Mortgage Basics: Types of lenders

You have many choices when it comes time to get your mortgage.

Not only do the different types, terms, and options for the mortgage vary, but you also have options when it comes to choosing the lender for your home loan. It’s important that your lender offers you a competitive rate, but there are other things to take into consideration, such as flexibility, customer service, and the fact that not all lenders offer all types of mortgages.
 
Banks
 
The biggest players in the mortgage market by far are the commercial banks. Big banks provide the majority of home loans to consumers. The general public knows and recognizes their brands, and there’s also some brand loyalty for consumers who already make use of the bank’s other financial products. These…

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Owner Financing - What you need to know

5 Reasons to Offer Owner Financing

It seems a bit counter intuitive for someone who owns home to allow a buyer to pay over time for their property. After all, wouldn’t it be better to get all the money in one go thereby requiring the buyer to get financing from a bank? Well, sometimes it’s more lucrative for the seller to offer financing and here’s why:

1. Better Selling Price

In a buyer’s market, it can take a while for a property to sell, and once a home has been on the market for longer than 60 days,  real estate agents often encourage the seller to drop the price. To attract more interest, they make sure that all the marketing materials, including the For Sale sign, clearly show that the price has been reduced. However, instead of cutting the…

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Assuming A Kamloops Mortgage - How does it work and is it for you?

An assumable mortgage is, simply put, one that the lender will allow another borrower to take over or “assume” without changing any of the terms of the mortgage.

For example, say you purchased a property for $200,000 with a mortgage of $150,000 and $50,000 of your own money. If part way through the mortgage term you decide you’d like to sell the home, you would have the option of essentially selling the mortgage as well. The person who buys the home from you could take over the balance of the mortgage and the associated payments and give you cash for the remainder of the value of the home. So, if your mortgage balance is now $140,000 and the home is now valued at $210,000, a buyer who is assuming the mortgage would need to pay you, the seller,…

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Which mortgage term will save you money over the next five years?

A significant “negative shock” to the economy: That’s what it’s going to take to lower interest rates again, says Canada’s most powerful banker.

And Bank of Canada head Stephen Poloz isn’t betting on that happening any time soon. Neither are bond traders, the big guns that bet billions of dollars every day on the direction of interest rates.

So let’s suppose – just for fun – that they’re right (since we all know how often markets and economists aren’t right). If we are actually near a bottom in rates for a few years, what’s the best way to play your mortgage?

Well, it just so happens that there’s an app for that. It’s called a spreadsheet and I’ve taken the liberty of putting mine through its paces and model out which mortgage term (or…

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Which mortgage term will save you money over the next five years?

A significant “negative shock” to the economy:

That’s what it’s going to take to lower interest rates again, says Canada’s most powerful banker.

And Bank of Canada head Stephen Poloz isn’t betting on that happening any time soon. Neither are bond traders, the big guns that bet billions of dollars every day on the direction of interest rates.

So let’s suppose – just for fun – that they’re right (since we all know how often markets and economists aren’t right). If we are actually near a bottom in rates for a few years, what’s the best way to play your mortgage?

Well, it just so happens that there’s an app for that. It’s called a spreadsheet and I’ve taken the liberty of putting mine through its paces and model out which mortgage term (or…

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3 Tips to Select a Mortgage Lender

The process for selecting real estate agents and mortgage lenders is often similar, with the main difference being your search will turn up several non-local lenders that may be a good fit for your particular lending needs. Whatever your methodology is, these tips to select a mortgage lender can make the process seem less scary and non-evasive.

It is critical that you have a local real estate agent who knows street-level and regional pricing dynamics in your target neighborhoods intimately. But since mortgage lenders can lend anywhere and mortgage rates and fees are generally the same nationally, non-local lenders claim they can handle your transaction as well as local lenders.

To examine which lender will work best for you, look at 3 of the ways…

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Top 5 Reasons A Mortgage Is Denied After Pre-Approval

Reasons A Mortgage Is Denied After Pre-Approval

One of the most important steps to successfully purchase a home is to get pre-approved for a mortgage before shopping for homes.  The primary reason to get pre-approved for a mortgage before shopping for homes is to ensure you’re looking at homes that are within the price range that you can afford.

Even though a buyer will get pre-approved for a mortgage before shopping for homes doesn’t mean there is a guarantee they will successfully obtain the financing.  Certainly the hope is the if a lender pre-approves a buyer that the buyer will successfully obtain the financing, however, it’s possible a mortgage can get denied even after pre-approval.

A mortgage that gets denied is one of the most common…

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Fixed or floating? The great mortgage debate of our time

Fixed or floating?

For those taking on a mortgage or renewing one, it’s a question that can be complicated.

On one hand, interest rates are at historic lows. The Bank of Canada’s benchmark overnight lending rate is at 0.5 per cent. To some borrowers, this might suggest it’s a good time to lock in at a low rate for a long time.

On the other hand, to the surprise of almost no one, the bank suggested that it anticipates no changes. “The near-term outlook remains broadly the same as it did in January,” it said in its most recent rate-setting statement, on March 9. That suggests a floating rate might make sense. The issue becomes more complicated, though, because borrowers likely won’t find much advantage.Compared with times when interest rates were…

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Fixed or floating? The great mortgage debate of our time...

For those taking on a mortgage or renewing one, it’s a question that can be complicated.

On one hand, interest rates are at historic lows. The Bank of Canada’s benchmark overnight lending rate is at 0.5 per cent. To some borrowers, this might suggest it’s a good time to lock in at a low rate for a long time.

On the other hand, to the surprise of almost no one, the bank suggested that it anticipates no changes. “The near-term outlook remains broadly the same as it did in January,” it said in its most recent rate-setting statement, on March 9. That suggests a floating rate might make sense.

See our BLOG article on interest rates HERE

The issue becomes more complicated, though, because borrowers likely won’t find much advantage.

Compared with…

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Three ways to pay off your mortgage faster

Things like traffic, work and dirty dishes can seem to go on forever; your mortgage doesn’t have to.

Even if you have signed on for a long mortgage, with payments scheduled to continue until you’re old, there are ways to speed everything up, experts say.

It’s a matter of knowing your options and paying attention to detail.

“Obviously there’s budgeting, where you cut back on some of your spending,” says April Dunn, a mortgage broker at Red Door Mortgage Group in Kelowna, B.C.

“But that only works if you actually take the funds to pay down the mortgage.” If you can’t bear to give up that triple skinny latte with an extra shot and some foam, “there are other things you can do.”

Some of these may seem simple but knowing more lets you make the…

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