are paying as little as possible on your mortgage interest. If we can’t match or beat the rate we will give you $500!! Contact us to find out how this works!

Debt Consolidation Are you feeling overwhelmed by debt? It may be possible and in your best interest to consolidate your mortgage + your high interest debt into one low monthly payment. A free Cash Flow analysis is available that will show you how much you may be able to save monthly.

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