If you are thinking about purchasing raw land in British Columbia, Canada for the purpose of building a house, recreational property or for investment, there are many factors and costs to consider. The cost of servicing the land for construction and to build out may be quite significant. Furthermore, if you are holding the land as investment, one should be aware that this is a risky and speculative type of business venture. Those who do purchase raw land and make money from it tend to be sophisticated real estate experts, who understand the mechanics and potential industry circumstances. The purchaser must have a clear and objective focus in terms of goals and the inherent risk. As a result of numerous risks surrounding raw land, the potential rate of return on your investment may be extraordinary. Let’s go over some of the pros and cons of purchasing raw land and how a private mortgage loan in BC can help you achieve your investment goals. Advantages of Purchasing Raw Land in British Columbia: Cost
Disadvantages of Purchasing Raw Land: Financing
Private Mortgage Loans for Raw Land Purchase in British Columbia
If you are a current homeowner in BC and are considering making a purchase of raw land, it’s important to understand the advantages and disadvantages of this type of investment. If you have any questions or concerns regarding the purchase or financing aspects of raw land, please contact a mortgage specialist to better understand your options. Whether you live in Surrey, Langley, Abbotsford, Kelowna, or elsewhere in British Colubmia – get in touch with us today to learn more about how Silver Hill can help you achieve your goals with a private mortgage loan. Defaulting on your mortgage may have serious consequences. If the borrower breaches any terms of the mortgage or misses regular payments, the lender has many firm remedies they may exercise to protect their investment. Making your regular payments on time and keeping within the terms of the loan will spare you potential foreclosure and plenty of grief. What are mortgage arrears?![]() As in any contract, your mortgage agreement will outline all the terms and conditions related to your loan, specific to you. You fall into mortgage arrears when you start falling behind on your payments – for example, missing a mortgage payment. Missing mortgage payments go against the terms agreed upon when you initial took out the loan, and is to be avoided as much as possible. Any breach of the terms and conditions by the borrower may trigger the lender to take corrective action. Why do people fall into mortgage arrears?Some of the most common reasons for default would be for:
Given the above reasons, one may find themselves in a difficult situation. However, there are also many options for the borrower to consider if they are in default of the mortgage contract. How do I get out of mortgage arrears?Some of solutions for those currently behind in mortgage payments include:
Due to the fact that mortgage finance makes up the bulk of real estate transactions, there is a greater likelihood of challenges and problems. Borrowers are faced with high unemployment, failing businesses, times of recession and so many unexpected things in life, which may result in financial turmoil. There are several solutions for the borrower if behind on their mortgage. Private Mortgage Lenders for Bad CreditIt would be wise to speak with a mortgage broker to get your options laid out for you if you are faced with mortgage arrears and imminent foreclosure. If you have bad credit and are looking for private mortgage lenders, and live in Surrey, Vancouver, Abbotsford, or elsewhere in the Lower Mainland, give us a call today at 604.620.2697. You don’t have to do this alone – let’s discuss your options.
If you are considering purchasing an investment property in Kelowna, Vernon, Kamloops, or elsewhere in the Okanagan Valley or Lower Mainland, with the intention to renovate, there are key items to seriously consider. Others may consider to invest in properties in the Metro Vancouver area, spanning Vancouver, Burnaby, Langley, Surrey, or the tri-cities – but the planning remains fairly the same when looking into renovating. As you know, real estate investing in Kelowna, Vancouver, or elsewhere in BC is not cheap by any means and requires some considerable planning. The process and plan should consist of selecting the ideal property, renovating, and preparing it for rental or to sell for a profit. Top Things to Consider When Purchasing an Investment Property for RenovationWhen you are in the process of selecting a real estate investment property for renovation in BC, here are 6 main factors to focus on: NeighbourhoodThe location and neighbourhood should be pleasant and attractive. The neighbourhood should be safe, crime free and preferably family oriented. Whether you are looking for a real estate investment property in West Kelowna, or a townhouse in Surrey, the location within those cities definitely matter. Renovation Permits & RequirementsThe property should be easy to renovate, meaning that there is no need for many permits and applications required from the city authority. Depending on if you are buying a rental or investment property for renovation in Kelowna, Kamloops, Vancouver, Victoria, or Langley – be sure to understand the different requirements from the city authority to renovate as smoothly as possible. The least amount of resistance from any third party and streamlining the process is best. Find a house which has as little major renovation obstacles to overcome as possible. Try and avoid situations involving faulty issues with foundation and building structure. Access to Amenities & Walking ScoreEnsure that the property has access to as many amenities as possible. These amenities would include shopping, transit, schools, and even health centres and hospitals. It is a benefit having many of these amenities as close to the residence as possible, whether you are looking to rent the space out or sell it for a profit. LocationAvoid properties which are very isolated. Perhaps the price point may be far less for properties further out of major towns and cities, but they are not always as desirable. This is for the obvious reason, that location is what sells and makes the property extremely desirable. The best location typically gets the best results, which should be a factor to consider when investing in property in BC. Good CraftmanshipIncorporate good quality and noticeable craftsmanship in the renovation work to be done. A visible appreciation and acknowledgement of the work completed should be achieved. Take pride in the renovation and ensure you have the work done right by a professional. Avoid cutting corners and try not to cheap out on certain aspects if you can avoid it. New DevelopmentsSeek out a location which has plenty of new construction and renovations on going. The construction activity and atmosphere will complement the property you are renovating. It will resonate an appealing image that you are beautifying the property to come. Renovating a property in BC is an exciting experience for many, but you want to make sure that you are familiar with the process. If you lack the experience but have the desire, you should educate yourself and seek out expert advice. You may consider connecting with several contractors and have them assist with the planning and give you independent quotes for the work to be done.
If you are looking to get started with renovating your property but are having challenges with the financing, and are located in Kelowna, Vancouver, Surrey, Langley, Victoria, or elsewhere in BC - get in touch with us today and we can walk you through the process of leveraging your home equity to finance your home renovation. If you are looking to pursue an investment property for renovation to later rent out or sell for a profit, we may also have a private mortgage solution for you. Leave a comment below or get in touch with us today at 604.620.2697 to discuss your options. Appraising a property has so many benefits, since no two pieces of real estate are identical. If you intend to buy or invest in real estate in Vancouver, Surrey, Kelowna, Victoria, or elsewhere in BC, finding the right appraiser to support in the process is important to keep in mind. Professional appraisal companies prepare the reports and offer an opinion of the estimated value based on several market and subject property details. An appraisal report is highly dependent on the expertise and objectivity of the property appraiser, and the assumptions they make. ![]() Benefits of a Home Appraisal There are numerous benefits of having a professional appraisal prepared. Reasons for having an appraisal report prepared would be: - to determine property value for a potential property purchaser as he contemplates an offer to purchase - to determine property value for the mortgage financing requirements by a mortgage lender - to determine property value for house / building & property insurance - to determine property value as you try and figure out an asking price for your property - to determine property value if you appeal your property tax assessment with the municipality - to determine property value as you deal with family estate matters such as death or divorce - to determine property value for potential property expropriation purposes - to determine property value for any court litigation purposes - to determine property value for capital gains taxation ![]() If you seek to get an appraisal completed in BC, ensure you search out appraisal companies who have their professional designations and are regulated by their associations.
Two appraiser designations to be on the lookout for when looking for a property appraiser are:
It is extremely important to find the right appraiser especially if you intend to invest in real estate. Need more info on property appraisals or pursuing a home equity loan? Get in touch with Jim today for a friendly chat at 604.620.2697. Are you looking to purchase a home? Exploring your real estate options in Vancouver, Surrey, Kelowna, or elsewhere in BC? Whether you are looking into buying a summer home in the Okanagan, or purchasing an investment property in the Lower Mainland, it’s best to do your research and understanding the 5 main areas that affect real estate prices. Let’s take a look!
Location: Location, location, location. This is one of the most significant factors which influence the price of real estate in BC. You could be looking at purchasing a property in a certain neighbourhood of Vancouver or Surrey, or perhaps a summer property in Kelowna or Vernon, but essentially – the more desirable the location, the greater the value and pricing. As you assess the location of real estate, it is important to factor in amenities, appearance, centrality, along with potentials for development and expansion. It is often said that value-wise you are likely better off having and average house in a great location, than having the best house in a poor location. Further, location is one of the most determining factors in resale value and ability. Property location creates desirability, and this desirably creates an unwavering demand for such real estate. Supply & Demand: The amount of supply vs the demand for housing will certainly affect the price of real estate in BC. As previously stated, location creates desirability, desirability creates demand, and this demand raises property prices. The lack of the availability of desirable property will also affect prices in the area. The fewer the number of desirable properties, the more expensive and valuable they become. The opposite is also true. If there are too many properties available to purchase in one particular location, the prices will tend to weaken. Economy: A strong economy is extremely important in stimulating the real estate market. If the economy is strong and the overall feeling is positive, the market activity will be positive, and this should push prices upward. On the flipside, if there are negative or doubtful feelings of the economy, this will seemingly lower the price of real estate. Property Taxes: This segment would include many of the property taxes buyers or investors may be challenged with. High property taxes, property purchase tax, capital gains tax, speculation tax… all may be compounded and affect property values negatively. These taxes will not only affect prices, but the overall market activity in certain areas. Generally, taxes play a large deterrent for many real estate buyers and investors, as they can become quite expensive. Shift in Population/Demographics: If a certain location has plenty to offer, such as amenities, industry, infrastructure, natural beauty and opportunities, there will be a desire for residents to settle and remain. This attraction of residents will certainly fuel demand and the upward push of property values. Conversely, if there are economic woes and industries move or close down forcing folks to leave, this will affect property values negatively. There are other factors which may affect the price of real estate in BC and these would include: borrowing interest rates, rent controls, vacancy levels, seasonal factors, public perception, and the type of government party currently in charge. If you are a current homeowner looking to purchase a property or are looking for a private mortgage loan and are located in Vancouver, Surrey, Kelowna, Langley, Victoria, or elsewhere in BC, apply now for a free quote or call us today at 604.620.2697. We’d be happy to help you understand your options. Buying an investment property, whether you're in Kelowna, Surrey, Victoria, Vernon, or elsewhere in B.C., definitely has its allure. For one, Kelowna and the Okanagan are one of the top emerging real estate markets in Canada. On another note, some may opt to invest in real estate further outside of Vancouver such as in cities like Surrey, Burnaby, Richmond, Coquitlam, given the increasing trend of working from home, the perk of more space, and potential for growth as these areas continue to expand. Regardless of city, many have made a fortune in real estate and are financially independent as a result. The real estate market in Canada over the past 25+ years, has created an amazing number of millionaires. Many were created as their primary residence has inflated exponentially in value over the years. Most of these millionaires were created in certain regions within the country, where real estate values have gone up substantially. If you live in the Metro Vancouver or GTA area, you may know that the two primary regions where this has occurred is the Greater Toronto Area and Metro Vancouver. Many of these folks have benefited from tremendous equity build up. As a result, they can leverage themselves and explore many other investment opportunities and use this equity to build their wealth even further. Many use their available equity and leverage themselves further into the real estate market. Ownership of an investment or rental property is extremely attractive to many, and their pursuit relentless in some cases. There are many advantages to starting up your real estate investment portfolio, as well as some disadvantages. All of this is dependent on type of market, geographic location, and many other factors. Is Real Estate a Good Investment? Real estate investing in some cases, perhaps in most, is far more attractive than most other types of investments. If you’re looking to invest in real estate in Vancouver, Surrey, Victoria, Kelowna, or elsewhere in the Lower Mainland, consider the many advantages to doing so in building your wealth. This is due to the main advantages associated with it, which include: Lower Risk Level Real estate has always remained a solid and secure investment. Of course, the risk level is dependent on the geographical area, market conditions, and other factors. However, traditionally it tends to increase in value over time even as the market may go through cycles. Leverage It is far easier to borrow against real estate than other types of liquid assets. Lenders are more inclined to lend on real estate since it is a desirable investment. The market lenders offer many options to the real estate owner should they ever want to borrow against their property. There are lenders for all property types and just about any situations you can imagine. You are the Boss Owning a home puts you right in control of your investment. You call the shots and there is not much experience required. The process itself of owning a home is easy and quite seamless. Most homeowners learn and acquire their real estate skills as they continue to own the property. Homeowners usually only answer to themselves since they are ultimately in charge. Saves Time In most cases, home ownership is a part-time job. Not only is little experience required, but also part-time involvement from the owner. There is no requirement to be involved in a time-consuming process. Home ownership is low activity and usually a turnkey operation requiring very little effort to manage. Build Equity As previously mentioned, real estate tends to increase in value over time. As a result, the owner will build up equity in the property. This increase in value may be leveraged and used for other investments. It provides the property owner with options and recourse to pursue and engage in other investment activities. Income Tax Benefits Unlike other investments, there are far more potential tax benefits available to the property owner. Investments such as stocks, GICs, RRSPs, etc. are all subject to income or investment income tax. There is no opportunity for the investor to try and minimize the income tax paid on these types of investments when realized. Real estate on the other hand, does offer certain tax benefits. For example, the equity appreciation on your primary residence is tax free. Any increase in value in your home is tax exempt. This is a tremendous tax advantage for a homeowner. A property owner may also use expenses incurred on an investment property as a taxable write-off or benefit. This is an example of offsetting and equity appreciation, by the costs associated in maintenance of the asset. There are potentially many other taxable benefits to the property owner. On the flip side, there are a few other sides of the coin to consider as well:
Initial Capital Investment To become a property owner, you must have funds available to apply as a down payment for the purchase. This is a struggle for many, because depending on the market, one may need a substantial amount of funds in securing a property. As you know, it takes time to save money and it is not an easy task. Be prepared to invest a large sum up front to realize your property investment. If you currently own a home in Vancouver, Surrey, Kelowna, or elsewhere in BC, and want to explore your options in pursuing a second or investment property, get in touch with us today. Liquidity is tied up Once you own a property, your resources are then tied up into the property. These resources are committed to the property and cannot be accessed so readily. So be prepared to part with and have your funds sitting invested into your property. This may limit your ability to diversify and pursue other investment opportunities. To create some sort of liquidity, you would have to borrow against the property or sell it. Please keep in mind that a real estate investment can really pin you down financially. Length of Ownership Purchasing a property usually involves a commitment from the owner for an extended period. Having taken on one of the largest financial obligations with property ownership, most are in it for the long haul. As you know, it can take a long while for real estate to appreciate. On the other hand, real estate values can also retreat and slip away with varying market conditions. If values decline, then there is ground to be made up and one might be forced to hang on for far longer than anticipated. Government Regulations Government rules and regulations may also influence the real estate market. Government ultimately calls the shots and can have an extreme impact on real estate values. Realistically, the government owns all the real estate as we know it. Property owners may hold a deed for the land, but the government is the trustee. The government has the power to expropriate, rezone, re-develop, license…. most real estate as they choose. All of these variables may affect the property value. All of the factors mentioned as being an advantage or disadvantage will certainly impact the value of your property. As a result, it is highly recommended that you do thorough research and get expert advice prior to engaging in the purchase of property. Interested in learning more about investing in real estate in Surrey, Vancouver, Kelowna, Victoria, or elsewhere in BC? Get in touch with us today to explore your options. Are you looking for a private mortgage lender to help you get started with investing in real estate? Click here or give us a call today at 604-620-2697 and we’ll get back to you within 24 hours. As the weather gets colder as we move into the winter season, home buying and open houses tend to slow down a bit as families opt to stay indoors. Although some turn to waiting until warm weather comes around to buy a home, others may choose to continue their efforts and buy in the winter due to take advantage of less competition, lower prices, and quicker closing times. Whether you are looking to buy your first or second property in Vancouver or elsewhere in British Columbia, let’s take a look at some positives of buying property in the winter. Less Competition, Lower Prices With more rain and colder weather moving into the holiday season, one positive of buying a property in the winter is less competition. With less buyers all around this time of year, families can take advantage of less competition and may have greater likelihood to have their offer accepted. In addition to less competition for homebuyers, another thing to keep in mind is lower prices. While this typically depends on various factors, potential homeowners may have more flexibility in this regard as there generally aren’t as many buyers during the winter, giving more opportunities for negotiation with the seller. Faster Closing Times Sellers that put their houses on the market in the winter usually are keen to sell as soon as possible. With this in mind - sellers may be motivated to accept an offer and close a deal with as little friction in the process. For buyers, this may mean potential savings if you are willing to negotiate and agree on either a lower price, or a closing date in alignment with both parties’ needs. Moving Companies May Be Cheaper Everyone knows how busy moving companies can get in the last weekend of the month, going into the 1st, with countless people relying on rental trucks and staff to assist in the moving process. Sometimes, these need to be booked several days or weeks in advanced. While booking a moving truck in the winter may be quite easy, it may also prove cheaper as well depending on the company and their rates. What about mortgages? What if my credit isn’t the best?
For current homeowners looking to buy another property this winter, sometimes individuals may face issues with getting approved for a mortgage by the bank. Whether you live in Vancouver, Victoria, Surrey, Abbotsford, Coquitlam, or even up in Kelowna, we’ve got you covered for home equity loan solutions. If you have bad credit and are looking for a mortgage in BC, you may be eligible to access up to 75% of your home’s value in the form of a second mortgage. At Silver Hill Mortgage, we work with private mortgage lenders in BC that focus on your available home equity – not your income or credit. To learn more about your options and see how we can help you access your home equity, get in touch today by clicking here. Looking to get approved sooner? Give Jim a call at: 604.620.2697. If you are currently looking for mortgage financing and live in Vancouver or elsewhere in British Columbia, you will learn very quickly that are so many lenders and sources of mortgage funds out there. There are numerous mortgage options for any and all types of mortgage requests, whether you live in the Metro Vancouver area, on Vancouver Island, or in the Okanagan. Funds for mortgages are available from the major banks to individual private lenders. The competition for mortgage business is great, especially in today’s market, allowing customers to benefit from the many options and competition for their valued business. Because of this, a borrower should do their research before deciding on a mortgage lender to move forward with. Another option would be to take on the services of a mortgage broker, who will effectively maneuver you through the mortgage market maze. A mortgage broker will save you a lot of time and explain in detail the various mortgage products and options available depending on your situation. Brokers can “cut to the chase”, as they specialize in mortgages. After an initial consultation, they are able to pinpoint and narrow down the best finance options quickly and effectively for customers.
Here is a list of the various sources of mortgages available for residential or Commercial purposes that one may wish to consider: 1) Commercial Banks: The primary commercial banks in Canada are:
Commercial Banks typically offer the lowest interest rates, along with special mortgage products and benefits to customers. Commercial banks are usually on top of the list when it comes to the best interest rate discounts and specials. However, their lending standards are strict and the turnaround for getting a loan is far longer than most lenders. 2) Trust Companies: Trust companies are generally the next step down from commercial banks. They are an alternative lender, whose mortgage rates are marginally higher than banks, and their loan guidelines are more flexible. Further, they may charge a small fee for arranging the loan called a lender fee. This lender fee is usually .50 – 1% of the gross loan. This fee is charged in addition to interest rate. 3) Credit Unions: Another option to getting cost effective mortgage financing is through a credit union. Credit unions offer a full range of bank services. They cover off everything from loans of all descriptions to various types of accounts such as saving, checking, etc. Their interest rates compare with bank rates in most cases. Credit unions are non-profit, so they often have lower fees than traditional banks. Credit unions are community oriented, offering fast and personalized services to their customers. 4) Mortgage Investment Companies: Mortgage investment companies are non-bank lenders who provide creative financing solutions. They mainly cater to customers who have poor or damaged credit, and little or no income to show. They take on riskier loans and are primarily an equity lender. They put a bulk of the weight for approval on the type of real estate and the amount of equity available to lend on. Their rates are much higher that banks, credit unions & trust companies. They are a flexible lender with far fewer lending guidelines, but all at a higher cost than most market lenders. They also charge a lender fee for their services. Lender fees can start as low as .50% of the gross loan and go up from there. 5) Private Lenders: Private mortgage lenders are individual people who lend their own funds for mortgage financing. Private lenders are private individuals who could be a friend, family member, acquaintance, etc. Private mortgage lenders are usually very flexible and determine their own lending guidelines. They are great to work with one on one, as they call their own shots, since it is their money. Their interest rates are higher than most lenders, and they may charge a fee for the loan in addition to. Turnaround for approval and funding with a private lender can be quick. This is because they have far fewer guidelines, and the buck stops with them. 6) Vendor Take-Back mortgage (VTB): A vendor loan is when the seller of a property extends a loan to buyer to help secure the sale of the property. This happens when the buyer does not have enough resources to close on the sale of a property. If down payment & the approved 1st mortgage of the buyer is not enough to cover the price of a piece of property, there will be a shortfall. The seller may carry back a loan in the amount of the shortfall, so the buyer can close on the sale. This will ensure that there are enough funds to complete on the sale. The vendor loan in this case would be a 2nd mortgage secured against the property, right behind the 1st mortgage. The vendor loan would be registered in favour of the seller, yielding interest to the lenders benefit. The details of the vendor loan are usually negotiated directly between the seller and purchaser. 7) Assuming an existing mortgage: Another option to getting a mortgage when purchasing a property, is to assume the existing mortgage on that property. You may legally take over a mortgage by assuming the original loan. In order to do this, you must meet the lenders requirements. That is that you would have to fully qualify under the lender’s guidelines. Further, you would have to carry on with the existing rate and loan provisions if you assume the loan. If this is an option you might be considering, you must ensure the loan is assumable, and get proper legal advice as to your legal obligations under the original loan. 8) Reverse Mortgage: A reverse mortgage may be an ideal loan option for seniors who have plenty of equity in their home. The equity in the home may be used to get a loan called a “reverse mortgage”. Unlike regular mortgages, there is no repayment required from the borrower until they pass away, or the home is sold. This allows the borrower access to funds without having regular monthly mortgage payments. The borrower can decide if they want the loan in one lump sum, or disbursed in set up intervals. It allows folks to hold on to the ownership of their home and have funds available for their day to day. The costs associated with reverse mortgages is often higher than most other alternatives, but it offers definite advantages to the elderly, who would not typically qualify for a bank loan. As you can see, there are many options to pursue for mortgage financing. It would be strongly advised that one should seek out the services of a mortgage broker to better understand the options best suited for a borrower. If you’re a current homeowner looking to explore your mortgage options, get in touch with us for a free quote today: 604.620.2697. Struggling to keep up with bills and financing your lifestyle? Then you’ll want to know more about second mortgages. A good place to start is to learn about the myths about getting a second mortgage. Like most financial options, there are some myths surrounding second mortgages that often arise when homeowners explore this option. We have debunked those myths for your convenience - let’s take a look!
1. Second Mortgages Are Only For People That Are Out of Options The first myth to debunk is the notion that second mortgages are only for people that are out of options. This is a pure myth because, in order to qualify for a second mortgage, you have to own a home that has enough equity available to borrow against. Most people that are running out of financial options don’t own a home. You should be proud of the fact that you own a home and have enough equity to borrow against. Even if you're not in a tricky situation, and looking to simply tap into your home equity to finance a new home renovation, or to help with the purchase of a new home, a second mortgage can help with just that! 2. Second Mortgages Are Complicated One of the most common myths about second mortgages is the claim that they are extremely complicated. This is not true. In concept, a second mortgage is extremely simple. If you own a home and you have a substantial amount of equity available, you can convert that equity into cash. You can choose to receive the money from your second mortgage in a lump sum or in monthly payments, depending on your lender. In any case, trusted professionals like the team at Silver Hill Mortgage can walk you through the process and answer any questions that you might have. Not sure how much equity you have? Take a look at our Home Equity Loan Calculator to get an estimate! 3. You Can Only Use the Money From a Second Mortgage for Certain Things Perhaps one of the most misleading myths about second mortgages of all is when folks claim that you can only use the money from a second mortgage for certain things. You should know that there are no restrictions whatsoever as to how you can spend the money that you receive from a second mortgage. It’s your home equity - which means you can use the money for anything you wish, whether it be for debt consolidation, new home renovations, business capital, or even medical emergencies. If you are purchasing or refinancing, a second mortgage can help with providing the funding you need for that as well. Get Your Second Mortgage From Silver Hill Mortgage, No Tricks, No Myths, Just a Great Deal! Now that you know more about the myths about second mortgages, you’re ready to take advantage of this unique financial option. Silver Hill Mortgage specializes in helping families across Vancouver, Kelowna, Victoria, and the Lower Mainland take advantage of second mortgages and tap into their home equity. Want to turn your equity into cash? Then give Silver Hill Mortgage a call, we’re ready to help! Talk to Jim today at 604.620.2697. Having a hard time paying the bills? You’re not alone - the COVID-19 pandemic has put millions of people out of work unexpectedly, and has created financial hardships that many can resonate with. With changes in restrictions happening every so often, the uncertainty surrounding business operations and job security is nothing new. You worked hard to get where you are today and become a homeowner, whether that be in Vancouver or elsewhere in the Lower Mainland. With the ongoing pandemic thrown in and bills piling up, it may sometimes seem like a daunting task of staying afloat and keeping things in check. What do you do when you’re struggling to keep up with the bills and almost out of options? Here’s what you need to know about second mortgages and how they can help you find a way out. What is a Second Mortgage? First thing’s first, what is a second mortgage anyway? A second mortgage, also known as a home equity loan is a special kind of financing option for homeowners in Vancouver. When you take out a loan, there’s usually some kind of collateral that’s put up to secure the loan. Sounds familiar right? Well, when you take out a second mortgage, you’re essentially borrowing the money you need at this time against the value of your property. Essentially, you’ll be using your property as collateral to secure the loan - that’s how a second mortgage works. What Can You Use the Money From a Second Mortgage For? Some loans are very particular about what you can actually use the money that you’re borrowing for. When you take out a second mortgage from Silver Hill Mortgage, you have a tremendous amount of freedom in terms of how you can use the money. Common reasons for folks taking out a second mortgage include things like paying unexpected bills that may come up, financing a large family expense, or paying for your children’s education. Life happens, and when it does, Silver Hill Mortgage is there to support by helping you access the money you need to get through these challenges with a home equity loan. For example, medical problems can occur at any point in time which is what makes the resulting expenses so unexpected. While you’ve been saving away for your son or daughter’s education fund, you may have had a loved one fall ill which requires costly medical care. Sometimes you might not have the funds to address unexpected bills, in which case you can take out a second mortgage to help put yourself back on track financially. Alternatively, many people use money from home equity loans to make improvements to their home and finance renovations. Folks with growing families who don’t want to move right away can use the money from a second mortgage to renovate their home to suit their needs. ![]() How Does a Second Mortgage Work? Now that you know more about the basic principles of second mortgages and what you can use the money from them for, let’s take a closer look at how they work. Everyone will have a different scenario, but the principles remain the same. That is to say, if you bought a home, you may be able to access up to 75% of its value, less the amount owing on your mortgage, in the form of a home equity loan, or second mortgage. What does that mean for you? Check out our Home Equity Calculator to get an idea of your available equity. Unlike factors like income, the amount that you can qualify for under a second mortgage ultimately depends on how much equity you have to borrow against. To learn more about borrowing using your home equity, click here. The Advantages of Taking Out a Second Mortgage Second mortgages have many key advantages to offer, and if you use the money that you borrow wisely, you can end up doing better than ever. For one thing, the fact that there are no limits as to what you can use the money for is a huge advantage. It’s your equity which means you can use it any way that you want. If you want to use that equity to finance a college or university education for your children, then by all means, do it. Likewise, if you want to use that hard-earned equity to buy yourself a new car for the family, you can do that too. That’s the kind of freedom that a home equity loan from Silver Hill Mortgage can help you achieve. The list of advantages doesn’t stop there, second mortgages also tout lower interest rates than credit cards. One of the most common mistakes people make when they need cash fast is to charge everything to their credit cards until they’re all maxed out. When you max out all of your credit cards to conquer an unexpected expense like a medical emergency, you’ll be paying through the roof in interest on those cards. If you had gotten a second mortgage instead, you’d have a much lower interest rate on the loan than you’d find with any credit card. Another advantage of second mortgages is the fact that you can typically borrow up to 75-80% of your equity. If you added up the total credit limit between all of your credit cards, you might be able to get a few thousand dollars. With a second mortgage - you can qualify for much larger amounts. It is important to note that the experience you’ll have taking out a second mortgage largely depends on who you work with. Have a question about second mortgages and live in the Lower Mainland? Get in touch with us and we’d be happy to chat. Find the Silver Lining with Silver Hill Mortgage Ready to take charge of your financial future? Then you’re ready to have a chat with us at Silver Hill Mortgage. We understand what it’s like to fall upon hard times, and that’s why we have such a strong reputation for helping people through similar situations. If you think a second mortgage might be right for you, give Jim a call at 604.620.2697 to answer any questions you might have about getting started. |
Silver Hill BlogJim Horvath is the principal broker and director of Silver Hill Mortgage Corp., arranging mortgage loans for over 25 years. Archives
February 2023
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