Month: March 2018

While owning a home is an asset, there may come a time when you will have to move. Depending on your situation as at that time, you may need to upgrade or downsize. And you will want to sell your current home and buy a new one.

For many homeowners, it may make more financial sense to use the equity they take from their existing home, in purchasing a new one. If you find yourself in a situation where the closing date as you sell your home, comes after the closing date of buying your new home, Bridge Financing Mortgage could be your solution.

It applies especially when your down payment is tied up in the equity. Which lenders do you go to? Get yourself a reliable and expert mortgage broker. We at GT Mortgages also specialize in Bridge Financing Mortgages. Feel free to contact us.

How Does It Work

Bridge loans are typical, especially in all the Big Banks. And not all small lenders may be able to offer you bridge financing. If you find a lender who gives Bridge financing mortgages, they typically:

• Lend up to $200000 for a maximum of 120 days. For those who may need a longer time or a more substantial amount, the lender will require more work to evaluate your case.

• Often, the lender will not need to register a lien on the property, as the loan is short-term. If you get a loan for a longer term or a more significant sum, the lender may need a lien. It will increase your costs due to the added legal fees.

• It has some interest.

• You need to provide the Purchase Agreement for the home that you want to buy and the Sale Agreement for your existing home.

Calculation

Say, you have 90 days until the closing date of your current home, however, the closing date for your new home is in 35 days. Getting a bridge loan will cover the difference in the closing dates, i.e.
90 -35 = 55 days
A bridge loan will provide you with the difference between your total down payment that you would like to put down, and the deposit you make.
5% deposit = 5% (Purchasing price of the home)

Bridge Financing= Total Down payment – Deposit.

If you need Bridge Financing and don’t know where to look, GT Mortgages is here for you. Contact us for your Bridge Financing Mortgage solutions.

Too many of us, we hope to own homes and raise our families in it. However, our Credit Scores determine whether or not we are eligible for a mortgage through the conventional and regulated lenders. So, do you have Bad credit?
If yes, though your options won’t be similar to that of one who has good credit, you can still realize your dream of owning a home. To get the best mortgage you will need to practice discipline and plan. The following is what you need to know:

• Patience Pays

You’ve had a tough break that caused you to go bankrupt or have a consumer proposal. Now, once your case is discharged, the mainstream lenders won’t consider you, until, after a minimum of two years. It is the time to rebuild your credit.

Work on getting your credit score up and improving your finances. Find yourself stable employment and getting income that is provable. If your employment history is unstable, then to the lender, you become a risky investment.
A prime lender will approve you for a mortgage if you have a steady income and proper credit. The same applies to commission workers and those who are self-employed.

• Look Into Alternative Lenders

Maybe you feel the two years is too long a period to wait. What next? Some specific lenders deal with borrowers who have bad credit. With the conventional lender, you would have had to put a down payment of 5%, but the rules don’t apply to the uninsured and private lenders.

You can consider borrowing from a trust company if your credit score is high but not doesn’t meet the threshold. With a private lender, you may have to make a down payment of at least 20%.

• Bigger Down Payment

You do not meet the requirements of the A-lenders. Saving for a more significant down payment not only improves your finances but also helps you qualify for a subprime lender. It shows the potential lenders that you are less of a financial risk.

With a more significant down payment, you reduce the mortgage payment period, or you can amortize this high-risk mortgage over an extended period by making smaller payments.

• Rebuild Your Credit Score

Take charge of your credit score and rebuild it. Purpose to pay your bills in full, and in time. Try and meet the minimum monthly payments you make on your credit card statement. Don’t spend more than 60% of the given limit. Use a secured credit card if you don’t qualify for an unsecured one.

When choosing a secured credit card provider, it is ideal to go for one who after proving your creditworthiness, gives your deposit back to you.

So, yes you can qualify for a mortgage even if you have bad credit. But you will still need to work on your credit score. It will open doors to saving thousands of interest.

Every New Year is a season to rejoice and look forward to in hope. We are just a few weeks into the New Year. At the start of this year, the new mortgage rules as imposed by the OFSI (Office of the Superintendent of Financial Institutions) took effect.

If you are planning on buying a house, this year, you need to familiarize the changes made and the impact it may have. In the new regulations, both the uninsured and insured borrowers have to face a stress test. It doesn’t matter how much you put as down payment.

What does it involve?

• Scenario One

When applying for a mortgage, the potential lender needs to vet your application using the minimum rate for qualifying. That is the five-year benchmark rate by the Bank of Canada.

• Scenario Two

Also, the Lender can vet you at a higher rate by two percent of the actual mortgage rate. The choice between which of the two will depend on the higher interest rate.

This move by the OFSI aims at stimulating the financial situation of the borrower. The test will also apply to mortgage renewals, and specifically to those who will be looking to renew with another lender other than the existing one.

What are the options for one who doesn’t pass the stress test?
You will have several options to choose from if you fail the test. That includes:
 Adding more money towards your down payment
 Wait longer to become a homeowner
 Look for a cosigner

It’s is no debate that these regulations will affect the ability of would-be homeowners to buy their dream homes. Some will have to settle for homes at a lower price than what they would have afforded before the rules were enacted.

Also, you may have to forgo the lenders who are federally regulated, as they are the ones who have to abide by these regulations. If you are lost on how to find a mortgage that meets your needs, you can contact our experienced team of experts in the mortgage industry at GT mortgages.

We all desire to reach the state of financial freedom. And if it comes faster, that’s even better. When you are buying a house, of the major concerns for many is a mortgage.

It may be challenging to find the optimal mortgage for your needs but having debt is not a thing that many of us look forward to. But since it is a huge financial decision that you will make in your lifetime, it is essential to familiarize yourself with all the options.

What are some of the ways, in which you can pay off your mortgage faster?
• Make a lump sum payment

Depending on your mortgage contract with your lender, you can make a lump sum payment towards your mortgage. This amount is applied to the outstanding principal. It is so when you don’t owe any outstanding interest.
Also, it is a limited amount, according to the terms of the contract. If you put more money than the acceptable amount, you will be liable to prepayment penalties. If the mortgage contract is open, at renewal, you may be able to pay as much as you can, at that time.

• Increase your regular payments

Even a small increase may help you in paying off the mortgage amount faster. Usually, if you increase the remittances, you may not be able to lower then, during the term of the contract. It is the period in which the deal is in effect.
To avoid prepayment penalty, you can only increase your payments by a certain amount. It should be as agreed in the contract.

• Increasing the frequency of payments

It is also known as the accelerated option. Here, you opt to make payments on a weekly or biweekly basis. In the long run, it saves you on interest charges. It also helps you pay the principal faster.
You may be able to make an extra monthly payment, in a year, with the accelerated option.

• Same Payments even with reduced rates

As you renew and negotiate a new interest rate for your mortgage, you may get a lower rate. If you keep paying the same amount towards your mortgage, and with lower interest rates, you will be able to pay your mortgage faster.

So, yes, you can achieve financial freedom and final call it home, with the above mortgage repayment options.