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If you’re considering buying a second home in Ontario, you’re not alone. A recent survey concluded that more than 10% of Canadians have purchased a second home.

Participating in this growing trend is usually complicated if you don’t know the rules for second mortgages in Ontario. The good news is that you should consider only five main things before purchasing a second home.

In this post, we’ll explain these factors to help you make an informed purchase before choosing a lender.

1. Will You Use Your Primary Home’s Equity

Unless you have a high net worth, raising the capital to buy a second home will require a great deal of financial maneuvering. One way to raise the cash to buy a second home is by accessing the equity in your primary residence.

Suppose you plan on using your existing home equity to finance a second home. In that case, you should know that this process will involve a cash-out refinancing of your current home mortgage. Ultimately, you will have to take out a higher borrowed amount than before.

The upside of using your home equity to fund a second home is that you can bypass spending several years saving up toward the purchase. Also, depending on how much equity you have in your primary home, you can present a suitable financial profile to your lender to increase your chances of approval.

Make sure to speak to a mortgage professional to see if this choice is best for you.

2. Understand What Counts as a Second Home

Not every additional residential purchase counts as a “second home.” Typically, a second home refers to an owner-occupied property, at least for some time during the year. As a result, a second home could be a:

• Winter cottage for family get-togethers
• Summer vacation home
• Condo for long commutes to work
• An apartment complex that the owner lives in and rents to tenants

If you’re considering buying a second home in Ontario, your lender will mainly be concerned with whether or not you occupy the property. Lenders will classify it as an investment property if you don’t plan on living at the residence.

Some smaller lenders don’t provide mortgage loans for investment properties. Therefore, you should make this distinction early on before calling a mortgage lender.

3. Know the Rules

If you own a home, chances are you’re already familiar with the qualifying criteria for securing a home loan. This familiarity is because the requirements for owning a second or third home are similar to buying your primary residence.

These requirements are:

• You must qualify for a mortgage loan under the stress test
• You’ll need a good credit score for the lowest mortgage rates
• Borrowers must have an acceptable debt-to-income ratio with their lender

There is one difference you should be aware of, and that is the down payment. When you buy a primary residence, your down payment is tied into the total purchase price. However, buying an additional property means the following can affect your down payment amount:

• The size of the property
• The number of units the property has
• Whether or not the owner plans to live there

As you can see, the criteria for qualifying for a second home aren’t much different from your original purchase.

4. How Do You Plan to Finance

We’ve already covered that you can use the equity in your primary residence to fund the purchase of a second home. There is good news if you don’t have much home equity or want to assess other alternatives.

Buying a second home in Ontario can qualify you for the Insured Second Home Mortgage Program. Many Canadian homeowners enroll in this program and pay as little as 5% down for a property occupied by a family member going to college.

This program is also a popular alternative for purchasing a vacation home. Before enrolling in the Insured Second Home Mortgage Program, here are some things to keep in mind:

• The borrower must live in the property for some part of the year, or a family member can occupy the home. Under the guidelines of this program, you can’t charge a relative rent for occupying your home.
• The property you purchase must be accessible all year round. This factor means you’re responsible for winterizing your home and performing routine maintenance.
• Your second home must be located in Canada. You can’t use this program to buy timeshares or similar real estate.

5. Can You Afford a Second Home?

Understanding the rules of buying a second home in Ontario is very straightforward. Before any of that can matter, you must decide whether or not you can even afford the purchase.

A mortgage lender will evaluate your financial profile unless you have the funds to buy a second home outright. They will deeply examine your income, credit score, gross debt service (GDS) ratio, and total debt service (TDS) ratio.

Suppose you plan on buying a second home to add to your investment portfolio. In that case, your lender may count that anticipated revenue toward your gross income. This facet can substantially increase the amount you can borrow from a mortgage lender.

The most crucial aspect of affording a second home is the interest rate. An exorbitant interest rate could leave you stuck paying for a second home many years after you finish your first mortgage.

Ready to Take Out a Second Mortgage?

Buying a second home in Ontario is possible if your finances are in order and you agree to the purchase rules. Finding the right lender is crucial if you’re strongly considering making this choice.

At Canadalend.com, we help our customers thoroughly assess their options to take advantage of the most competitive mortgage rates. To learn more about our second mortgage and financing options, call Canadalend.com at 1-866-I CAN LEND or contact us here.

Finding the right property is one of the most essential steps in running a new business. If you’re like most business owners, the most straightforward route to securing a property is taking out a commercial mortgage.

The problem with this approach is that not all lenders are willing to extend a mortgage on your terms. For this reason, many business owners work with commercial mortgage brokers in Toronto.

A commercial mortgage broker is the “middleman,” which connects you (the borrower) to the right lender. In this post, we’ll explain how you can find the best commercial mortgage broker that meets your standards.

Research Your Options

All commercial mortgage brokers in Toronto have different clientele they work with. Some mortgage brokers deal in certain areas in Toronto. Others may prefer to work with borrowers with good credit and suitable collateral.

For this reason, you should do your research to find a Toronto commercial mortgage broker that works with people like you. Here are some helpful tips to help you get started:

• Visit a Mortgage Broker’s Website and Check Their About page. This page is where you’ll usually see information about the customers they work with.

• Use Google Maps. This helpful tool will display some local commercial mortgage brokers in your area.

• Check the Better Business Bureau (BBB). This online resource helps consumers filter through legitimate businesses and fraudulent establishments with horrible reviews.

Once you follow these tips, you can create a shortlist full of possible commercial mortgage brokers to contact.

Consider a Broker’s Relationships with Different Lenders

Successful commercial mortgage brokers in Toronto work with a wide range of lenders. This range ensures their customers have plenty of quality options when securing a favourable mortgage loan.

When meeting with a prospective commercial mortgage broker, ask them to give you a full rundown of the lenders they work with. A quality mortgage broker will have connections with prominent and local lenders to provide you with a broader list of options.

Always Collect and Verify References

A significant aspect of working with any business is ensuring they are who they claim to be. When contacting a prospective mortgage broker, ask for at least three professional references to elevate your peace of mind.

However, your job doesn’t just stop there. In addition to collecting references, you should also verify each contact by sending an email or calling a past customer on the phone. Verifying references generally takes less than an hour, which can ease your mind by knowing you’re working with a legitimate business.

Make Sure They Understand Your Target Area

The job of a commercial mortgage broker isn’t just to connect you with the right lender. Great commercial mortgage brokers in Toronto will research and understand the area you want to buy in. They’ll have a firm grasp of average sales prices, interest rates, and regional crime rates. When meeting a mortgage broker, look for a professional that does their due diligence.

Ask Plenty of Questions

Whether you speak to a representative over the phone or meet a mortgage broker in person, asking vital questions will help you determine the best fit. Here are some questions you can ask:

• How long have you been working in this region?
• How many clients have you helped secure a commercial mortgage?
• What are your fees? Are you going to bill me or my lender?
• Are there any other fees that I should know about?
• What other services do you offer?
• What do I need to provide to get started?

Asking these questions and recording their answers will help you compare each broker on your shortlist.

Meet the Broker in Person

Don’t underestimate the importance of an in-person meeting. Meeting a commercial mortgage broker in person gives you the opportunity to:

• Ask follow-up questions that you forgot about comparing different brokers.
• Get a great idea of what it’ll be like to work with them.
• Ask about the additional services you may need in the future.
• See how attentive the mortgage broker is to your concerns.

The best commercial mortgage brokers in Toronto are friendly and transparent. They won’t upsell you on other services to make a profit and will be honest about the lending process.

Determine Your Priorities

Before selecting a broker, deciding what matters most to you during your lending experience is always a great idea. If you want to pay the lowest rates possible, talk to a mortgage broker with a proven track record of securing the best deals for their customers.

If you’re a first-time buyer who requires a more hands-on approach during the lending process, find a friendly broker to accommodate you.

Finally, if you prefer to get through the lending process as soon as possible, choose an efficient broker known for expedited service.

Monitor Their Reputation

The final step in choosing an excellent commercial mortgage broker is gauging their online reputation. Mainly, what do their online reviews look like? Have you had any dissatisfied customers on Google Maps and other review websites?

Does the mortgage broker have an excellent reputation on social media platforms like Facebook and LinkedIn? It would help to answer these questions when monitoring a broker’s online reputation. A mortgage broker with a dirty online reputation on social media and review websites isn’t a provider you want to do business with.

Ready to Start a Commercial Mortgage?

As you can see, choosing one of the best commercial mortgage brokers in Toronto doesn’t have to be a complex process.

Performing your due diligence, asking essential questions, and scheduling an in-person meeting are some of the best ways to vet quality brokers. If you’re ready to discuss starting a new commercial mortgage, the friendly team at Canadalend.com is here for you.

To learn more about our commercial mortgage solutions and financing options, call Canadalend.com at 1-866-I CAN LEND or contact us here.

A home equity loan is a type of loan that enables homeowners to borrow money using the equity they have already built up in their property, or in other words, through using their home as collateral.

While these loans are often used to fund home renovations and repairs, there are actually a number of other purposes that home equity loans can be used for to help Ontarians breathe a little easier, financially speaking.

From consolidating debts to financing new business ventures and investing in your continued education, a home equity loan can be a truly valuable tool to bring you closer to achieving your goals, without the added financial stress of interest charges or the hassle of other common types of loans.

In this article, we will go over the six common alternative uses for home equity loans beyond the usual home renovations, improvements, and repairs.

The Common Alternative Uses for Home Equity Loans:

1. Consolidating your debt

In Canada, home equity loans are most commonly used for the purpose of consolidating one's debt. This is because accessing home equity to borrow money comes with considerably lower interest rates when compared to other loan types, such as personal loans or credit cards.

Through tapping into home equity for debt consolidation, Canadian homeowners are able to cut costs on interest charges, as well, and can cut down on their monthly bill cycle.

2. Paying off your CRA tax debt

Owing a lot of tax debt to the Canada Revenue Agency (CRA) is never a fun position to be in. Fortunately, in many cases where homeowners owe a considerable amount of tax money to the CRA, a home equity loan can be used as a short-term loan to pay back these taxes and get out of the debt.

However, note that this will only be feasible in cases where there is enough room to pay off the CRA debt or when the amount of debt is not too large.

3. Starting a new business

A lot of capital is needed when you are starting a new business. Fortunately, tapping into existing home equity will allow many homeowners who want to embark on a new entrepreneurial journey to access these critical funds with much more ease than with other common loan types.

Moreover, these home equity funds can even be used to pay for a business loan.

4. Financing post-secondary or private education

In Ontario, post-secondary education programs or private schools can be very costly, and setting aside money for tuition is easier said than done for many homeowners.

This is why people who are considering personally returning to school for advanced education, or alternatively, who need to pay for their child's post-secondary education, can feel good about using a home equity loan for this purpose.

5. Covering a spousal buyout following a divorce

If you happen to be going through the process of concluding a marriage, then a spousal buyout may be a necessary course of action. This is generally applicable in cases where both spouses are not in agreement to sell the house and one spouse is unable to obtain another place of shelter.

In such difficult situations, a home equity loan can be used as a way to cover the costs of "sending off" a spouse. In fact, this is not an uncommon financial route.

6. Paying for unexpected emergencies

As the well-known saying goes, "When it rains, it pours." Canadian homeowners with equity built up in their homes should feel secure in case an unfavourable (and costly) event ever presents itself.

Last, but certainly not least, home equity loans are also often used to help cover unexpected expenses resulting from any type of emergency, such as a dental or medical emergency, an auto repair emergency, or other types of unfortunate incidents.

Access Your Home Equity Loan With Canadalend

Fortunately for homeowners in Canada, Canadalend.com can provide a high standard of service and more financing options compared to large banks. Since our professional team consists only of independent licensed mortgage experts, we also have access to hundreds of different reputable lenders, many of which are non-traditional or regulated on a federal or provincial level.

With that being said, if you are a Canadian homeowner looking to take out a home equity loan for any reason, whether that be to fund a home renovation or any of the above purposes and beyond, then a home equity loan broker on our team would be happy to meet with you. We will provide you with a thorough evaluation and go over all your options to ultimately help you find the right lender to suit your unique financial needs.

To learn more about our home equity loan solutions and financing options, you can call Canadalend.com at 1-866-I CAN LEND or contact us here.

Applying for a mortgage can be quite an overwhelming, time-consuming, and even frightening process, particularly for first-time home buyers.

Considering all that is involved in the application process, such as gathering important documents and paperwork, meeting regularly with potential lenders, and everything else in between, it can be easy to slip up and make mistakes that may potentially hinder your chances of getting approved. Such errors can even cost you considerably more than is necessary in the long run.

With that being said, being aware of the common mistakes that are easy to make during a mortgage application can help you better navigate this complex process with more confidence and ease. Such knowledge can also boost your chances of obtaining the most attractive mortgage rates and terms available to you and your family.

In this article, we will uncover five of the most common mortgage application mistakes that homeowners-to-be tend to make. Additionally, we will provide tips on how you can avoid making these errors, too.

Mistake Number One: Dodging the Pre-approval Letter

As a homeowner-to-be, you will want to ensure that you secure a mortgage pre-approval letter prior to beginning your mortgage application process. This pre-approval form will grant you the opportunity to discover just how much money you can get approved for, which will allow you to focus only on the homes you can truly afford during your search. In addition to this, it can also play a role in helping to speed up the process during your final mortgage approval.

Moreover, receiving a pre-approval letter before starting your mortgage application process will give you an advantage over other buyers, as sellers will view you as a more qualified and competent buyer than others without a pre-approval letter to present.

Mistake Number Two: Being in the Dark About Your Down Payment Options

It is essential to know about your various down payment options prior to applying for a mortgage for several different reasons. These reasons include that it will help you determine affordability, allow you to budget for additional expenses, and ensure that you can meet the requirements set into place by your lender (thus increasing your chance of approval).

Lastly, it will also help you identify another way you can save money over your mortgage loan.

Mistake Number Three: Failing to Have All of Your Documents Ready (and Not Ensuring That All Information Is Accurate)

Your lender will require a lot of information from you to determine whether you are eligible for an approved mortgage. Therefore, you should be as cooperative as possible and have all the correct paperwork and documents ready for presentation, which should all be accurate, detailed, legible, and fully complete.

Without all of this necessary paperwork filled to completion, a reputable lender will not be able to successfully process your mortgage loan, or at least process it in a timely manner, as they will be waiting on you to finally provide all the information that they need.

Moreover, including any errors in these documents may also harm your chances of receiving a mortgage approval, as false or misleading information (or withholding certain details) can be considered fraudulent.

Mistake Number Four: Failing to Check Your Credit Score Beforehand

As you are likely already aware, your credit score is a critical component of the mortgage approval process. In order to ensure that the odds are in your favour for an approval, in addition to securing a low interest rate, you will need to ensure that your credit score is above the minimum number required (and ideally on the higher side).

If your credit score could use some improvement, then it is best to put off your mortgage application until you can boost it up to a more attractive score.

Mistake Number Five: Neglecting to Read the Fine Print

Reading the fine print while applying for a mortgage is the best way to ensure that you have a complete understanding of the loan’s terms and conditions (including the interest rate, fees, and repayment period). Make sure that your lender is trustworthy, has a good reputation and allows you to avoid potentially costly hidden fees or charges.

Moreover, it is critical that you read the fine print to become fully aware of your exclusive rights and responsibilities as a borrower, as knowing this information will help you to steer clear of any possible future financial or legal troubles.

Let Our Team of Experts at Canadalend Help You Obtain the Right Mortgage in Toronto and Beyond

When you choose an expert from our team of experienced and reputable private lenders in Ontario, you can rest assured that we will be with you every step of the way in securing the right mortgage for you.

To learn more about our private mortgage solutions in Toronto, as well as our financing options, call Canadalend.com at 1-866-I CAN LEND, or you can contact us here.