Infill Construction Financing

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Infill Construction Financing

In real estate markets in many of Canada’s largest urban centres infill construction financing has become a common request by many builders and investors. Even home owners consider infill construction financing for rebuilding their homes on the existing land they are living on.

Infill Construction Financing

 

In places like Toronto, Vancouver, Calgary, Montreal and the surrounding cities of these urban centres infill construction financing applications have become a normal and routine process in attaining the funds needed to start a residential construction project. It is pretty well the same with non-residential or commercial construction projects.

This is yet another important reason why a borrower, investor, and or builder should work with a Mortgage Broker as many of them have extensive experience in working with many lenders who provide infill construction financing.

For the most part infill construction refers to the process of getting money for financing the construction of a real estate project in which the applicant has or will be purchasing an existing property and the land it is on for the purposes of knocking it down to build a new property on it. At times infill construction financing also refers to the acquisition of raw land on which plans are in place to build residential or commercial property on it.

Infill Construction Financing requirements

  • Each lending institution will have their own borrowing requirements, but some of these can be applied across the board with many if not all lenders.
  • Minimum and maximum loan amounts
  • Borrower qualification standards for income / employment
  • Credit worthiness in the way of credit checks and its history and strength
  • Past experience in home or commercial building projects
  • Lending interest rates will vary based on each projects unique realities and other variables like, location, size, and funds required.
  • Usually there is a lender and broker fee
  • Appraisals will be required throughout the project to verify land and property value before and after infill construction project
  • Sometimes even environmental tests must be done depending on the type of property and land currently on site
  • With infill construction the lenders typically give up to 100% of the hard construction costs and up to 75-80% of the lot purchase price or appraised value

Infill Construction Financing

The above items should give you a good idea of what is involved with applying for infill construction financing. At Trustterra Mortgage we’re always here to help our clients attain the best possible mortgage financing options available to them based on their credit and income realities. If you have any questions or wish to start on a infill construction financing project Contact Us. We would be happy to help!

 

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Fraud Prevention Month 2017

Fraud Prevention Month 2017

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Today is the start of Fraud Prevention Month 2017

As explained by the Government of Canada’s Competition Bureau “Fraud Prevention Month is an annual public awareness campaign held in March that works to prevent Canadians from becoming victims of fraud by helping them recognize reject and report it.”

For fraud prevention month 2017 there will be many organizations large and small who will be contributing informative and educational material about fraud prevention.

fraud prevention month

To get our fraud prevention month 2017 campaign off on a good start we will share these prevention tips from the Competition Bureau of Canada:

Tips to Protect Yourself from Fraud

  • Don’t be fooled by the promise of a valuable prize in return for a low-cost purchase.
  • Be extra cautious about calls, emails or mailings offering international bonds or lottery tickets, a portion of a foreign dignitary’s bank account, free vacations, credit repair or schemes with unlimited income potential.
  • Don’t be afraid to hang up the phone, delete the email or close your Internet connection.
  • Don’t purchase a product or service without carefully checking out the product, service and company.
  • Don’t be afraid to request further documentation from the caller so you can verify the validity of the company.
  • Don’t disclose personal information about your finances, bank accounts, credit cards, social insurance and driver’s license numbers to any business that can’t prove it is legitimate.
  • Shred unwanted personal information such as bank statements, credit card bills, unwanted receipts, cheques, pre-approved credit applications and old tax returns.
  • Check your credit report every year and report problems immediately.
  • If a scam artist contacts you, or if you’ve been defrauded: Report it! Your reports are vital to the anti-fraud efforts of law enforcement agencies.

Source: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03662.html

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Rental Property Mortgage

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Rental Property Mortgage

Purchasing or refinancing a rental property can be a lot more complicated when it comes to getting a rental property mortgage. Another industry description of it is investment property mortgage; where investment property could be a residential rental property, or none residential property.

In Canada the Chartered Banks and many National institutional lenders offer the same discounted rates and features as regular owner occupied mortgages for rental property mortgages up to 4 units. But once you go passed the 4 unit cap then the mortgage becomes categorized as a commercial transaction and it is underwritten and viewed as such, including more strenuous ‘stress’ tests and mortgage conditions and policies.

Rental property mortgage or investment property mortgages

Are still available through the Chartered Banks but they can be very difficult to be approved by them, whereas other institutional lenders and private lenders can be more flexible and forgiving on certain personal and corporate borrower realities that the banks won’t be flexible on.

Many times than not, when a borrower cannot get their rental property mortgage application approved by the Chartered Banks they approach mortgage brokers, or mortgage agents for help. Mortgage Brokers or Mortgage Agents have specialized training and knowledge of the mortgage industry and can help with finding the suitable lender who would be the right fit for their client’s rental property mortgage.

A rental property mortgage would generally be called and categorized by some as a commercial mortgage. With these types of mortgages the time needed to get the mortgage approved and closed is much longer than traditional residential owner occupied mortgages. On average it can take one month or longer to complete a rental property mortgage transaction.

There are different sub categories or types of rental property mortgages and we will go through each of them in terms of the borrowing features they have:

Multi-Unit up to 2 units

One of the units must be occupied by the owner

duplex rental property mortgage

Can borrow up to 95% of the appraised value

Most of the time the mortgage is portable to another property

If providing less than 20% down payment the rental property mortgage must be insured through Canada Mortgage Housing Corporation CMHC

Although CMHC allows flexibility of where the down payment comes from, most lenders do not, and require that the borrower of the mortgage has the down payment in his or her bank accounts for at least three months (two months if not insured)

Maximum amortization is 25 years

All employment and credit history / strength requirements apply

Have mortgage questions about rental property mortgages or investment properties in general? Reach out to us. We can help.

Multi-Unit 3-4 units

One of the units must be occupied by the owner

Can borrow up to 90% of the appraised value

Most of the time the mortgage is portable to another property

If providing less than 20% down payment the rental property mortgage must be insured through Canada Mortgage Housing Corporation CMHC

Although CMHC allows flexibility of where the down payment comes from, most lenders do not, and require that the borrower of the mortgage has the down payment in his or her bank accounts for at least three months (two months if not insured)

Maximum amortization is 25 years

All employment and credit history / strength requirements apply

If you are considering purchasing this type of property or refinancing an existing one please contact us.

Multi-Unit 5 units and up

With any properties of 5 units or higher Chartered Banks refer the application to their commercial departments and Mortgage Brokers or Mortgage Agents would submit their applications to specialized commercial lenders, and some who have relationships with local commercial bank branches in the locality of the subject property may also submit the application to them.

rental property mortgage

Chartered Banks work with CMHC when the clients have between 15% and up to but not including 20% down payment. Some of the National lenders also work with CMHC and may accept applications with less than 20% up to 15%.

With CMHC insured rental property mortgages a minimum of 15% down payment is required when purchasing or refinancing.

Most commercial lenders for rental property mortgages work with CMHC even if the client provides 20% down payment. This is to protect themselves in the event of a default.

CMHC also charges a premium fee for each unit in the property. Detailed calculation of the premiums are done by CMHC and provided to the lender, which is then forwarded to the Mortgage Broker or Agent to share with the client. The fee schedule could also be found on CMHC’s web site

To mitigate risk and to avoid CMHC insurance lenders will consider a lower mortgage amount and higher down payment by the borrower, normally anywhere between 60% to 70% of the appraised value.

We are here to help and accompany you through the complicated mortgage application process of multi-unit 5+ properties. Contact us and let’s work together.

 

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Mortgage Renewal

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It’s Mortgage Renewal time

Is your mortgage coming up for renewal within the next several months? Don’t settle for less. If you don’t look around you’ll never know if your existing lender is offering you the best mortgage renewal package. This is where we come in. As a mortgage brokerage we shop around on behalf of our clients to make sure they get the best overall suited mortgage product for their mortgage renewal needs. And never compare yourself with another person’s mortgage as everyone’s personal situation could be different, which in turn will require customized approaches towards getting the right mortgage at mortgage renewal time.

mortgage renewal

 

 

 

 

 

 

 

 

 

Different Reasons for mortgage renewals

So you’ve been thinking lately about what to do with your mortgage. Contact us and lets think about it together. You’ve also heard that the lower your mortgage balance is the higher your home equity would be and the more money you can access from your home. That is true, as your mortgage balance decreases the percentage of the equity you can access from your home increases.

Here are some reasons why you should contact us:

  • You want to do a mortgage renewal for a better rate than what your current lender has offering you
  • You want to do a mortgage renewal to consolidate your debts and pay a lower interest rate on the new larger mortgage amount
  • You want to do a mortgage renewal with a new lender to add a home equity line of credit to your house
  • You want to do a mortgage renewal so you can change lenders to a new one because you’ve heard good things about them and like their offerings, or have other accounts with the new lender
  • You have other personal doing a mortgage renewal with a new lender

Perks to switch to a new lender

The lenders have internal perks, unadvertised for the general public for switching your mortgage that only the mortgage broker community knows about. For example, if we switch your mortgage the new lender could cover the legal, appraisal, and the discharge fees. Therefore not only are you benefiting with getting expert unbiased professional advice for your renewal from Trusterra Mortgage, you are also getting competitive mortgage rates, and are switching your mortgage at minimal cost to you.

 

If you recently got a new mortgage or renewed your existing one, you can always give us your details and let us know when to contact you for when the time comes to renew again by using our free Mortgage Renewal Reminder Service.

Ready to start or maybe you have some questions to ask first? Contact us and we’d be happy to help you.

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Mortgage Calculator

Mortgage Calculator

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Mortgage Calculator

With the advancement of the world wide web, and the progress of technology making it easier than ever for the consumer to perform research online for almost every subject under the cloud, more people are also using online mortgage calculators to find out how much their potential monthly mortgage payments would be, or how much they can get approved for.

Trusterra Mortgage also offers a mortgage calculator for visitors to explore their options. For basic calculations the mortgage calculator will get the job done, but for more advanced and accurate results it is always best to consult directly with a mortgage professional. That is why we here at Trusterra Mortgage always take the extra steps and time to really understand our clients need to be able to better serve them and provide the best suitable information and advice for our client. mortgage calculator

As mortgage professionals we have access to an advanced industry grade professional mortgage calculator that takes into consideration all the needed numbers and information in order to provide accurate results.

Whether you are ready now to apply for a mortgage or just wondering how much you could get approved for, or want to know what would be your monthly mortgage payments, we suggest that you Contact Us, at no cost to you of course, and let us help you and answer all your mortgage related questions.

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Mortgage for Cottage

Mortgage for Cottage

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Getting a Mortgage for Cottage Could be Within Your Reach

Do you have a dream cottage that you plan to own one day? You’ve probably been doing the whole cottage rental thing every summer, paying a weekly or daily cottage rental fee to go up North to that amazing spot by the lake with the family and friends. Many people feel that cottage ownership is out of reach and reality for them due to high cottage prices. But it doesn’t have to be that way.

mortgage for cottage

Mortgage for Cottage is attainable for more people than you think

Planning is key to buying any real estate, cottage property included. What better time than when you’re young and just started your career to put money aside on a monthly basis. For those families who already own a house and are starting to build equity on their property and paying down the mortgage, it can be an opportunity to use it for a down payment on the cottage.  There are so many different case scenarios that each one should be looked at on its own merits.

How does getting a Mortgage for Cottage work?

Like any other mortgage application for purchasing real estate the same process is involved with getting a mortgage for cottage. Best is to work with a Mortgage Broker or Mortgage Agent as they have specialized experience and skills with mortgages and have access to multiple lenders who would entertain your cottage mortgage application.

There are three main areas that you have to consider when applying for a mortgage for cottage:

(1) Income / Employment

Like any other loan application the lender needs to make sure you can afford to pay the monthly principal and interest payments on their loan / mortgage. Whether you are employed or self-employed it is possible to apply for a mortgage for cottage. You just need to be able to show proof of income and employment or self-employment through such things as pay stub, and employment letters for those who are employed, and business licenses, articles of incorporation, Government tax filings showing self-employed declared income for those who are self-employed.

(2) Down Payment

There is no such thing as a free mortgage. In Canada you need to have at least 5% of the purchase price from your own resources. Meaning you can’t borrow money from individuals (excluding immediate family), or companies, or a lender to pay for your down payment. You must be able to show that you have that money in your bank accounts or other investments. Many people don’t realize that there are still a few lenders out there who will entertain a mortgage for cottage application with as low as 5% down. Remember that the less down payment you provide the more income you will need since the total mortgage amount will be higher than if you had more down payment.

(3) Historically strong and healthy Credit

And the third main item that the lenders look at when someone applies for a mortgage is how strong and healthy their credit report is. There should be at least a two year history of credit activity in your credit report from Equifax and Transunion, who are the two main credit reporting agencies in Canada. Lenders don’t like to see late payments, credit collections, or bankruptcy’s in your report. This is not a good sign that you are able to pay back money you borrow.

 

Trusterra Mortgage is here to Help

We’re here to help from the start to the finish, working along your side until all is done. Have you been considering the idea of cottage ownership? Not sure if you could afford to buy a cottage property? With any questions you have don’t hesitate to Contact Us.  And its no cost to you; a win-win situation!

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Home Equity Line of Credit

Home Equity Line of Credit

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What is a Home Equity Line of Credit?

A HELOC or Home Equity Line of Credit is a secured line of credit against your property. Just like a personal line of credit, which is unsecured, a home equity line of credit gives you access to a revolving line of credit but at a much lower interest rate than a personal line of credit.

home equity line of credit

More Equity on your home = More Home Equity Line of Credit limit

In Canada regulations limit how much you can be approved for a Home Equity Line of Credit. You can have a HELOC limit of up to 65% of the appraised value of your personal residence.  Therefore the faster you pay down your mortgage, or the more down payment you provide when purchasing your home the faster you can get access to the HELOC.

Where can you get a Home Equity Line of Credit?

All the Chartered Canadian Banks offer home equity lines of credits along with their portfolio of mortgage products. As well, some of the mortgage lenders, mono line lenders, also offer HELOC’s, but not all.

How do I get approved for a Home Equity Line of Credit?

When you apply for a mortgage is the time that your mortgage broker professional would also request for a HELOC for you. The approval of a home equity line of credit will be based on which lender you are applying to, your income to debt ratios, and whether there is enough equity in your home, or in another way to say it . . . how much mortgage you have in comparison to the value of your home.

You do not necessarily need to get a mortgage in order to be approved for a home equity line of credit. Should your home be free and clear, or if you have been living in it for a long time and the value in comparison to the mortgage balance is significantly greater, then you can also apply for a HELOC.

Why do I need a HELOC, what would I use it for?

A home equity line of credit can be a very handy and effective resource to have for when you need extra money at low interest rates. You can use your HELOC for many different purposes. Here are a few common ones:

– pay down high credit card debts

– use towards purchasing a second property or investment property

– a source of emergency money for when the need arises

– purchasing larger items that are expensive enough that you would not want to pay by cash

What is the interest rate for a Home Equity Line of Credit?

Home equity lines of credit interest rates are based on the lenders prime rate plus a certain percentage. With most lenders HELOC rates range anywhere from Prime +.50% to Prime +1.0% depending on the credit limit. The higher the limit the better the discount.

 

Have you been considering getting a Home Equity Line of Credit but not sure if you are qualified for one, or how much you can be approved for? Contact us and we would be happy to help you with your HELOC inquiry’s.

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Check Your Credit Report

Check Your Credit Report

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Did you know that you can check your credit report for free?

That’s right, once a year you can ask the credit reporting agencies Equifax and Transunion for free to mail you, or you can pick it up in person, your personal credit report. If you need it faster, you can always create an account online with them and quickly pull your credit report and save it electronically for future reference. Otherwise, if you have the time, you can wait for your personal credit report to arrive in the mail.

check your credit, equifax, transunion, score

Check your credit report once a year

It is recommended to check your credit report once a year. This regular interval is helpful to prevent fraud, because when you check your credit report you can see exactly all your credit activities and if someone fraudulently uses your credit information it will be noticed and can be rectified immediately.  Alternatively, if left unchecked and only noticed some time later when you apply for a credit card, or a car loan, or for a mortgage, and then at that point it is noticed, the problem can set you back with your applications as you first will need to resolve the issue(s).

It is educational and informative to check your credit report

When you check your credit report not only do you see a credit score, but you see everything about your credit activity and history in the last seven years. You learn what is being reported to the credit bureaus, what your balances, are and also you might see credit items that you thought were closed or canceled or paid off still no closed or not canceled or not paid off. This gives you time to go after the discrepancies and rectify the problem, because it could be negatively affecting your credit strength and score.

Government of Canada has information on how to check your credit score

We are thankful to the Government in being proactive in providing helpful information and tools that assist the consumer in learning about how to manage their debts and improving their credit strengths.

To learn more about how to check your credit score or find out about the different tools on their web site, check out the following links:

Financial Consumer Agency of Canada

“How to Order your Own Credit Report”

“Understanding your Credit Report and Credit Score”

 

Trusterra Mortgage is also hear to help. Should you have any questions about credit score and how it affects your mortgage approval rating do not hesitate to Contact Us. We would be happy to assist you.

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Fraud Prevention Month 2015

Fraud Prevention Month 2015

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Its Fraud Prevention Month 2015

fraud prevention month 2015
picture courtesy of Competition Bureau, Government of Canada

It’s fraud prevention month 2015 in March and Trusterra Mortgage will endeavor to provide relevant and informative content regarding how to avoid fraud.

To start fraud prevention month 2015 we would like to share tips from the Government of Canada Competition Bureau.

Tips to Protect Yourself from Fraud

  • Don’t be fooled by the promise of a valuable prize in return for a low-cost purchase.
  • Be extra cautious about calls, emails or mailings offering international bonds or lottery tickets, a portion of a foreign dignitary’s bank account, free vacations, credit repair or schemes with unlimited income potential.
  • Don’t be afraid to hang up the phone, delete the email or close your Internet connection.
  • Don’t purchase a product or service without carefully checking out the product, service and company.
  • Don’t be afraid to request further documentation from the caller so you can verify the validity of the company.
  • Don’t disclose personal information about your finances, bank accounts, credit cards, social insurance and driver’s license numbers to any business that can’t prove it is legitimate.
  • Shred unwanted personal information such as bank statements, credit card bills, unwanted receipts, cheques, pre-approved credit applications and old tax returns.
  • Check your credit report every year and report problems immediately.
  • If a scam artist contacts you, or if you’ve been defrauded: Report it! Your reports are vital to the anti-fraud efforts of law enforcement agencies.

 

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Managing Your Debt

Managing Your Debt

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Managing your debt

managing your debt

Income Status

Whether you are unemployed, employed, or self-employed, managing your debt is a very important matter that should not be put aside for a rainy day. Understandably, it can be very stressful and time consuming to worry about managing your debt, but it is one of those items on your ‘to-do-list’ that should be at the top of your list.

Temptations

It’s sometimes hard to avoid all those sales people in the malls’ and supermarkets promoting credit cards and other credit sources with all the ‘perks’ and ‘gifts’ that come with them when you apply for the credit card. Even at the university and college campuses across the country students are at times bombarded with advertisements of credit cards and loans. It is at these times that you need to be disciplined and focused on the more important and immediate things in life. Chances are that if you need extra credit cards and loans to purchase items, then you probably are not making enough money or are already to your credit limits. Psychologically we feel that the debt can be paid back on a monthly basis in the long term and we don’t worry about it. However, it is much harder to do this than it seems.

It’s Hard

Managing your debt therefore becomes strenuous, difficult, overwhelming, and depressing, affecting other areas of your life and let’s not forget the effects debt has on your personal relationships with those who you love the most.

Trusterra Mortgage sees the effects of debt in the mortgage industry as well. Many home owners who have maxed out on all their credit cards begin to have challenges in keeping up with their mortgage payments. If not addressed quickly, they see themselves with the risk of losing their home, one of, if not their largest personal investment.

Never Give Up

Don’t give up and don’t feel dismayed when thinking about managing your debt, because there are many different sources and resources out there ready to assist; they include Government agencies and private sector not for profit groups.

If you are having trouble with making your mortgage payments please Contact Us and we will do our best to see what options are available for you in resolving your debt issues. As well, if you are currently living with family, or renting a place, and are in debt, you too have options to managing your debt.

There is Light at the End of the Tunnel

If you are having difficulty and challenges in managing your debt, the following links will be of interest to you. Not sure about how to deal with your debts? It doesn’t hurt to send us a private message and its free consultation that we offer you.

Good luck and don’t forget to check out the below links.

Financial Consumer Agency of Canada – Empowering Canadian financial consumers and promoting responsible financial market conduct.

Industry Canada Office of Consumer Affairs – The Office of Consumer Affairs (OCA) promotes the interests and protection of Canadian consumers.

Canadian Association of Credit Counselling Services – Helps to establish a Canadian culture of responsible financial behavior and aims to enhance the personal financial well-being of all Canadians by strengthening their financial health.

Credit Counselling Society – The Credit Counselling Society is a Canadian registered, non profit service for consumers.

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