By Tony Dhami

Verico Designer Mortgages

I don’t know if anyone has noticed, but there are a lot of "For Sale" and "Sold" signs out right now. We have a very active real estate market in the Greater Hamilton-Burlington area. Statistics from the REALTORS® Association of Hamilton-Burlington Multiple Listing Service® (MLS®) are showing that March was a record-breaking month for the number of new listings taken and we were close to a new record for the number of sales in the month of March.

Spring is typically a busy time for REALTORS®. It’s the time when a lot of corporate transfers come through and homeowners find themselves selling their homes and looking for new ones in new cities. It’s also the time when families wanting to up-size think about looking for new homes so their kids can settle into a new school before the end of the current school term, or at least make sure they are in their new home for the start of the next term. Before they buy a new house, they also want to make sure theirs is sold or at least on the market.

This year has been busier than most springs, and there are two additional factors at play – low interest rates and the coming Harmonized Sales Tax, or HST. Earlier this year, the Canadian Real Estate Association updated their forecast for 2010 and 2011 to indicate that the market in Ontario will be stronger than usual because of these two factors.

Low interest rates have been with us since last year, and it is generally accepted they can’t last. We’ve already seen, in the last week or two, increases in some mortgage rates from the big banks. While the new rates don’t look as attractive as what we’ve been seeing for the past few months, they are still very good rates, and they shouldn’t be deterring anyone from purchasing a home. The current wisdom is that rates will go up again in the fall, and advice from many quarters is that now is still the best time to be buying a home.

And then there’s the HST. The new Harmonized Sales Tax will apply to most services buyers and sellers use in their housing transactions. Right now sellers and buyers pay only 5% GST on their real estate commissions, legal fees, appraisal fees, home inspections and myriad other services connected to a real estate transaction. After July 1 they will pay 13%. It’s not a huge amount for any one transaction, but taken together could add around $1500 to the average real estate transaction. For those knowing they will be purchasing a home this year, it only makes sense – and saves dollars – to make the purchase before the new tax comes into effect.

It’s no wonder that this spring market is strong – there’s all the usual spring market activity, plus the added incentives of low interest rates and beating the start of the HST.

www.topnegotiator.ca

www.hamiltonmortgagebrokers.ca

By Tony Dhami

Dealing with debt by accelerating your mortgage payments can be a very smart, efficient, and successful way of paying down your mortgage, while paying less in interest.

There are a couple of ways to do this effectively. First, commit to the lowest amortization period you can while still being able to make the payments and qualify for the mortgage amount you require. The lower your amortization period is (25 years versus 35 years), the higher your payments, but the less you will pay in interest over the life of your mortgage.

Secondly, you can accelerate your monthly mortgage payments into bi-weekly or weekly payments, thus paying down your mortgage with less interest. For accelerated bi-weekly payments, you make a payment every two weeks (monthly payment divided by two) but because there are 52 weeks in the year, you end up making an extra 2 payments in the year.

Of course, accelerated payments don’t necessarily do anything for erasing debt unless there is a change in spending habits made. By rolling your debt into your mortgage (by refinancing) allows you to pay lower interest rate on your debt (no 18% credit card debt), but doesn’t stop you from re-accumulating that debt by continuing to overspend

www.topnegotiator.ca

By Tony Dhami

On July 1, 2010 HST will replace GST on New Home Purchases. However, there is a phase in period that must be understood in order to accurately budget for your new home.
If the date of purchase contract is on or before November 18, 2009, GST (5%) will be applied with the same exemptions as have previously been stated, regardless of completion date. If the purchase is made (contract signed) after November 18, 2009, GST (5%) will be applied ONLY if completion is before July 1, 2010. If completion occurs after July 1, 2010, HST (13%) will be applied.
All contracts signed after July 1, 2010 will be subject to HST (13%).
HST Rebates
HST is a harmonized tax comprised of GST (5%) and PST (8%). The Rebate Programs for First Time Home Buyers are computed using two different calculations for the two portions of the HST as follows:
GST rebates are at 36% of GST payable for purchases under $350,000; partial rebate between $350,000 and $450,000; and no rebate on purchases over $450,000.
The PST portion rebate is 71.43% of PST payable up to a maximum rebate of $26,250 (approximate purchase price of $525,000)
In Short
If the purchase price is under $525,000, the purchaser will effectively pay GST (with applicable rebates) plus 2% of the original purchase price (comprised of the PST).
If the purchase price is over $525,000, the purchaser will pay 13% HST less $26,250 in maximum PST rebate.

By TONY DHAMI
Verico Designer Mortgages Inc


More Canadians are heeding the interest-rate warnings and focusing on curbing their debt loads in 2010.

A Manulife Financial poll released Tuesday found that paying down credit cards and lines of credit is growing as a financial priority among Canadians. In fact, more than a quarter, 28 per cent, pegged debt elimination as their main goal, up from 24 per cent in 2009 and a five-year high.

The results come at a time when households are tackling post-Christmas credit card bills and struggling with record

Debt, both mortgage and consumer. With interest rate hikes on the horizon, Bank of Canada Governor Mark Carney last month cautioned Canadians against taking on more debt than they can handle.

Despite this red flag, Canadians dug deeper this December, with spending in the holiday period rising 3.44 per cent in volume over the previous year, according to Moneris Solutions, which processes credit, debit and online payments.

The central bank estimates there was nearly $1.4-trillion in total household credit outstanding in October, the most recent data available, up from $1.3-trillion a year earlier. Much of the growth stems from mortgage debt, which stood at roughly $950-billion in October, compared with less than $890-billion a year earlier.

The Manulife national survey of 1,000 people, conducted last month by Research House, found that the second most-cited financial priority among Canadians was paying down the mortgage. It was chosen by 14 per cent of respondents, up from 11 per cent last year.

The third priority – saving for retirement – was listed by 11 per cent of those polled, down from 14 per cent a year ago.

“Paying down debts is understandably a priority, particularly at this time of year,” Paul Rooney, chief executive officer of Manulife Manulife Canada, said in a news release. “Given the economic challenges in 2009, we shouldn’t be surprised to see more Canadians focused on ensuring their financial house is in order.”

Only 5 per cent of respondents listed saving for a child’s education, through a tool like a registered education savings plan, and saving for purchasing a home, as financial priorities, on par with last year’s results.

By TONY DHAMI
Verico Designer Mortgages Inc

Dealing with debt by accelerating your mortgage payments can be a very smart, efficient, and successful way of paying down your mortgage, while paying less in interest.

There are a couple of ways to do this effectively. First, commit to the lowest amortization period you can while still being able to make the payments and qualify for the mortgage amount you require. The lower your amortization period is (25 years versus 35 years), the higher your payments, but the less you will pay in interest over the life of your mortgage.

Secondly, you can accelerate your monthly mortgage payments into bi-weekly or weekly payments, thus paying down your mortgage with less interest. For accelerated bi-weekly payments, you make a payment every two weeks (monthly payment divided by two) but because there are 52 weeks in the year, you end up making an extra 2 payments in the year.

Of course, accelerated payments don’t necessarily do anything for erasing debt unless there is a change in spending habits made. By rolling your debt into your mortgage (by refinancing) allows you to pay lower interest rate on your debt (no 18% credit card debt), but doesn’t stop you from re-accumulating that debt by continuing to overspend

Tags: debts, hamilton, hard, loan, mortgage, private

Written By Tony Dhami

www.topnegotiator.ca
www.hamiltonmortgagebrokers.ca

Type "mortgage lending company" into any search engine and thousands of results appear. Given this, how do you know what to look for in a mortgage lending company? Following are some guidelines:

Tip #1: What to Look for in Mortgage Lenders: Canada.

Comparison Shop. Comparison shopping gets you familiar with what to expect as far as interest rates, loan products and closing costs. If you don´t comparison shop, then you won´t know if the rate being quoted is within standard guidelines given your credit and financial specifics.
Tip #2: What to Look for in Mortgage Lenders: Canada.

Mortgage fraud is on the rise in Canada, and more and more consumers are reporting it. Check with the Office of Consumer Affairs of the Canadian Federal Government for complaints filed. Also check with your province´s Office of Justice and the Attorney General.
Tip #3: What to Look for in Mortgage Lenders: Canada.

Ask for referrals. One of the best ways to find a reputable mortgage lending company is to check with friends. Choose one that´s been around for a while. Ask enough people, and you´ll probably start to hear the name of one or two that fit the bill.
Tip #4: What to Look for in Mortgage Lenders: Canada.

Research. The internet provides a wealth of information. Research any company you´re considering. Couple this with your offline research (e.g., referrals), and you should be able to find a reputable mortgage lending company in no time.

Written By Tony Dhami
www.topnegotiator.ca
www.hamiltonmortgagebrokers.ca

Private mortgage lenders are likened to angel investors by some. They are similar because they usually provide short-term loans for asset-backed investments, e.g., land, property.

As the hard asset is the collateral, private mortgage lenders don´t lend based on a borrower´s credit. There are many different types of private mortgage lenders. However, following are some things they all generally have in common&58;

Commonality #1. Private Mortgage Lenders: Canada - Loan is granted based on the equity in the property (e.g., a building, land).

Commonality #2. Private Mortgage Lenders: Canada - Loan is usually for a short period of time (6 months to one year), as compared to a traditional mortgage span of 15, 25 or 30 years. For this reason, and a few others, loans given by private mortgage lenders are typically referred to as hard money loans.

Real estate investors tend to take out hard money loans because they are quicker to get and don´t require a lot of documentation like traditional mortgage loans. This allows them to "hop on a good deal" when they see one without wading through a bank loan process.

Commonality #3. Private Mortgage Lenders: Canada - Interest rate is usually higher than a traditional mortgage. Loans given by private mortgage lenders are typically referred to as hard money loans.

Written By
Tony Dhami
Verico Designer Mortgages Inc
www.hamiltonmortgagebrokers.ca
www.topnegotiator.ca

You work hard, you make good money, you have a good credit history, you're independent, you're successful but you're self employed and you can't get a mortgage from the major banks. Right? Wrong?
Over 20% of Canadian income earners are self employed, business for self or are 100% commissioned. With this large of a segment of the population working for themselves you would think the mortgage banks in Canada would take notice. Well they have!

Finally.

Most people in business write off expenses before declaring income. That's the advantage of being in business for yourself. You pay income tax on a lesser amount but when you need to prove income for a mortgage approval, your tax returns make it look like your income is low and you can't afford the mortgage you deserve.
Qualifying for a Low Documentation Mortgage (Low Doc or No Doc or Alt Doc) is easier than you think. You can purchase a new property or re-finance your existing home up to 90% of its appraised value. The lender bases their mortgage approval on your good credit history instead of your net income.
Requirements for an alternative low document mortgage:
• A clean credit history without slow payments, collections, judgements or bankruptcies
• Proof of self employed status for the last 2 to 3 years through Incorporation papers, GST returns or business registration papers
• Property must be located near a major urban centre
• The last 3 years Notice of Assessment (NOA) from Canada Revenue Agency to prove no tax owing
• If your credit score is low you may be required to provide the last 12 months of bank statements to show regular deposits to prove your 'stated income'
No Income Mortgage? You want to purchase a property or refinance your existing home but you have no income. We can get you a mortgage approval for up to 75% of the property's appraised value with little or no income and less than perfect credit.
We regularly deal with equity mortgage lenders and non-conforming mortgage lenders. We will take the time to work with unique situations and tough deals.

HAMILTON'S PRIVATE MORTGAGE SPECIAL REPORT
• Do you need an 'unconventional' mortgage for a residential or mixed use property?
• Are you purchasing a 'nonconforming' property and have been told it can't be financed?
• Have you been turned down by a bank, or several banks, due to any number of reasons?
• Do you need financing fast and you can't wait for the bank to make up their mind?
• Are you being treated badly because you have bad credit, unverifiable income or you want to buy a unique property
• Do you just need someone to believe in you for a year or two while you get back on your feet and become 'bankable' again?

If you answered yes to one or more of these questions then...
Maybe a private mortgage is for you!
Private mortgages are funded by individuals or groups who want to make a better return on their investment than 2% in a GIC at their bank. They are comfortable with investments that are secured by real estate and they will look past bad credit, bankruptcy, and environmental or zoning issues. Basically they invest in people and property and not reports and numbers.
Some private mortgage investors only invest in residential housing, some will look at commercial plazas. Every investor is different and that's why you need a mortgage broker. They each have their own appetite and lending comfort zone. Private mortgage investors will even look at farm mortgages, mobile home mortgages, a variety store mortgage, a mortgage for a cottage or vacation property, or even a mortgage on bare land.
One thing is for sure, they will listen to your story and make a decision based on all of the information. Canadian private mortgage investors look at things like bank statements, recent appraisals, employment letters, whatever you can provide to show them why you, and your property are a good investment.
Sometimes, god forbid, they will even want to meet with you, see your property, and hear the story in person. When is the last time that a bank wanted to hear the whole story?
Some rough guidelines and facts:
• Rates - typically higher than bank posted rate although not always.
• Term - 1 to 3 years, longer if there is a valid reason.
• Payments - interest only and amortized payments are possible.
• Fees - depends entirely on the package - usually 1 to 3%
• Region - typically they invest in their own area but not always.
• Approval - approvals can take 1 day to 2 weeks depending on the deal.
• Funding - funding can happen in less then a week but generally in 3 weeks.
To get access to private lenders and mortgage investors you generally need to deal with a Private Mortgage Broker and that's where we come in. We'll take a look at the entire application, including the back story, package it as an investment and present it to the most appropriate private mortgage lender in Ontario for approval

Written By Tony Dhami
Verico Designer Mortgage

Every day more people are bypassing the traditional lending routes and turning to private lenders to finance their investments. It’s true, traditional government regulated lending typically offers lower interest rate (though the difference is negligible) the benefits of private lending often far outweigh the difference.

Traditional, government regulated, lending requires borrowers to meet minimum income requirements. Private lenders are not interested in your income; they’re interested in the return on investment. When you demonstrate the soundness of your investment, private lenders are happy to get you the money you need.

Likewise, private lenders are not interested in reporting your loan to the credit bureaus which means your credit rating is not affected by borrowing money from private lenders. This means you can invest in as many opportunities as you desire without a negative impact on your credit rating.

Most often, people borrow money from private lenders because they see the value of investing in real estate properties. With a traditional lender there are minimum property value requirements which must be met in order to borrow money for the down payment. This is not the case with private lenders. Regardless of the value of the property upon initial investment, the bottom line is a private investor’s primary concern is the return on their investment. This gives you, the borrower, the freedom to decide which properties make the most financial sense for you.

Along the same vein, private lenders do not require the property to meet minimum age requirements. This is important to borrowers interested in flipping a real estate property. The older homes, those in need of the most work, are typically the homes which provide the highest return on investment. Not having minimum age requirements frees a borrower to find those fantastic fixer uppers and make a ton of money.

Traditional lenders also have employment restrictions, down payment minimums to meet, and even have rigid guidelines when it comes to calculating monthly payments. Private lenders are willing to be creative when it comes to creating a lending package which works for you. This means down payments can be negotiated, or even eliminated. Payments and terms can be negotiated.

So the absence of rigid restrictions is clearly a huge benefit to borrowing from private lenders however the freedom to work with a lender to create a deal which works for you is clearly leaps and bounds above what you receive when dealing with a traditional lender.

The final benefit, and perhaps the one which makes the most difference to many investors, is the turn around time. Private lenders do not have the time consuming bureaucracy which stalls the lending process and can turn a simple transaction into a process which takes months. When you borrow money for a real estate investment, or any other investment, timing is critical. Private lending is fast. You get the money when you need it without the red tape and restrictions.

For more information on how to invest in real estate, even if you don’t have a ton of ready cash at your finger tips
Please contact us at
www.hamiltonmortgagebrokers.ca
www.topnegotiator.ca