Toronto Homeowners Consolidate Debt before the Holidays

The holiday season can be crazy with all the planning that goes into family dinners, gift exchanges, holiday parties and then there is the actual holiday itself. Whether you celebrate Hanukkah, Christmas, Eed or another religious day/period, this holiday season one thing we all face in common is the expense that comes with the holidays and preparing to begin the New Year with our budgets, finances and credit intact.

Some Torontonians rush to complete their shopping, use their credit frivolously with the idea that they will deal with the repercussions in January. Some Torontonians have accumulated so much debt in the past few years, during the troubled economy, that they are wondering how they are going to pull the holiday together at all.

There is a clear answer. Instead of being overwhelmed by the holidays, embrace not only the holidays, but use the holidays as a way to tackle your financial challenges so that you can enter the New Year with more cash flow and strong financial goals.

If you own your home, refinancing over the holidays could be the best choice to clean up your credit and start the New Year on a fresh footing. Many Toronto Homeowners have used equity in their homes to obtain low rate lines of credit and other secondary home equity financing. Others have refinanced their existing mortgages to consolidate debt so that they can start the New Year with a single low monthly payment.

You see, if you own a home in Toronto, refinancing your mortgage or obtaining a new home equity line of credit is not as complicated as you probably think and can be completed in 2-3 weeks. Home equity loans and lines of credit are typically less interest than the unsecured credit products and offer more flexible repayment options.

From all of the staff at First Equity Financial we wish you and your family a safe and happy holiday season and all of the best in the New Year. For more information visit www.firstequity.ca.

Toronto Homeowners Qualify For Mortgage Financing To Pay Off Consumer Proposals.

If you are in a consumer proposal and own your home, good credit may be closer than you think. If you have some equity in your home, there are lenders that will consider extending you a mortgage IF the consumer proposal is paid off in the process.

A consumer proposal stays on your credit for 3 years from the date it is paid in full, so the faster you pay it off, the faster it will be off your credit. If you were in a 4 year consumer proposal and made the payments over the full 4 years, the proposal would remain on your credit report for a total of 7 years.

You cannot expect to walk into a bank or finance company, in a consumer proposal and qualify for any credit. Finding a lender that offers mortgage financing to a consumer who is in a consumer proposal will involve a relationship with a good mortgage broker.

Mortgage brokers deal with private individuals and businesses that invest in real estate and are licensed to arrange mortgage on behalf of these private investors. Normally, private investors will only loan money to a consumer who is in a consumer proposal on an equity basis.

In effect, the more equity you have in your home, the more likely you will be to qualify for the mortgage refinancing you will need to pay off your consumer proposal.

If you refinance your home and pay off your consumer proposal, you can begin re-establishing your credit immediately. You can start off by obtaining a secured credit card that will report to your credit report.

Two years after your consumer proposal is paid off and with two years of strong re-established credit, you may qualify for mortgage financing at the bank again! Remember, after 3 years all existence of the consumer proposal will disappear from your credit report.

For more information about qualifying for a mortgage to pay off a consumer proposal. Visit www.firstequity.ca.

Stop a CRA wage garnishment! Your home equity could be the answer.

If you are a homeowner and the CRA is garnishing your wages, there are ways that you may be able to raise the capital to pay off your income tax debt and move forward with your life.

If you have a tax problem you may have gone to an accountant or even a lawyer. The bottom line is if you have a tax debt and you know that you owe the money and simply can't pay it, what you really have is a financial problem.

Those who find themselves in the unfortunate situation of having their wages garnished by the CRA, often experience both financial and personal consequences that include financial hardship and personal embarrassment.  

Many homeowners in this situation don’t think that they have options because they have gone to their bank and as soon as they mentioned that they have a tax debt they were promptly declined for credit.

The thing is, if you own a home you have more options than your bank, before you give up on seeking the funds to pay off your CRA income tax debt.

Consulting a mortgage brokerage that specializes in helping consumers with tax debt is your first step. A qualified mortgage broker in Toronto will be able to access different sources of mortgage funding that include trust companies, finance companies, mortgage investment corporations, private lenders and more.

Depending on your credit, employment type, provable income and amount of equity you have in your home, there are other companies who may lend you money at affordable low mortgage interest rates and flexible mortgage terms.

If you have bad credit or can't prove your income, you will simply require more equity.

Paying your CRA income tax debt in full is by far the fastest and most effective way to stop a wage garnishment, while preserving your credit. For more information about how you can use your home to stop a wage garnishment please visit www.firstequity.ca.

How to Qualify for a Mortgage in Toronto – Common Mortgage Qualification Issues

By David Mandel, Principal Broker and CEO of First Equity Financial Group

Operating a Mortgage Brokerage in Toronto, one thing that I see often is folks who have the dreams and ambitions to own a home.  Only, with fast changing economic conditions, Toronto banks and Toronto finance companies often change what they require in order to qualify for a mortgage. In January your financial situation may have been acceptable to the bank but now it’s not.

We refer to this as the ever-narrowing mortgage box. The truth of the matter is that hundreds of loan programs exist in Toronto for people who do not fit the conforming box. Below are a few examples of some specific of problems that Canadian consumers encounter when trying to qualify for a mortgage in Toronto. We have also included some tips how you can overcome these challenges.

1. My debt-to-income ratio is too high
SOLUTION: There are many loan programs on the market today which feature "expanded criteria" allowing higher debt-to-income ratios for qualifying purposes. While some of these programs come with premium pricing, others do not, and offer the borrower a viable source for getting a loan. Mortgage brokerages often have ready access to equity and or private lenders who allow for expanded ratios. However, fees are usually charged for non-conforming mortgages and mortgages arranged where little or no documentation is available or is inadequate. Most of these programs come at a higher price than conforming loans but offer a loan source for individuals who do not qualify through any other program.

2. I don’t claim all of my income on my financial statements
SOLUTION: If you are self-employed or derive some or all of your income from commission or tips, your financial statements may not reflect all of this income, or you may counter-balance this income with expense write-offs. In this instance, a “stated income” or “no-income” verification loan may help you qualify. With sufficient down payment and adequate credit, the lender will not verify the income stated on your application.

3. I have poor credit history
SOLUTION: The “Non-Conforming” or “B /C” market is one of the fastest growing in the mortgage industry. A program exists for nearly every credit problem including bankruptcy and foreclosure. Rates for these programs are typically based on the borrower’s previous 24 months credit history. Mortgages are available at competitive rates.

4. I have little or no money for a down payment
SOLUTION: Insured loan programs and combination first and second mortgage programs allow for residential home purchases with as little as 5% down payment

5. I have little or no established credit
SOLUTION: Many lenders will accept “alternative credit references”. In these instances, the borrower may need to provide references or proof of payment for things such as rent, electric, water, or insurance. Assuming adequate payment history, many first-time homebuyer programs will accept these references as sufficient credit history.

For more information about how to qualify for a mortgage in Toronto visit http://www.firstequity.ca.

5 Steps You Should Take Before Seeking a Mortgage Loan in Ontario

Potential borrowers often sabotage their own efforts obtaining a mortgage loan. It is important to remember that each lending institution has particular rules and guidelines to qualify for a mortgage loan. Preparation and homework can help you speed the process and save you money.

Here are 5 steps you can take to make sure you are ready to apply for a mortgage:

Start early.

Many borrowers procrastinate in applying for a mortgage for many reasons such as: fear of being denied, shopping for the perfect deal, not having all their documentation, thinking the process will not take much time. There is nothing more stressful than having a closing date looming with no loan commitment in sight. Starting early does not cost you more and may ultimately save you money.

Get your documentation in order.
Lenders are going to require documentation on income, assets, and other personal information. Be prepared to provide it in a timely fashion. You will be in a stronger position to get the loan you want by being prepared.

Get a copy of your credit report before you apply, particularly if you have any doubt in your mind about how your creditors have viewed the way in which you have managed your financial affairs.

In some instances, borrower's credit reports may contain erroneous information. While credit reports can be corrected, the process takes time. Knowing exactly what your credit report says may provide an advantage.

Complete the loan application thoroughly.
By giving complete and accurate information early in the process, you will help speed up the process.

Don't try to change the system.
Work with a mortgage professional that you are comfortable with and can address your needs, concerns, answer your questions and instil confidence. In some instances, the bank or mortgage company, you or the consultant, you are working with simply may not offer a program that can suit your requirement. In other cases, the type of financing being sought is simply not available. Being an informed borrower and working with an experienced mortgage broker or mortgage agent can often be the difference between success and failure.

For more information visit www.firstequity.ca.

Construction Loans and Home Improvement Financing

For many individuals, adding a pool, an addition to the home or making repairs, requires the use of a mortgage. There are many ways that you can use your home to finance construction projects and home renovations. Obtaining a mortgage loan to finance your construction project or home renovation is often the most affordable route offering the most flexible financing options.

If you are thinking about seeking a construction loan, home renovation loan or mortgage, here are variables that you should consider:

1.       Depending on the required loan amount, a home-equity line of credit (HELOC) may be the most cost-effective option. Home equity lines of credit; typically carry lower interest rates when the loan is less than 75% of the home value. A fixed rate loan program is available at higher interest rates and is available to 90% of the home’s value. For this reason, home equity lines of credit and some fixed rate second mortgage financing work best for smaller loan amounts that will be paid off in a reasonably short period of time.

2.       Borrowers who need larger loan amounts and who intend to keep the outstanding balance for a longer period of time may want to consider refinancing their first mortgage, paying off the existing balance and increasing the loan in an amount sufficient to pay for the improvements. While this option will most likely require the borrower to pay closing costs, the benefit of this option is usually a lower interest rate over an extended period of time than is typically offered by other Home Improvement loans.

3.       Construction or Construction/Permanent loans are best suited for extensive renovations requiring multiple draws to contractors or labourers. Draws are usually set up monthly and are subject to at least a 10% holdback of funds in accordance with “construction liens” laws. In addition, many lenders prefer to fund these draws on a cost-to-complete formula where the funding program insures that there is always enough money remaining after each draw to complete the project in the event of a problem or default. Each time the contractor requires a draw an architect, engineer or appraiser is called in to determine the value of the work in place and the remaining work to be completed. The lender will use this information to determine the amount of the draw that will be advanced. These loans are usually set at a float rate of 1 to 3 above bank prime for non-private funding and may contain a permanent (take-out) mortgage which comes into effect once the construction is complete and beyond the 45 day construction liens period.

In many instances, the lender will require plans and specification for improvements. Lenders will also require an appraisal of the subject property reflecting the value of the improvements in the new valuation.

There are so many lenders out there that include banks, finance companies, mortgage investment corporations and private lenders. Depending on your credit standing and the equity in your property, if you are planning a construction project or a home renovation, you likely have many financing options. For more information visit http://www.firstequity.ca or call (888) 455-5774

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