Vancouver Private Mortgage Lenders & Hard Money Financing

Vancouver Private Mortgage Lenders

Vancouver private mortgage lenders are mostly corporations or individuals that invest their money on second or third mortgages secured on properties provided by the borrowers. Private mortgage loans may be arranged through a Mortgage Broker.

Most private lenders capped their investment risk to not more than 85% of the real estate value. The interest rates payable on 2nd mortgage loans may vary from 12% to 18% per annum.

Hard Money Financing

As the term inferred, hard money financing has greater risk, hence the interest rates and borrowing costs are higher. The use of hard money financing is a last resort financing that helps to save the a borrower’s home from being foreclosed.

Home owners may resort to this type of financing to avoid foreclosure. The cost of losing a home due to foreclosure is much higher than the cost of getting “hard money financing”. There are private lenders who may provide such financing to home owners who are in hardship.

If you like to have more information on private mortgages or hard money financing, call me at 604-721-4817 for a discussion.

Demand For Second Mortgages in Vancouver Expected to Rise

Home owners demand for Vancouver second mortgages will go up due to dropping home prices, tight liquidity problems and tightened lending by Canadian banks. Many home owners are maxed out!

There are not many options for a home owner to deal with the problem. A major cut back in personal spending and getting rid of major financial obligations have to be made. A home owner’s personal and family finances will only improve when incomes and expenses are back into balance.

Second Mortgage Financing – A Short Term Solution

If a home owner has enough equity in his home, he may be able to take equity out to finance his emergency cash requirement. A home owner has to understand that second mortgage financing is only a short-term solution to solve his cash needs. A second mortgage may give a home owner the breathing space to sell his home at a more favorable price. Without a second mortgage to tie over the few critical months required by a home owner, his loss will be much more if his home is foreclosed.

A recent Global BC video segment “ BC Real Estate Foreclosures Explode!” high-lighted the huge increase in foreclosures in BC.

If you are in need of a short-term loan, and like to find out whether you can borrow the fund your required, you are welcomed to contact me at 604-721-4817.

Note: Second mortgages are governed by BC’s Mortgage Broker Act. Borrowers are expected to be provided with proper and full disclosures on the terms and conditions of the second mortgage loans.

Vancouver Mortgage Broker For 2nd Mortgages

Where do you find a Vancouver Mortgage Broker for second mortgages?

When a home owner is looking for a Vancouver Mortgage Broker for a second mortgage, chances are that he will search the internet to locate a Mortgage Broker nearby. In Vancouver, BC a search will turn up a few Mortgage Brokers who have the contacts and experience to arrange for the money required by the home owner.

What are second mortgages?

Second mortgages are loan contracts secured on real properties which already have prior first mortgage charges on them. Most second mortgages are private mortgage loans provided by private mortgage lenders. These private mortgage loans fill the gaps that some financial institution such as banks and credit unions are unable or unwilling to fulfill.

Private Mortgage Lenders

Second mortgages are secured high yield investments private investors understand, and at the same time have some control on the investments. A private mortgage is a relatively safe investment. Most private lenders capped their investment risks to not more than 85% of the real estates provided as securities. The interest rates payable on 2nd mortgage loan contracts are from 9% to 18% per annum.

Some common features of a 2nd mortgage are:

1). Financing up to 85% of house value.
2). Interest rates from 9% to 18%.
3). Term – generally from 1 to 3 years.
4). Payments – mostly interest payment only.
5). Lender/broker fees – varies from 4% to 8%
6). Approval time – may take 1 day to 5 days.
7). Loan funding – can be done in less then 10 days.

If you like to find out more information about Vancouver second mortgage, kindly contact James Wong at 604-721-4817

CMHC Mortgage

CMHC Mortgage is a high ratio mortgage when the down payment provided by a home buyer is less than 20% of the purchase price of a home. In Canada CMHC, Genworth Financial and AIG are 3 insurers that provide high ratio mortgage insurance to home buyers who are buying their homes with less than 20% down payment.

Home buyers can buy with as little as 5% down payment if they are qualified for high ratio mortgages.

If you are a first time home buyer, check out if you are qualified to withdraw your RRSP savings as down payment. You should also find out if you are exempted from paying the British Columbia “property transfer tax”.

The CMHC mortgage insurance premium charged is dependent how much down payment is provided by you. The CMHC insurance premium may range from 1.00% to 2.75% of your mortgage amount.

Buying with 5% down payment

The less down payment you provide, the more fee you need to pay. This insurance fee can be paid up front or added to your home mortgage. If you plan to buy a home with 5% down payment and get a high ratio mortgage, check with your bank or your local mortgage broker whether you can be approved for CMHC mortgage financing.

The 5% down payment can come from different sources such as lender’s cash back incentives, lines of credit/credit cards, arm’s length personal loans or gifted down payment. For more information on applying for a mortgage, click on this link to my website: Vancouver Home Mortgage.

Buying Your First Home

Things you should know when buying your first home

Buying your first home is exciting, but can also be a time of anxiety and apprehension. As a first time home buyer, there are many issues you need to address. It is advisable for you to work with a local real estate agent, and a mortgage broker to help you with your real estate needs.

You can discuss with your bank to find out how much you can be approved, or your mortgage broker can help you in selecting a mortgage that is right for you. You should have your mortgage pre-approved, before taking the next step in looking for a home to buy. Once you are pre-approved, you know for certain what you can afford.

Why Deal With a Mortgage Advisor?

There are many advantages working with a Mortgage Broker who are trained to provide you valuable advice. You have more choices and you can choose a mortgage plan most suitable to you. You will also get the most competitive mortgage rates and you save time shopping the mortgage yourself with different banks.

Choosing the wrong mortgage plan could be very costly to you. Should you choose a variable mortgage or fixed closed mortgage? Currently variable rate mortgage is very attractive, but is this mortgage plan right for you? Click on this link to find out whether you should consider a variable mortgage.

If you like to find out more information on getting a mortgage, kindly contact me at 604-721-4817 or Email Me Now

How To Become A Mortgage Broker In Canada?

If you are curious as to the requirements on “How to be a mortgage broker in Canada”, you can easily find the answer by doing your research on the internet. Different Canadian may have their own regulations government the licensing and requirements to become a mortgage broker.

The term “mortgage broker” is loosely used to refer to a mortgage broker, mortgage advisor, mortgage consultant, mortgage representative or mortgage specialist. The correct name is a “sub-mortgage broker” for a person who is licensed and works on the business of providing mortgage and home financing services.

In British Columbia, the provincial Financial Institutions Commission of BC (FICOM) requires a sub-mortgage broker to be sponsored or employed by a mortgage broker company.

There are 2 basic requirements to become a licensed mortgage broker in BC:

1) Pass the examination. A person has to pass the “sub-mortgage broker course” before he or she can be licensed and registered to work as a sub-Mortgage Brokers. Employees of Canadian Banks, Credit Unions and Trust Companies are exempt by the Government and not required to be licensed to market their employers mortgage products to home owners.

There is a requirement for basic English language proficiency before an individual can be accepted to take the sub-mortgage broker course.

2) Good character. Before a license is issued to a sub-mortgage broker, FICOM has to be satisfied that the person to be licensed has no previous criminal records or past misconducts not worthy of being admitted or entrusted with dealing with credits and loans as a mortgage broker.

Most matured Canadians will not likely have any problem to satisfy the above requirements. If you are interested to find out more information on how to become a sub-mortgage broker, you are welcome to contact me.

Mortgage Lenders – Partners or Competitors

Are Mortgage Lenders Partners or Competitors?

The Canadian mortgage business is still dominated by the major Canadian Banks and Credit Unions. While most of these mortgage lenders have a Mortgage Broker Division to handle the origination of mortgage loans from mortgage brokers, they also have retail banking that service and compete for business with the mortgage brokers.

The market share for mortgage origination through the mortgage broker channel in Canada has been staying around the 25% level for the past few years. The biggest competitors faced by mortgage brokers in Canada are Canadian Bank’s retail branches. The everyday banking convenience and complimentary banking services by a home owner’s bank first-contact in capturing the mortgage business, in spite of better rates or personal services offered by mortgage brokers.

Who Owns The Clients?

Once a mortgage loan is completed and a client become a customer of a mortgage bank, the mortgage broker is put in a disadvantage position to continue keeping the client for future mortgage business. Although the mortgage broker may have maintained close contact with his client, the odds are against the broker doing the mortgage renewal business when the term is due.

The mortgage lender is treating the client as the bank’s customer. The broker will not be paid when the client renew or refinance his mortgage with the mortgage lender.

Low Renewal & Loss of Business Income

Another hurdle faced by mortgage brokers is the renewal business that brokers able to get on renewal is less than 20%. majority of the borrowers will renew their mortgages with the banks that the brokers placed the business with. A mortgage broker will have to constantly look for new business and clients who are in need of help with their mortgage applications.

Mortgage Bankers like MCAP and FirstNational Financial are working diligently to build their mortgage broker origination business, and work with the mortgage brokers to build their book of business by helping the brokers with clients’ mortgage renewal business.

The Mortgage Group, a Canadian mortgage company with operations in most of Canadian Provinces is the first mortgage brokerage company that will embark on providing their own branded mortgages to Canadian borrowers. Over time this can effectively enhance the role of mortgage brokers in the company to play a more significant role as a mortgage and financial advisors for the betterment of Canadian home owners.

The rational for the move is aimed at keeping mortgage advisors building their book of business. Elsewhere in Australia, the problem of mortgage lenders protecting their market share and profitability was high-lighted in a recent blog posting here.