 With portions of the economy severely slumping and job uncertainty looming as the COVID-19 pandemic continues, it may be tough for some to maintain their monthly financial obligations. Imagine if you could no longer pay your rent or mortgage payment, for whatever reason. The uncertainty of what to do may be very crippling and overwhelming for anyone, whether you live in the city like Vancouver, or out elsewhere in the Lower Mainland. Simply maintain the terms of the mortgage and payments as agreed with the lender, and you will remain problem free. However, if the terms are not met and payments are missed, the lender may exercise a number of actions against you to save their security. A number of factors may trigger a default of your mortgage. These include:
 What are my options? There are several options for borrowers when in default. If a borrower is having difficulty maintain their mortgage payments, there are many options to consider, depending on your situation. These include:
It is best to always remain connected with the lender and reassure them that you are trying work out a solution. You want to avoid getting into a situation where you may be headed towards foreclosure. Mortgage foreclosure is costly and the last thing any lender wants to do is re-possess the property or force a sale through foreclosure. Lenders Options When in Default:
If a borrower has exhausted all of the possible options and still unable to stop default, the lender has options they can exercise and help remedy the situation. The lender will try and work with the borrower to remedy the default, but if all fails, the lender may:
If ever you are in a vulnerable financial situation and may default on a loan payment, the best advice is to contact the lender. Reach out to the lender well in advance of the payment due date and notify them. Let them know that you are going through rough waters, and that you want to make things work and ultimately find a solution. The worst thing to do is to remain silent and ignore the lender and your responsibility. Also, you may contact a mortgage broker, who will outline the options available to you. Needing help with your mortgage or have questions about your options? Give us a friendly call today at (604) 620 2697 and we’d be happy to help out!  For those in BC who are actively looking to purchase property, whether it be for personal use or as an investment, it is more than likely that you will need a mortgage to do so. Unless you have the means to pay for the property in full, you will need to borrow a portion of the funds when you decide to purchase. Prior to this important decision, there are several key factors you must consider to ensure that the mortgage is right for you. Since you are taking upon yourself the single largest financial obligation in your life, you want to be certain that the loan you decide to take on meets your needs.
We’ve whipped up a list of terms you to keep an eye out for to take into consideration when entering into a mortgage agreement: Interest Rate & Compounding Period: Most consumers look to the interest rate as the determining factor when making their decision on a mortgage. It seems to register as the one single cost and obsession associated with borrowing money, and this pretty much makes up most people’s minds. The interest rate is extremely important, but as you will see it is not the only cost of the loan, and there are other important considerations. Mortgage interest rates are calculated as either a fixed or variable interest rate. A fixed interest rate will do just that, it will remain constant for the term of your loan. In other words, your interest rate will stay the same each month, as will your mortgage payment. The variable rate means that the interest rate may change each month, as the rate is variable or as referred to as a floating rate. Any potential variable rate movement may be caused by the lender adjusting their prime lending rate. Rate changes by the Bank of Canada or changes in economic conditions may set off variable interest rate changes. Even though your monthly mortgage payment would stay the same with a variable rate mortgage, the amount allocated towards principle and interest of the payment, may be adjusted. If the variable rate goes down, you are paying off more principle and less interest with each payment, and vice versa. The second item you want to know about the interest rate, is the compounding period. In other words, the interest charged on the interest owing, will determine the total amount of interest that you pay on your mortgage. The more frequent the compounding period, the more interest you will pay. It is important to verify the compounding period of your mortgage, as this can potentially save you thousands. Length of Mortgage: The length of the mortgage usually refers to the term, or length of time the lender will lend you the funds. The term of a mortgage may range from 6 months to 10 years and beyond. At the end of each term, the unpaid balance of the mortgage and interest become due and payable. Typically, the lender will send a renewal notice to the borrower at the end of the mortgage term. The renewal period will allow you the opportunity to renegotiate another term with the current lender, or the option to go and search out a new competitive lender with more favourable terms. The term of the mortgage should also be an important consideration. You must determine how long you are willing to commit to an agreement with the lender, all things considered. Amortization Period: Amortization is the length of time over which the mortgage payments are calculated & spread, based on the assumption that the mortgage will be fully paid over that period. Most mortgages are amortized over a 25-year period, but this can vary. In some cases, you may request an amortization which works best with your budget. You may insist on paying the mortgage down quickly and so want a short amortization, or you might want to keep your payments to a minimum and so a longer amortization will work best. Not every lender is amortization flexible, so you should certainly ask the lender about their options regarding the amortization of their loans. Open or Closed Terms: Open mortgages allow for plenty of flexibility to the borrower. It allows you to pay off or pay down the mortgage without any limit, penalties or extra costs. Also, you may up the monthly payment at any time and pay the loan down faster as you wish. A closed mortgage locks you into the term for a fixed period of time. You may not pay the loan off or down as you wish, without being subject to a potential interest penalty. The costs to pay out a closed mortgage can be extremely expensive. Some lenders will charge the greater of a 3-month interest penalty or an interest differential investment rate, as a prepayment penalty of a mortgage. In some cases, the lenders will not allow payout of the mortgage unless the house is sold. It is super important to learn the costs associated with the closed terms of the loan with the specific lender. Payment Frequency: The mortgage payment frequency schedule has many options available. Lenders will offer weekly, bi-weekly, and monthly payment options. As you know, the more frequently you make mortgage payments, the lower the amount of interest that you will be paying and the faster you will pay off your loan. You will need to make for certain which payment frequency works best with your pay schedule and lifestyle. This is because it is not possible to switch up payment frequencies in the middle of the loan term. Therefore, make for certain you are comfortable with the loan payment frequency. Pre-Payment Privileges: The prepayment privilege you must investigate if you have decided to take a closed mortgage term. An open mortgage is not bound to any limitations and may be paid down or out without any penalty, anytime. With closed mortgages, your hands are somewhat tied when it comes to prepaying the loan. Closed mortgages permit prepayment in a certain manner and at certain stages of the loan. As a result, you may be permitted to prepay the loan by a preset percentage of the total loan each year. In other words, the lender may only allow the loan to be paid down by a maximum of 10-20% annually. Additionally, the mortgage payment may only be increased by a set percent each year as well. As you can see, there are limits set out by the lender reducing the loan flexibility, unlike the open mortgage. One can understand the unbelievable difference this would make in terms of saving on interest and reducing the amortization period. Every time a prepayment is made, or every time you increase your monthly payments, the balance outstanding and the monthly cost of interest is reduced. Prepayment options should be seriously looked into as it can save you thousands. Assumability: Assumability references that the buyer of your property will take over the obligations of the mortgage you are currently in. Not all mortgages are assumable, and each mortgage contract will specify an option for a potential buyer to assume. Most lenders would prefer to be paid out in the event that a property is sold, but many lenders do have clauses in their loans, indicating that the mortgage is assumable upon qualification. Portability: Mortgage portability is a feature that if you sell one property and purchase another while you are in the middle of your mortgage term, you can transfer the mortgage to the new property. You may consider this when you have a low interest rate and wish to maintain it, as you move on to a new property. Also, if the loan and terms you currently have are pleasing and advantageous to your situation, you would want to port to the new property. Again, the portability feature is dependent on the new property qualifying to the standards of the lender. Closing Costs: Closing costs are the fees associated with getting a mortgage. In most cases, the cost of getting a mortgage through a bank will include lawyer costs, appraisal fee & taxes. These are pretty standard for any bank mortgage. You will be responsible for the cost of paying a lawyer to review the terms of the loan, and the cost of getting the property appraised. However, if you need a personal loan or mortgages services from B-Lenders or private mortgage lenders in BC, there may be additional costs such as a lender fee and mortgage broker fee. Additionally, you would be responsible for the private mortgage lenders’ legal fees. The costs associated with B-Lenders & private hard money lenders may become extraordinary. It is best to obtain the services of a mortgage specialist, so they can discuss your information and determine how you can benefit from the numerous mortgage options available to you, leveraging the many lenders in the marketplace. Whether you are looking for hard money lenders in BC, bridge loans, a home equity loan, or simple advice to weigh out your options, give us a call today and we’d be happy to engage in a friendly conversation.  There’s nothing more discouraging than being declined for financing by a bank, especially when you have people counting on you at home. We’ve all been there, one minute you’ve got everything under control, next minute you’ve got a pile of overdue bills and a steep mortgage payment with no solution in sight. If you’re in this situation, don’t panic, there is a solution, it’s called B-Lending. Here’s what you need to know about the benefits of B-Lending and how it can help you climb out of a very dark hole with your pride intact.
B-Lending 101 When you’re stressed out and you've just been declined by a bank, you might find yourself willing to try anything to fix the problem. At this point some people start making bad decisions like seeking money from a short-term lend or applying for a payday loan. These types of loans can be ruinous and most of them are designed to make things even worse. The risk, like the interest rate, is exceptionally high. B-Lending on the other hand, is comparatively less risky and more advantageous. It’s the perfect balance between the bank loans that you can’t get and the short-term loans that you shouldn’t get. B-Lending refers to subprime loans which are loans that you can qualify for even if you have bad credit. This is your way out, B-Lending can give you the big break that you’ve been looking for and help you take control of your life. Mortgage Lending Vs. Borrowing From a Bank People living in Greater Vancouver and the Lower Mainland that need access to funds for any reason from financing renovations, a large or unexpected expense, purchasing a second property, consolidating debt, for emergency purposes, etc. can benefit from private mortgage lending. Compared to a financier that offers private mortgage and home equity loans, banks are much more strict. A bank’s qualification requirements are comparatively much more rigorous and people who are already struggling financially are typically denied access to additional funding. Overall, there are some pretty spectacular advantages to private mortgage lending, especially for borrowers that are self-employed, have bad credit, or both. Let’s take a look at some of the most popular and advantageous finance options that mortgage lending makes possible for the people that banks have unceremoniously turned away. The Advantages of Home Equity Loans When you can’t make the payments on multiple debts and the walls are closing in, a home equity loan can be your new best friend. These loans can be used to free up cash that’s tied up in the value of your home. That’s cash that you can use to dig your way out, not to mention, you’ll get a substantially better interest rate! For example, say you’re self-employed with an auto loan and a few credit cards. Due to a family emergency you run up the balance on your credit cards until you’re overextended, then business slows down, you’re not taking as much money in as usual and the bank is itching to take both your home and your vehicle away from you in one fell swoop. Now you’ve got a right financial mess with multiple payments and no money to pay them. What do you do? The smart thing to do in this situation is to apply for a home equity loan from Silver Hill Mortgage. A home equity loan works like this - you borrow money against the value of your property and use it to consolidate all of your outstanding debts into one neat little loan with a better interest rate. You’ll have one loan, one payment, and a lower interest rate, it’s that simple! How Second Mortgage Loans Can Save Your Skin For folks who've got their backs pressed up against the wall and are struggling to keep up with the high payments on their mortgage and other debts, a second mortgage just might be the solution you’ve been looking for. A second mortgage is kept separate from your original mortgage as an independent loan. You can leverage a second mortgage to access up to 75% of the value of your home. People who are struggling to keep up with their mortgage payment and are facing the brink of foreclosure can solve all of their problems at once with a second mortgage from Silver Hill Mortgage. Taking out a second mortgage can help you avoid defaulting on your original mortgage and subsequently skirt the blood-curdling penalty fee. If you’re self-employed, odds are you’ve had trouble getting approved for any additional financing from a bank. They tend to be rather stingy that way. Mortgage lenders like Silver Hill Mortgage aren’t so stingy, we value your business and we work with people that are self-employed or have bad credit. Welcome to Silver Hill Mortgage, Where Your Financial Needs Are Met Silver Hill Mortgage Corp. provides private and institutional mortgages for distressed homeowners who have been declined by a bank. These loans can be issued for virtually any purpose, circumstance, or property type. Silver Hill Mortgage works with customers all across the beautiful province of British Columbia (from Victoria and Nanaimo, to Kelowna, Abbotsford, and the rest of interior BC) and specializes in private mortgage financing solutions. Unlike banks we don’t pressure our customers, we have the knowledge and integrity to serve you better and help you achieve your financial goals. The bank didn’t want your business, but we do, and we’ll earn it! If you’re running out of options and need to get your hands on some capital on the quick, get in touch with us at Silver Hill Mortgage. Life is too short to succumb to the stresses of finance - we’re here to help. Tired of getting rejection letters from the bank and staring at piles of overdue bills? It’s time to call Jim at 604.620.2697 - help is just a phone call away!  With the ongoing COVID-19 crisis, many Canadians have been greatly impacted by the financial stresses it has caused. As you know, many jobs have been lost and, in some cases, businesses have been completely erased. Financial setbacks and ruin are so common and such a reality each day, and sometimes banks and financial institutions only have so much wiggle room to assist. If you try and get their help, it is a pressing uphill battle to meet their requirements. The loan qualification process through a bank is tough enough on the best of days, but with COVID-19 compounding problems, one can only imagine how much more difficult the process has become. As a result, in many cases they might not be able to help as quickly as needed. Homeowners in the Lower Mainland presently are finding it extremely challenging trying to get mortgage financing through banks and other various institutions. Trying to refinance your existing mortgage or getting a new mortgage altogether seems almost impossible. The banks have tightened the rules and use overkill scrutiny with each loan application. Any little blemish on your credit report can spell certain rejection. Your Income amount, type of employment and time at your job will also greatly impact your chances of getting the loan. With the unemployment numbers rising, lenders are getting extremely concerned about repayment ability. As you can see, sadly the current situation is a mess for all parties involved.  There are options out there for homeowners needing help but cannot qualify for bank mortgage. Various B lenders and private sources are available. Many of these lenders are open for business and have flexible mortgage terms. They are ready, willing to engage and help with most home equity loan requests. They are easy to deal with and very receptive to connect and build a relationship with the client. These lenders use a make sense approach with each mortgage request. They are equity lenders for the most part - so they allocate more value and merit in your available home equity, unlike the banks. They place far more of their mortgage approval decision on your available equity. Income and perhaps credit will factor in on a far smaller scale, but they are necessary components to help with the lenders mortgage approval.
Here are some of the benefits in considering alternative mortgage financing, such as home equity loans funded by private mortgage firms and investors. Easy to Qualify – So easy. In most cases, your available property equity will dictate the terms of the loan. If you have equity, the private lender can help. The basic requirements are a completed application form, appraisal report of the property, title inspection, credit bureau review and a comfort level with the borrower’s ability to repay. Flexibility – The private lender will review the application personally and can tailor the loan to the specifications for the borrower or their situation. The lender will work with the borrower to try and best satisfy the loan request. They lend on all property types regardless of location. – They will lend on houses, condos, farms, raw land, commercial properties, recreational properties, leasehold properties, remiated marijuana grow-operations, bridge loans… just about anything. They finance those with credit and income issues – bad credit or no credit, little to no income, a mortgage loan solution is still an option. They finance all loan request types; construction loans, partial interest ownership, education /medical expenses, debt consolidation, renovations, anything important to you. Quick Fundings – They have the ability to fund loans in a short period of time without hesitation. They can adjust the timeline to processing the mortgage loan request and ultimately getting funds. They have the ability to control the entire loan process from start to finish, Emergency help – they are able to act quickly in times of despair. If you are experiencing difficulties pursuing a home equity loan during this pandemic and need help or some direction, you should contact a mortgage broker. The mortgage broker will review your situation, lay out the potential options and secure you the help you need. To have a friendly phone call today to discuss your situation and see your options, get in touch with Jim at 604-620-2697.  Thinking of buying a rental property? Congratulations on discovering the best way for smart investors to secure and grow their money. Rental properties represent an avenue to invest in a long-term asset, allowing you to generate monthly income. It has many advantages over stocks, gold, commodities, and cryptocurrencies. It is tangible and resilient against a lot of the shocks that stocks and mutual funds are vulnerable to. At the same time, however, investing in real estate is not a walk in the park. There are potential pitfalls that first-time property investors need to be aware of if they are to make the most of their investments. And one of the most challenging areas for would-be real estate investors is financing. Getting a mortgage for a primary residence is very different from a mortgage for a rental property. Today we will dive into helping you understand the key things you need to know when applying for an investment property loan.  Do you qualify? What do traditional lenders look at before they decide to approve or to decline a loan application? They look at a combination of the person's financial capacity and their money management abilities. The factors they may consider include:
 Financing Options Along with conventional mortgage loans, investors have other options for financing the purchase of their second property:
 Types of Investment Properties
In addition to the qualification criteria listed above, the type of investment property an investor is planning to purchase is essential as it determines what their financing will look like. There are two types of investment properties:
Down payment Since 2010, the down payment required for investing in a rental property in Canada is 20%. For owner-occupied properties with 3-4 living units, the accepted down payment may be as low as 10%. If the home has only two units, the down-payment for owner-occupied homes goes down to 5%. But if a property is non-owner-occupied, regardless of whether it has 2 or 4 units, the down-payment is 20%. Additionally, non-owner-occupied homes have a maximum loan-to-value (LTV) ratio of 80%, versus 90%-95% for owner-occupied properties. Amortization periods Investors who make a down payment of less than 20% can expect an amortization period of 25 years. But if they down put 25% of the property value or more, they qualify for an amortization period of 30-35 years. This is regardless of whether the property is owner-occupied or not. More extended amortization periods mean lower monthly payments, but more interest is paid over the loan's lifetime. But a more extended amortization period is a plus for rental property owners because interest payments are tax-deductible, and it lowers the monthly carrying costs on the property. Finally, one of the best things you can do for yourself, as a first-time rental property investor, is to find a mortgage broker who has experience with investment properties. An experienced broker will help you navigate the inroads of investment property financing and ensure you get the best rates available in the market. To learn more about how to leverage your home equity to buy a rental property, have a friendly call with Jim today at 604.620.2697.  As the COVID-19 pandemic continues to affect various aspects of our lives, many homeowners in the Lower Mainland and on Vancouver Island are faced with countless challenges navigating through this uncertain time and keeping up with everyday expenses. Some homeowners in BC have had their home improvement projects and renovations placed on pause due to a reduced cash flow, while others are struggling with keeping up with credit card payments and managing other consumer debt. Whatever tricky situation you are in, it’s important to truly understand and evaluate your options in order to get your life back on track. If you are a current homeowner in British Columbia - whether that’s Vancouver, Burnaby, Surrey, Victoria, Kelowna, Abbotsford, or elsewhere in the Lower Mainland, you fortunately may be able to access your home equity to consolidate your debt or address a financial emergency you may be facing as a result of COVID-19. Home Equity Loans For current homeowners looking to free up extra cash to consolidate their debt, continue a renovation on their property, or simply ease any financial burden you may be experiencing due to the COVID-19 pandemic, a home equity loan is an option worth considering to help you get back on your feet. A home equity loan is typically funded fairly quickly provided you have the available equity in your home. In most cases, you may be eligible to access up to 75% of your homes value for a home equity loan in BC with Silver Hill Mortgage Corp. A home equity loan can be used for almost anything, though they are often used to help finance the purchase of another property, or for unexpected expenses and emergency situations that arise. These home equity loans can be administered by the traditional banks, or by private mortgage brokers in BC who work with private mortgage lenders that may be able to help you access more favourable rates and find a solution unique to your situation. Even if you have been declined by a bank in the past, or have poor or bad credit, our team at Silver Hill Mortgage Corp. works with private mortgage lenders in the Lower Mainland to arrange a B-Lender mortgage solution to best fit your circumstances. If you’re in the midst of a financial emergency because of COVID-19, worried about foreclosure, looking to pursue debt consolidation, or simply need to access extra cash but have bad credit - a home equity loan may be able to help you in your situation. Refinancing Living on Vancouver Island or in the Lower Mainland, and looking to replace your current mortgage loan with a new one? You might be able to qualify for a home equity loan that’s higher than your current loan balance. We work with you one-on-one to understand your personal financial and homeowner situation in order to help you evaluate your best options when looking to refinance. We base your loan approval on your available home equity, not your income or your credit like traditional banks. If you’re unsure of your available home equity and live in BC, use our home equity loan calculator or get in touch with us to discuss your options today with a free, no-obligation consultation. Contact Jim Horvath today at 604.620.2697 for a friendly conversation.
 Home equity loans allow homeowners in Metro Vancouver and the Lower Mainland access funds for any reason, quickly and easily. In fact, it is a fast and simple way to access a large sum of cash to help with: * Consolidating Your Debts * Paying outstanding property / income taxes * Home Renovations * Business Capital * Unexpected Expenses A home equity loan is a loan secured against your property, behind your first mortgage. It represents an additional loan which is usually smaller than your first mortgage and based on your available equity. A home equity loan will permit you to borrow against the property’s value, less any mortgage owing on the property. The equity in your property is the difference between the current property value less the balance of your first mortgage. Of the available equity, only a certain percentage may be utilized for an equity loan. In most urban areas, you may obtain an equity loan up to potentially 75% of the value of the property. Since many home equity loans are offered by Private or a B-Type of Lender, there will be costs to the borrower for getting the loan. Unlike the banks who typically absorb many of the mortgage setup costs for the customer, the private lender industry does not. There are far more costs associated with a home equity loan passed on to the borrower, however this also means that you can access funds quickly and easily.  The typical costs you may anticipate with your home equity loan are as follows:
Appraisal Fee: This is the cost of having your home evaluated by a certified property appraiser. The lender needs to know the current market value of your home. It is the duty of the mortgage broker to order the report, and that cost is the responsibility of the borrower. Once the appraisal is ordered, the firm will reach out to the borrower and arrange for an appointment and payment. The appraisal is usually the one up front expense to the borrower. The appraisal may take up to a week to complete or sooner, in most cases. Once complete and the payment has cleared, the finished report is released to the lender for review. An average home appraisal costs around CAD $275-$450 + tax in most urban areas like Vancouver, Surrey, Burnaby, and the tri-cities. The fee is determined by the property type such as strata, rental, single family, high-end home… Lender Fee: In some cases, the lender may charge a lender fee in addition to the interest on the loan. The lender fee is used to offset any administrative costs of the lender. The lender fee may be used by the lender to compensate the mortgage broker for the loan application. The lender fee may also be used to gross up the lenders yield on the loan investment. In other words, the lender may offer a very low rate to the borrower, then charge a lender fee to make up for his desired return on investment. When a lender fee is warranted, it is negotiated upfront and disclosed to the borrower. The lender fee is added, or “grossed up” onto the desired net loan amount for the borrower. The lender fee is deducted from the total gross loan at funding and submitted to the lender. Mortgage Broker Fee: When a lender does not compensate the mortgage broker, the broker will then charge a fee for the work they put into the file. This fee represents payment for all of the time, efforts and legwork of the broker. From start to finish, the broker processes the application, hunts for the perfect lender and streamlines the entire process for the borrower, up to funding. The mortgage broker negotiates on the borrower’s behalf with the lender, coordinates the loan documents between lawyers and maintains government compliance as a licensed mortgage broker. When a broker fee is warranted, it is negotiated upfront and disclosed to the borrower. The mortgage broker fee is added, or “grossed up” onto the desired net loan amount for the borrower. It is eventually deducted from the total gross loan at funding and submitted to the mortgage broker. Lender Legal Fee: The borrower is also responsible for the costs associated with preparing the mortgage documents. The lender’s lawyer will prepare and legally execute the mortgage papers, at the cost of the borrower. The lawyer fees are passed on to the borrower are also deducted from the gross loan. These fees are disclosed up front to the borrower for review along with the other loan costs. The average lender legal fee can range from CAD $750 - $2,000+, although these figures are approximate. The nature of the loan and subject property will determine the true lender legal cost. Borrower Legal Fee: The borrower will need a legal representative to review the loan papers and give their opinion and independent legal advice about entering into the loan agreement. Therefore, the services of a lawyer or notary are required, another cost to the borrower. It is important to have a professional to protect your best interests. The average lender legal fee can range from CAD $250 - $450+, approximately. Application Fee: There are a few private mortgage companies who will charge an application fee as one of the loan set-up costs. The application fee may cost CAD $200-$300 and is meant to offset any administrative expenses of the lender. These costs would include requesting documents from the land titles office, reviewing application details, processing and preparing approval papers. The application fee is disclosed to the borrower up front, and is added to the net loan, such as the lender and mortgage broker fees. Commitment Fee: Many private lenders will also ask for an upfront setup or commitment fee from the borrower. Once the loan offer is disclosed to the borrower and they are happy with the terms, an up-front commitment fee is usually asked for from the borrower. The lender will want to ensure the borrower is committed to moving ahead with the loan. The commitment fee will be applied towards the preparation of loan papers by the lenders lawyer. This amount will be credited towards the total lender legal fees, which the borrower is responsible for. The average commitment fee can range from CAD $500 - $2,000+ approximately. The nature of the loan and subject property will determine the true lender legal cost. Default Payment Fee: In the event the borrower misses a mortgage payment, there will be an NSF administrative penalty cost. The missed payment fee is noted in the mortgage documentation. Cancellation of Home Insurance Policy Fee: If the borrower cancels the home insurance policy on the subject property, the private lender may charge a fee to ensure the insurance is reinstated. The cancellation of home insurance fee is noted in the mortgage documentation. Mortgage Discharge Fee: This is the small cost the borrower pays when the mortgage is paid out and discharged off of the title. This fee is paid to the Land Titles Office so they remove the loan off of your property title. In some cases, there may be a small fee charged by the lenders lawyer for processing the mortgage discharge. Renewal Fee: Many private lenders will charge a renewal fee when the mortgage comes up for maturity. This fee covers any administrative costs in processing the renewal. The renewal fees can range from a set fixed dollar amount or a certain percentage of the outstanding balance at the time of maturity. The percentage range can be anywhere from .50% - 2.25% of the outstanding balance at maturity. The renewal terms will be disclosed and note in the loan paperwork. Please note that the above represents some of the fees and costs which apply to home equity loans & private mortgages. It’s important to ensure you have full disclosure and understanding of the costs associated with your loan. These are the reasons the services of an experienced mortgage broker should be used. They will walk you through the entire loan process safeguarding your best financial interests. Have any more questions? Feel free to get in touch here.  Needing a home equity loan in Vancouver, Burnaby, Surrey, or elsewhere in the Lower Mainland? Renovating your home in Kelowna, but needing the funds to begin? Whether it's consolidating your debt or expanding your business, applying for a loan against your home equity can provide so many benefits. Home equity loans can be secured easily and quickly to help you with the following: + Consolidating Your Debts + Paying Property or Income Taxes + Home Renovations + Expanding Your Business + Anything You Need or is Unexpected! What exactly is an equity loan, and how do I get one in Vancouver (or elsewhere in B.C.)? An equity loan is typically a loan secured against your property, behind your first mortgage. It represents an additional loan which is smaller than your first mortgage and based on your available equity. An equity loan will permit you to borrow against the property value, less any mortgage owing on the property. The equity in your property is the difference between the current property value, less the balance of your first mortgage. Example: Property Value: $500,000.00 less 1st Mortgage: $300,000.00 Equity: = $200,000.00 Of the available equity, only a certain percentage may be utilized for an equity loan. In most urban areas, you may obtain an equity loan up to 80% of the value of the property. This percentage of the value of the property is called the “loan to value – LTV” ratio. It is a number that lenders use to determine the level of risk they are taking on when lending on a secured loan. Example: Property Value: $500,000.00 x 80% (LTV Ratio) = $400,000.00 less 1st Mortgage Balance: $300,000.00 = Maximum Equity Loan Available: $100,000.00 For existing property owners in Vancouver, Burnaby, or other cities in B.C., the equity lenders' LTV ratio will vary depending on the following factors:  Location of the Property As the property location becomes more rural, the LTV ratio is reduced accordingly. The more remote the property, the smaller equity loan.  Property Type Depending on whether the property is residential, owner-occupied, rental, commercial, or recreational will also influence the LTV ratio.  Current Mortgage Details
Equity lenders will request to confirm what is currently owed, to whom, and under what conditions. Equity lenders are more inclined to lend in behind an institutional 1st mortgage, as opposed to a private or non-traditional 1st mortgage. This seems to be an industry standard and may affect your chances of getting a second mortgage. Equity lenders simply do not like to park their loans behind other equity lenders. Provided you have the available equity on your property in B.C., the process of getting an equity loan is not too difficult. Equity lenders have a way to manage their risk when your property is securing the loan. Even with poor credit and low income, your chances of being approved for an equity loan are good, provided you have the equity. An equity loan is easier to qualify for than other types of loans because you are putting your property up as collateral. Typical Documents Required for An Equity Loan All mortgage lenders require certain documents when processing a request for financing. The typical documents required will include the following: Completed Application Form This will offer the lender an overall snapshot of you and your current financial situation. You should complete the application fully with as many details as you can offer. The more information you can share, the better the potential terms of the equity loan. Credit Check The lender will obtain your permission and access your credit bureau as part of the process. This will offer insight into your credit repayment history. Pledging your equity certainly helps, but lenders must assess the loan request with the level of risk. The lender simply wants to minimize any potential losses regarding his loan. Equity loans are easier to qualify for if you have bad credit, but a credit check is still necessary. Income & Employment Information The equity lender may ask for basic employment and income information, such as tax returns, a pay stub, or a job verification letter. This demonstrates the borrower’s ability to repay the loan. The income verification process through an equity lender is far less rigorous than that of a typical bank. The equity lender may exercise far more flexibility regarding the income information, but like the banks, they must verify that you have proof of income and the ability to repay the loan. Appraisal Report The lender will require a current appraisal of the subject property which will reflect the fair market value. This will help the lender calculate the loan to value ratio when determining the loan details. The appraisal report will offer the lender a detailed analysis of the property including the value, interior and exterior photos, and how it compares to similar properties. Additional Documents & Information Additional paperwork required by the lender may include: 1. Copy of Home Insurance Policy – the equity lender must ensure you have adequate insurance coverage over the subject property. They want to be certain the house or structure is insured fully in case of a disaster. 2. Copy of Current 1st mortgage Statement – the lender will need to confirm the loan amount(s) current owing and secured against your property. This again will assist the equity lender in calculating the overall loan to value ratio. 3. Contact Details of Lawyer/Notary – the borrower will need the services of a lawyer/notary who will review all loan documents and provide the borrower with independent legal advice. Prior to entering into a loan agreement, the borrow must consult a legal representative, who will review the loan papers and give their professional opinion of the nature of the loan. 4. Void Cheque or Pre-Authorized Debit Form – the equity lender will collect either a void cheque (in some very rare cases, postdated cheques) or a pre-authorized debit form for your bank. This will allow the equity lender to collect the monthly loan payment from the borrower on a regular basis. The process of getting an equity loan whether you're in Vancouver, Burnaby, Victoria, Kelowna, Langley, or anywhere else in B.C. can be rather simple and quick. As you can see, there are certain documents which are required, however they are not scrutinized like the banks. Equity lenders are far more flexible and take a make-sense approach towards the loan approval. It is best to shop around and look for the best loan offer which meets your situation. Finding the best equity loan will help save you money and much more. For any questions, reach out to us at info@yourequityloan.ca  With 2020 right around the corner, many of us are gearing up for the New Year and getting ready to seriously focus on long thought out resolutions. We want to improve certain things and take on others in an attempt to improve our overall quality of life. Certainly, personal finances are a serious consideration for all as the new year approaches. We want to improve our finances in an attempt to enjoy life and the many great things it has to offer, and there are many. You might want to connect your personal credit along with your ambition of striking it rich in 2020. This is the very best time to consider the New Year resolutions you want to make about your personal credit. Here are a few ideas you might want to seriously consider to ring in the New Year: 1. Order a copy of your own credit report, and read it from front to back, thoroughly. Have you even seen a copy of your credit report, ever? You can obtain a free copy through any one of the two credit reporting agencies in Canada. You may contact either Equifax.ca and/or TransUnion.ca, to request and obtain a free copy of your credit report. The free report will detail your creditors, your credit activities, credit details for each account…. The free report unfortunately excludes the beacon score, but for a small fee, either agency will send you a credit report and your beacon score. Once you take delivery of the report, take some time to read through it and ensure the information is correct and accurate. The information in the report is arranged similarly by each agency, and it is more or less straight forward to understand. You will also have a guide to help interpret all components of the report. This is a great to start the credit resolution. 2. Ensure there are no discrepancies or issues in your Credit Report. As you read through your credit report, it is extremely important to take note of any errors, discrepancies and unusual activities/notes/dates. You want to ensure all of the information about you and your credit is correct, accurate and current. The next creditor to access your report will then have the most recent & correct information about you, which will help with their decision in granting you credit. Also, you want to be certain there are no suspicious activities and your identity has not been compromised. Identity theft is a very big problem and can claim anyone of us at any time. It is best to be proactive and focus on protecting your credit and your identity, because if stolen and ruined, it will take years and thousands of dollars to claim back your innocence. Contact the credit agencies directly if you notice any issues with your credit report. 3. Bring all of your accounts up to date. Hit that reset button by paying all accounts that are slightly behind, in arrears or in collections, up to date. Do whatever it takes to get the funds necessary to do this. It is critical to eliminate any items which are showing derogatory or in collections, in your credit report. This will kill any chances of getting any credit down the road. Derogatory credit and collections are a black eye, and creditors will steer clear of you. Try and bring your accounts up to being current and start your new year. You must commit consistently on a monthly basis, make payments on time, even if the very minimum payment at least. Further, then try and chip away at the balances each month until they are all paid in full. Only use credit when absolutely necessary. 4. Set your limits and ground rules. It is a great idea to set the ground rules to using credit. You might want to reflect on the types of situations where you might have foolishly used credit and regretted it. Try and focus on how you will manage your purchases down the road. The best way to create focus is to ask yourself questions. Do I really need this? What alternatives do I have?... It is easy to buy now and pay later, and so many get stuck in this patter. In the end, credit runs out and all we have is a large bill staring right at us. Some rules you may want to adopt may include:
Remember, your credit should be protected and treated with the highest regard. Credit is important and allows us to maintain a certain standard of life, especially with the uncertainty we can find ourselves in very quickly. Credit also offers us the ability to take advantage of potential opportunities we make come across but do not have the funds to pursue. The list can go on. As one can see, the benefits of having and maintaining credit are numerous and critical to maneuvering through this financially complex world. Create rules for yourself and how you manage your credit. Have a game plan, set your limits and you will see amazing results. For more information, reach out to us at info@yourequityloan.ca.  Most of us have applied for credit at one time or another. There are 2 main credit bureau agencies in Canada - Equifax and TransUnion. They collect and administer your personal credit information in the form of a credit report, which can be requested by your lenders, employers, and landlords. Credit reports contain multiple pieces of personal and financial information, which are systematically organized and neatly presented into a report for easy review. What Information Is Collected About Me? Your credit bureau collects plenty of information related to you. The information related to you will include confidential details which are both personal and financial. The personal information in your credit report will include: * your legal name and all other know names you use or may have used previously * your date of birth * your social insurance number in some cases * your current and previous addresses * your current and previous employers * your credit score * any current or past accounts in collections for debt recovery * information which is of public record, such as foreclosure, bankruptcy, consumer proposal, tax liens and repossessions * a list of all credit inquiries made about you in the past 6 years, for all of the credit you have applied for previously The financial information in your credit report will include: * who your current & previous creditors are * the date you opened each credit account * the current outstanding balance of each active account and the minimum payment due for each, as applicable * the credit limit of each account * the details of each account – whether it is a personal loan, mortgage, car loan, credit card * the payment history of each account for a period of 6 years Where is My Information Collected From? All of the information contained in your credit report is provided by your creditors, financial institutions, other businesses, public records or third parties such as collection agencies. These parties report your account activities to a credit reporting agency periodically. This is information is kept in your personal credit file and is maintained for a period of 6 years. Every time you fill in an application for credit, some of the application information will recorded and noted in your credit bureau. This information would include a current address, length of time at current residence & employment details. Such information is offered up by the credit provider to the credit reporting companies in order to keep your personal information current. Your financial account details are also provided by your creditors. These include payment history, balances outstanding, credit type, and credit limits. It is good practise to review your own credit report each year to ensure it is accurate and there are no discrepancies. Who Will Need My Credit Report? You may be asked for a copy of your credit bureau for a number of reasons. The report will offer up extensive details about you and how you manage your credit and the responsibility associated with it. It provides a track record of your repayment habits and how you manage your financial obligations. It is an indicator of one’s character relating to credit worthiness & trust. Parties who would request to review a copy of your credit report would include: * Banks / Credit Unions * Credit Card providers * Insurance Companies * Employers * Auto Dealerships (car loans) * Landlords * Department Store Accounts A credit report will be required in almost all cases when applying for credit or services of a certain description. What if the information in my report is wrong? It is not uncommon to have errors in a credit report. There are so many bits of personal and financial information being updated and newly created periodically in a credit report all of the time. Due to all of the moving parts, there is a chance that some information may be inaccurate. Or even worst, what if your identity was compromised and your credit stolen and ruined? Never take your credit for granted and ensure you inspect your report at least once a year. You may request a free copy of your credit report through Equifax & TransUnion, and they will forward you a copy by mail. If you notice any irregularities or errors in your credit report, you must contact the creditor or lender. You may also dispute them by contacting the credit bureau agency. You will be required to outline the dispute, and the agency will investigate the situation and make any necessary changes. This process may take a long while in some cases such as stolen identity and fraud, as this type of investigation is conducted very thoroughly. You may also add notes and comments into your credit report, in an attempt to explain certain occurrences noted in your report. For example, if your report shows you had gone previously bankrupt, you may offer up an explanation as to why bankruptcy was the only option you had at that certain time in your life. The notes & comments offer up a story for the creditor to read and take into consideration for future reference. Where do I get a free copy of my credit report? You may obtain a free copy of your credit report in Canada through two main agencies who are Equifax & TransUnion. For a free copy of your credit report, you may contact either agency online or by: * phone * mail/fax * in person Their websites contain all of the information and direction you will need regarding any questions and to get that free credit report. TransUnion – www.transunion.ca Equifax – consumer.equifax.ca/personal/ You will be asked for some personal information from either agency, and they will prepare and send to you a copy of your credit report. It may take up to 10 days to receive the report in the mail. Requesting your own credit report does not reflect negatively in your report or in any manner. You may obtain a free copy of your credit report without any delay or issue.  What does my Credit Score mean and how is it calculated?
Your credit score is a grade of your credit worthiness, based on a numeric score range. Credit scores range from a low of 300 to a high score of 850. The higher your score, the better is your credit worthiness. The main factors which impact your credit score are: 1) Payment History – your payment track record is the most important item which will impact your credit rating. Approximately, 35% of your credit score is determined by your payment history. It is critical to make all payments on time and to void missing or being late with payments. 2) Use of Credit – your use of credit, by keeping current balances on your accounts will have a negative effect on your rating. Approximately, 30% of your score is affected by your credit utilization. It is best o keep your outstanding credit balances at a minimum or to pay in full when you can. 3) Length of Credit History – the length of time you have had an active credit account will also impact your credit score. Approximately, 15% of your score is affected by the active life span of each creditor account of yours. 4) New Credit & Number of Inquires – Approximately, 10% of your score is affected by you opening a new account and having new inquiry registered on your report as a result. The more inquiries reported in your credit report may result in a lower credit score. 5) Type of Credit – the type of credit will also impact your credit score – Approximately, 10% of your score is determined by the types of credit accounts you keep. The various accounts may include credit cards, car loans/leases, mortgage, lines of credit, etc. The more various types of credit you can manage well, will reflect positively and help raise your credit score. It is important to learn how to read your credit report so you can understand the mechanics, spot any issues and ensure the information is accurate. It is recommended that you request a copy of your personal credit report and review it in detail at least once a year. Stay tuned for more updates on the blog. For more information, or if you have any questions, reach out to Jim at jim@yourequityloan.ca |
Silver Hill BlogJim Horvath is the principal broker and director of Silver Hill Mortgage Corp., arranging mortgage loans for over 25 years. Archives
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