Our blog

Do you have massive student debt you need to return? Perhaps you have mounting credit card bills that you’re finding impossible to pay back. For anyone considering paying off significant expenses with loans, you’re in luck. There are other options out there with better consequences on your financial history. One of the most viable options for those with high debt is taking out a second home mortgage.

What is a second mortgage, you may be asking? Well, in this article, we walk you through everything you need to know to determine if this option is the right one for you. Keep reading for more.

What is a second home mortgage?

A second mortgage is a collateral home loan. It is typically taken out by homeowners who have built up equity on their first property but have not yet fully paid off the first mortgage. Thus, by borrowing against the equity of the first property, homeowners can get significant advantages - all without refinancing the existing mortgage! The line of credit is called a ‘second’ mortgage because the loan is taken out on a lien on the property.

This mortgage is also known as a home equity line of credit or HELOC. 

How is a second mortgage used?

The great thing about a second mortgage is that it can be used in several different ways.

It is often used for debt alleviation purposes, such as paying off debts, loans, credit cards, outstanding bills and more. But it can also be used to cover more considerable day-to-day expenses. Homeowners can use a second mortgage to buy another property, fund their home renovation, pad up a college or education fund and pay off other expenses. You can also use it to invest in your business, cover wedding expenses or buy a car!

It can even be used to get some cash on hand or stop a power of sale. Thus, if you’re considering getting a second mortgage, it will likely come in handy no matter your needs or goals. And if you’re looking to cut your monthly payments by up to 50%, be sure to reach out to a reputable lender like Canadalend.com.

How to qualify for a second mortgage?

The criteria to qualify will likely determine if a second home mortgage is the right move for you. As with other loans, lenders will look at various factors to ensure you’ll pay back the payments consistently and promptly. They will also want to ensure you’re not too much of a risk. They evaluate all this by using three main criteria:

1. Credit score: You will need a decent credit score to qualify for a second home mortgage. Most lenders will ask for a score upwards of 680, although some private lenders offer options for those with poor credit history. Just remember - the higher your credit score, the less interest you pay. Check out this handy guide on things you didn’t know were affecting your credit score (so you can bump it up in the future)!

2. Equity: Lenders will see if your property will have enough equity left after the second mortgage is taken out. This will ensure an average loan-to-value ratio which is essential to reduce the risk level if interest rates drastically increase or your income drops. Try to ensure you have a minimum of 20% equity remaining in your home after borrowing against it.

3. Income: You will need to demonstrate proof of income coming in each month consistently. This one is important, as it helps lenders understand that you have the money to make your loan payments on time and in full. For this, they will look at your finances and bank statements to determine your payment capacity.

Being able to meet these criteria increases the chances of getting approved for your second mortgage. If you find yourself struggling to take out a mortgage with traditional banking and financial institutions, check out alternative flexible lenders who will help you instead.

What are the benefits of taking out a second mortgage?

To make your decision, you’ll need to consider what’s in it for you. There are some obvious advantages to taking out a second mortgage. A significant benefit is that second mortgages can be more affordable than other loan types, often with lower interest rates. In addition, you’ll get access to money which can be a huge help. You’ll also be able to borrow more money than with a personal loan - sometimes up to 80% of the value of your home! This can be highly beneficial if you’re attempting to alleviate your debt or planning to incur heavy personal expenses or costs.

A second home mortgage is an excellent option if you have substantial equity built up in your property. You can use that existing capital to borrow additional funds. Whether it’s for a college fund or that renovation you’ve been eyeing up for a while, a second mortgage can be an excellent solution for every kind of homeowner. If you find yourself confused about how to take out a second mortgage, don’t worry. 

Our team of friendly mortgage professionals has years of experience guiding homeowners like yourself through a successful second mortgage. Be sure to reach out with any questions, queries or doubts so you can get started on the process today.

For more information on a second home mortgage, call Canadalend at 1-866-422-6536 or contact us here.

Refinancing your mortgage is a smart financial move. You’ll be able to access the built-up equity in your home, pay back debt, and make major renovations and changes to your property. What’s the most important advantage? Lower interest rates!

If you’re a homeowner looking to benefit from any of these features, then take advantage of the low interest rates created due to the pandemic. However, is it the right move to do a mortgage refinance in Ontario? While this will depend on your personal financial goals and obligations, refinancing is typically a good solution for most homeowners.

Read on to learn about the benefits of refinancing your mortgage.

1.Historically Low Interest Rates

As mentioned, the COVID-19 pandemic has created an environment of historically low levels of interest. Thus, if you take advantage of this dip, you’ll be able to reduce your overall interest rate and lower your monthly mortgage payments.

If you’re unsure how much of a difference low interest rates are, then let’s look at the math. If you have 20 years left of your mortgage amortization period, then here is the total interest you’ll pay with different rates:

• 3.19% interest will result in $141,590 put towards interest

• 2.29% interest will result in $98,942 put towards interest

• 1.39% interest will result in $58,402 put towards interest

As you can see, what you pay in interest can significantly differ according to your interest rate. This proves the benefits of lower interest rates when refinancing your mortgage.

2.Lower Monthly Payments

Your low mortgage rate will allow you to reduce your monthly payments, which will, in turn, benefit your bottom line. You can do this by extending your loan term, thus spreading your payments over a more extended period. With less going out every month, you’ll also have extra income to use towards debt consolidation or however you please. The low monthly payments will be necessary for those on a tight budget looking for financial breathing room.

3.Access Equity

One of the most significant advantages of refinancing your mortgage is the access you’ll be granted to equity. Home equity is your property’s value minus the mortgage balance left to pay. Homeowners can access this home equity for use in many different ways.

For example, paying for education, purchasing a secondary property, and debt consolidation are great ways to use your built-in equity. You’ll be able to access up to 80% of your home’s equity. This can be done by increasing your monthly mortgage payments or using a mortgage calculator to understand how much equity will be available to you.

4.Debt Consolidation

By accessing the built-in equity of your property, you’ll be able to manage any high-interest debts that have piled up over the years. This can help you consolidate or reduce your debts. Homeowners with excessive debt may risk defaulting on payments, missing payments, or compromising their financial history and credit score.

This can be detrimental to your financial future, so it is better to consolidate through refinancing. You can do this by “cashing out” when refinancing. In other words, you can replace your primary mortgage with a new larger mortgage. The difference can be chased out, but up to 80%–85%. That can yield significant results and help you take out a loan or reduce your debt. In addition, the interest rate you pay on the money you owe will also subsequently come down.

5.Finance Major Life Expenses

Using the same principle as debt consolidation, you can use your equity for other significant life changes. Many Canadian homeowners will use their equity to finance other aspects of their life, such as investments, their children’s education, and more. By renovating or updating your property, you will also increase its value, which can come in extremely handy down the line. Many homeowners are working remotely right now, so making home improvements such as a property extension or setting up an office will be very helpful.

In addition, opting for a mortgage refinance in Ontario will provide you with a much lower rate of interest than a personal line of credit or a credit card. Using this method means you’ll be able to save money in the long run and build your credit history back up slowly.

6.Gain Stability

When you opt for a mortgage refinance in Ontario, you will also benefit from financial stability. Once you decide to go ahead with the mortgage terms, you’ll be locking in your mortgage interest rate for five years. That’s a long time to go with a guaranteed rate of interest that is comparatively lower! You will stay secure with your finances and can put away cash for emergencies or other pressing needs.

For many homeowners, their mortgage remains set in stone. They make the payments according to the terms and soon forget about it. However, refinancing your mortgage is a great way to get a better deal, and you don’t need to wait until your next renewal to do it.

As you can see, refinancing your home comes with significant benefits! You’ll be able to consolidate debt, access equity, make renovations, and so much more. If you’re looking for a reputable and reliable mortgage broker to guide you through the refinancing process, be sure to reach out to Canadalend.com. We offer the most competitive rates, with specialized industry knowledge from friendly and dedicated staff. You can also increase cash flow and save money!

For more information on getting a mortgage refinance in Ontario, call Canadalend at 1-866-422-6536 or contact us here.

Are you a business owner looking for the perfect property for your business? A commercial mortgage is your best bet to acquire a great space. Taking out a commercial mortgage is the best way to lay your claims on real estate, using a loan on the property, which acts as collateral.

This mortgage is typically reserved for borrowers who are business or company owners, as opposed to individuals who are in an incorporated or a limited company. Thus, this loan will work best for companies of a particular type and differs quite significantly from residential mortgages.

Read on to learn more about a commercial mortgage.

What exactly is a commercial mortgage?

This type of mortgage is taken out by businesses and investors that wish to produce income or work out of the purchased commercial property. It can also be refinanced.

Certain types of properties will qualify as commercial mortgage properties. This depends entirely on the kind of business undertaken in the space. Typical commercial properties are retail, industrial/factory, or office spaces. In addition, specific residential properties will also qualify as commercial property. For example, a residential property with one to four units is a zone with a dual residential and retail space. A purely residential property with five or more units will also be considered for this mortgage type.

Commercial mortgages in Canada usually fall within the range of $500,000 to $2 million.

How long does it take to acquire a commercial mortgage?

Expect a much longer closing time for commercial mortgages compared to residential ones. While residential mortgages typically close within a couple of weeks to 90 days, commercial properties are closed within two months to a year.

Do you need a commercial mortgage?

Commercial mortgages are perfect for certain kinds of buyers. For example, real estate investors are ideal for this loan, as the property is legally recognized as an investment. Thus, if you are a real estate investor or business owner, this mortgage type is ideal. The amount of money you’ll be able to borrow will depend on the type of property you choose, for example, whether it is a construction project, farmland, etc.

How can I qualify for a commercial mortgage?

When deciding if this mortgage is right for your business needs, you must figure out the qualification criteria. The qualifications needed for a commercial mortgage are typically more strict than a residential mortgage. This is because lenders want to ensure that you will meet your financial obligations down the line. Let’s take a look at the main requirements.

1. Cash availability: Lenders will need proof that your business has enough cash flow to warrant taking out a mortgage. You will need to prove that you will be able to make the monthly payments. In addition, most lenders will ask you to invest some money to equalize the loan-to-value ratio.

2. Excellent credit: Having a great credit score is an absolute must. As the business owner, you will need to demonstrate a perfect personal credit score. Thus, your personal financial history matters as much as your business’s economic history. While it is possible to take out a mortgage with a lower credit score, remember that this comes with increased interest rates.

3. Business status: If your company has been operating fully for some time, your lender will want to verify your financials. They will check if your business appears stable and is generating a steady and consistent profit. However, not all your financials need to be liquid; they can also be in the form of stocks and bonds.

4. Contribution: You will need to put forward a higher down payment, which is typically around 50%. This can seem excessive when residential property down payments generally are 20% to 30%. However, remember that there is a higher risk associated with commercial properties.

If you’re worried about the loan-to-value ratio, remember that it differs according to the property too. Depending on the property, you can expect the balance to be anywhere from 55% to 80%, with farmland at the lowest and storefronts at the highest loan-to-value ratio. Thus, if you have the means to manage the rates, your business would be a great candidate for a commercial mortgage.

How can I get help for my commercial mortgage?

To get started on obtaining the loan, you will need the assistance of a reputable and trusted commercial mortgage broker. Your broker will be your main point of contact for the whole process and guide you through it with ease. They will explain everything involved, do the majority of the legwork, and help you find the best terms and rates. Going with a broker can also speed up the process significantly.

An important point to note is that mortgage brokers do not earn commissions for commercial mortgages. Instead, their services are paid for directly by you, the borrower. However, enlisting the help of a mortgage broker will save you thousands of dollars in the long run, so it is well worth the service fees.

Taking out a commercial property can be challenging to navigate. There is a lot of information, and deciding on the best rates and terms can be difficult. To ease your way through the process, enlist the help of an experienced commercial mortgage broker. Our team at Canadalend.com has years of experience helping businesses find affordable mortgages so they can achieve their goals.

For more information on taking out a commercial mortgage, call

Are you looking to get a second mortgage? If you have bad credit, then perhaps you’re concerned about the process.

However, there are some steps you can take to improve your chances of being approved! And the best thing about applying for a second mortgage is that it can also help improve your credit score.

If you’re looking to get a second mortgage in Ontario, then read on.

What is a second mortgage?

A second mortgage in Ontario is a means to borrow money based on the equity you’ve already built up on your primary home or mortgage. This type of mortgage is also referred to as a home equity loan.

The advantage to a second mortgage is that it relies entirely on your home equity, which you have taken the time and effort to build up. Larger financial institutions and banks do not typically offer a second mortgage, unlike a Home Equity Line of Credit (HELOC). This type of loan has a very low rate of interest, but is approved sparingly. This is because the Government of Canada places heavy regulations on eligibility and approval criteria for this loan.

Second mortgages, on the other hand, are quickly approved. However, approval does depend on how much equity you’ve built up; therefore, the more equity, the easier it is to get approved! Second mortgages also come with a higher interest rate than a HELOC. Despite this, the benefits of a second mortgage include:

Thus, a second mortgage is a viable option for any kind of buyer in Ontario. It is also particularly beneficial for those who are unable to qualify for a HELOC.

Is it possible to qualify for a second mortgage with bad credit?

The short answer is yes! You can qualify for a second mortgage with bad credit, but let’s start with the basics. Don’t assume that you’ll be denied funding right off the bat, and consider all the kinds of financing options you have available to you.

It may seem daunting to face rejection at the big banks, but the upside is that many alternative mortgage lenders specialize in helping those with bad credit. Traditional banking institutions have enforced stricter lending rules, which makes it extremely challenging to secure financing. Instead, apply with non-traditional lenders who will assess your unique financial situation and help you qualify.

Go With an Alternative Lender

Non-traditional lenders have fewer restrictions and less challenging applications. They are also governed by fewer requirements, which works in your favour if you have poor credit.

A lender like Canadalend.com, for example, helps homeowners get the best terms and rates. They will work with your built-up equity and guide you through the process of applying. Many alternative lenders will offer a better rate if your credit rating isn’t as bad as you initially assumed.

The Key to a Second Mortgage Is Home Equity

Our team at Canadalend has found that it is essential to focus on your home equity rather than your credit score. Calculate your home equity correctly because that is the critical factor for getting approved! Lenders will be much more open to financing your claim because there is less risk involved in the venture. The more equity you’re able to prove, the better rate you’ll get. And remember: you don’t need to borrow against all the equity you have. Leave some of the equity unfinanced so that you don’t need to mortgage your property to the fullest.

You Can Qualify for a Second Mortgage Without Income

Another benefit of taking out a second mortgage is that lenders rarely consider your income from work. As the focus is entirely on the built equity, it doesn’t matter whether you’re currently working or not. Thus, individuals who are laid off or have lost their job can also qualify.

This can come in handy if you don’t have income coming in every month. If you have adequate equity on your first property, then lenders may offer to prepay your second mortgage for a period or help you arrange an interest-only loan. This can significantly impact the amount you pay each year, with the added option of making the payments at your leisure.

Choose Canadalend.com for Your Second Mortgage Today!

We have years of experience in helping individuals in different situations get financing. We understand the importance of personalizing our services to your unique financial needs. We have the best rates available and friendly and dedicated staff who will provide you with various lending options. This will help you secure financing for a secondary property more efficiently, irrespective of your credit score.

For more information on second mortgages in Ontario, call Canadalend at 1-866-422-6536 or contact us here.