Our Blog

Toronto is a North American metropolis that has started to get its due with the likes of New York, Chicago and Paris in the last decade or so. It’s a been a slow ascend to global recognition and the current housing market is a glimpse into the value of Toronto both for businesses and residents.

What Defines a Housing Bubble?

A housing bubble is usually defined by a noticeable uptick in housing prices based on demand but fueled by speculation. The bubble grows as demand increases but as the demand is met by supply the bubble has the potential to burst. Much of this is artificial. The demand was never real and more of a miscalculation by buyers.

Why Toronto’s Market isn’t a Bubble

The bubble that so many people and pundits have warned against is probably just Toronto catching up to other major cities. The speed and craziness of it all makes it feel dangerously like a bubble, but it’s on par with what other major cities have experienced.

As Canada’s foremost job creator, Toronto constantly attracts newcomers from all over the world. Every year new industries and companies open or expand in Toronto and this brings waves of people. People need a place to live which fuels the housing market. It’s hard to fathom this changing any time soon.

Toronto’s Real Estate Market is a Great Investment

There are few safe investments in the world. Most markets and industries are mired with variables that can drop or drive value. That’s the reality that investors face. The Toronto real estate market offers a safer bet since it has provided relative returns year over year for a while now. Even the condo market has defied expectations and grown with more growth predicted on the horizon.

The term “bubble” gets thrown around a lot and if one honestly looks at Toronto Real Estate and how the city is expanding, it feels like a genuine investment opportunity. There might be dips here and there but it doesn’t have the signs of bursting.

There can be a lot of confusion about home equity loans, its benefits and why one should consider it. A home equity loan is simply a type of loan that allows a borrower to use the equity of their home as collateral.

There are some Good Reasons for a Home Equity Loan

It comes down to responsible borrowing but for those in a serious pinch, this type of loan makes a lot of sense. In certain cases, and used properly and strategically, it can even provide a return.

This is a Great way to Tackle Home Improvement Projects

A home equity loan to improve your home is smart if you’ve done your homework and the renovations improve or fix an aspect of your home. Renovations can be pricy and most cannot go out of pocket for them. This is one of the main reasons that this type of loan exists and is worth considering.

If your home has increased in value, then you’ll have even more equity to borrow against in the future.

A Home Equity Loan can give you a Pool of Cash for Investing

Investing is an acceptable but less popular reason to apply for a home equity loan. You can borrow against the equity of your home at a low rate and then use that money to invest. Obviously, this is only recommended for those with experience, knowledge and a proven track record.

Paying for an Education

Many people struggle to pay for their education or for their children’s education. Even in Canada, where it is subsidized, it can be daunting. A home equity loan can help ease that burden, and while there are risks associated, it can pay off in the long term.

A Medical Emergency could Require a Quick Cash Infusion

As opposed to other loans and line of credits, a home equity loan to deal with a medical emergency is justified. It is also a much better idea to apply for this kind of loan than putting these types of expenses on a credit card.

And that brings us to Credit Card and its Debt

Borrowing against the equity of your home to pay off credit cards is never advisable. It is not considered a cure for consumer debt, especially considering that credit card debt is unsecured.

There are a lot of strong reasons to borrow against the equity built up in your home, and the best advice is to speak with the trusted professional.

Major Mortgage Mistakes to Avoid

The real estate market never sleeps. It doesn’t matter if its spring, summer, fall or winter; every day, new “For Sale” signs pop up all over the country. With the Canadian housing market robust, many first-time homebuyers are excited about getting onto the property ladder.

But purchasing a home can be a stressful. For many, the most difficult part of the process is getting your mortgage and financing in order. Thanks to Canada’s tighter lending rules, there are a lot of different changes and regulations you need to be aware of. That can be a tall order. And it might explain why so many homebuyers make mistakes when applying for a mortgage or when looking to refinance an existing mortgage.

Below is a list of 9 common mortgage mistakes you should avoid.

Ignoring Your Credit Score

A good credit rating helps you qualify for the best rates—and not just on a mortgage. A good credit score helps you qualify for the best rates if you need a loan from the bank, car loan, or apply for a credit card. A good credit history is important because it shows lenders you can reliably repay the loan. Having bad credit could mean you don’t qualify for a mortgage, or it can mean paying a higher interest rate.

Opening New Credit Cards

Opening new credit cards or making big purchases on existing credit lines before and during the loan application process can hurt your credit score. If you want to buy a new TV or furniture for your home, wait until after the loan is closed.

Not Getting Pre-Approved

For first-time homebuyers, there’s nothing more disappointing than putting an offer in on a property and then finding out you don’t qualify for financing. Avoid the disappointment and get pre-approved. Getting pre-approved shows you what cost of house you can afford; it also means you can put an offer on the table ASAP! Getting pre-approved also locks in the interest rate for up to 120 days. Getting pre-approved can save homebuyers thousands of dollars in interest charges.

Not Shopping Around

Another big mortgage mistake is failing to shop around. Canada’s big banks will only tell you about the financial products they provide, even if they’re not right for you. Make sure to shop around and see what kind of mortgage you can get with banks, trust companies, and mortgage brokers. A mortgage broker can have access to hundreds of different lenders, many of whom specialise in lending to those who have bruised credit, have filed for bankruptcy, are self-employed, have unreliable pay, or earn a lot from commission. Comparison shop or let a mortgage broker do it for you.

Not “Seasoning” Your Assets

Lenders want to know that you can pay your mortgage, not that you just have a lot of money in the bank. Seasoned assets are deposits that have been in your bank account for at least a couple of months. Having a relative transfer money into your account right before applying for a loan is a red flag. Plus, the lender will want to know where the money came from and why.

Ignoring the True Cost of Home Ownership

Ignoring the true cost of home ownership is mortgage mistake to avoid! There’s more to home ownership than just monthly mortgage payments. If you’re buying a home, you need to take property taxes, maintenance, home insurance, condo fees, utility bills, and home furnishings into the total monthly cost. Inflating your income or ignoring monthly costs can mean falling behind on mortgage payments or bills. This can lead to bankruptcy or foreclosure.

Tight Deadlines

A home is most likely the biggest purchase you’ll ever make. And getting the mortgage is the most important part of the process. Don’t rush a big commitment or feel pressured into make a decision that is going to impact your finances and lifestyle. Talk to your mortgage professional and make sure you leave enough time to remove financing conditions and set a realistic closing date.

Not Reading the Loan Documents and Fine Print

Mortgage papers are not fun to read. Neither is the fine print. But they’re legal documents, and it’s your responsibility to know the terms of your mortgage. Failing to do so could cost you thousands of dollars in penalties and fines. Take the time to fully understand what you are agreeing to. Most homebuyers only pay attention to the rate and amortization period, which are important but so too are payout penalties and pre-payment privileges. Talk to your mortgage broker and go through all the loan documents to make sure you understand everything in detail.

Not Choosing the Right Mortgage Professionals

The right mortgage professional will be looking out for your best interest not that of the lending institution. That’s why it’s important to look for a mortgage professional who is both licensed and independent. A private mortgage broker will help you find a lender who offers you the best financial products with the best rates and terms.
Canadalend.com, Helping Canadians Refinance and Save

If you’re a first-time homebuyer and looking to step onto the property ladder, contact the independent, licensed mortgage experts at Canadalend.com. We will help you figure out what kind of mortgage you qualify for and get you pre-approved.

And once you’ve found your dream home, your Canadalend.com agent will negotiate on your behalf, getting you the best mortgage rate possible. We will also help you find the best way to pay off your loan quickly and reduce interest payments.

To see what kind of mortgage you qualify for, contact Canadalend.com today to set up a free consultation, or apply online and one of our private mortgage specialists will help you set up an appointment at your earliest convenience.

Private Lenders Becoming More Popular

Not all mortgages come from Canada’s big banks and lending institutions. In fact, a growing number of Canadian homebuyers are turning to private lenders to help them realize their dream of home ownership.

Why? Since 2008, the federal government has initiated a large number of stricter lending rules for government-backed insured mortgages. Some of the changes include reducing the maximum amortization period and increasing the minimum needed for a down payment from zero to five percent of the purchase price.

If the purchase price of a home is over $500,000, the down payment rules are even tougher. Buyers still need to put down at least five percent on the first $500,000, but also need to put down at least 10% down on the portion of a home that costs more than $500,000. Homes that cost more than $1.0 million still require a 20% down payment.
All of this has made it more difficult for first-time homebuyers to get onto the property ladder.

Enter private mortgage lenders. What’s a private mortgage? With a private mortgage you don’t borrow money from a bank or trust; you borrow from another person or business. Thanks to tighter lending rules, more and more Canadians are turning to private lenders.
While the number of mortgages given out by private lenders in Canada  remains small at roughly four to five percent of the Canadian mortgage market, the number is growing. During the 2008/2009 recession, private lenders accounted for just 0.8% of overall mortgages.

The fact of the matter is that private lenders play an important part in Canada’s real estate landscape. In 2014, the Canada Mortgage and Housing Corporation (CMHC) discontinued mortgage for those who are self-employed without third-party income validation. With more than 15% of the workforce being self-employed, this was a huge hit to large number of potential homebuyers.

Private mortgage lenders also provide options for first-time homebuyers who are saddled with debt, have bad credit, are divorced, have an illness, have lost a job, owe back taxes, or are non-residents.

Private mortgage lenders in Canada also provide options for potential homebuyers who do not have a long enough income record, or business owners who, for tax purposes, take home a big enough salary.

While private lenders charge a higher interest rate than traditional banks do, they help borrowers rebuild their credit rating so they can eventually go to other lenders and get better rates.

7 Benefits of Using a Private Mortgage Lender

Less Red Tape

If you go with one of Canada’s bigger banks, be prepared to roll up your sleeves. That’s because tighter lending rules means more paperwork for homebuyers. Proof of income documents will be more difficult for those who are self-employed. Or, you may even run a profitable, growing business, but you may not have all the documentation the banks need. Private mortgage lenders streamline the process. Explain your situation to the licensed, independent broker, and they can help you determine what kind of loan you qualify for—right on the spot.

Mortgage Flexibility

Big banks need to adhere to strict lending rules making it more and more difficult for Canadian homebuyers to qualify for a mortgage. Independent mortgage brokers on the other hand are not bound by the same rules and have more flexibility in finding the right loan or financial product for their clients.

Good Mortgage Rates

A private mortgage broker is an expert in mortgages and has a comprehensive understanding of the ever-changing mortgage rate environment. Unlike the banks, which just promote their own products, an independent private mortgage broker can have access to hundreds of different lenders. This means the private mortgage broker can get you the best financial products available at the best rates.

Easy Mortgage Pre-Approvals

Private mortgage brokers are in the business of finding lenders for borrowers who have been turned away from the big banks. And they want to make the mortgage pre-approval process as easy as possible. Because of their independence and streamlined structure, private mortgage brokers have more power and authority for approve or to adjust their loan package.

Higher Lending Risk Tolerance

Homebuyers like private mortgage lenders because they have a higher tolerance for risk than institutional banks do. They know lenders who specialize in helping find mortgages for those with bad credit, are self-employed, or have recently filed for bankruptcy.

Real-Time Lending Speed

With interest rates near record lows and a competitive housing market, timing is of the essence when getting a mortgage or loan. Standing in line at a traditional bank, filing out all the forms, and waiting for approval means you could miss out on your dream home. Private mortgage lenders on the other hand have less red tape, a streamlined process, and access to capital in real time. Because of their personal service, private mortgage brokers can get you pre-approved for a loan that suits your financial and lifestyle needs in 24 -hours or less.

Purchasing Advice

Buying a property is a big step. And there is a lot to consider before you sign on the dotted line. That’s where a private mortgage broker can help. Not only do private mortgage brokers understand mortgages, they also understand the real estate market in your area. They may be able to offer you advice on your property and explain the pros and cons of the purchasing process.

Canadalend.com: The Private Lender Specialists

Just like the big banks, when it comes to private lenders, it’s important to shop around. The best way to find the best private mortgage is to talk to a licensed, independent agent at Canadalend.com .

At Canadalend.com, we network with a large number of private lenders who have helped our clients with private mortgages. If you’ve been turned down by one of the big banks, contact Canadalend.com today to set up a free consultation, or apply online and one of our private mortgage specialists will help you set up an appointment at your earliest convenience.