In the mortgage business, mortgage underwriting and due diligence work hand-in-hand. Having the right mortgage intelligence could be the difference between a mortgage closing and not closing. There are so many reasons mortgages that appear to qualify don’t end up closing.
Most of the time, our customers do not intentionally mislead us and simply do their best to provide us with the information that we ask for. The mortgage intelligence we receive is a direct result of the questions we ask and how we interpret our customers’ answers.
When a mortgage application goes to the mortgage underwriting department at the financial institution you choose. They will perform due diligence that could include a search on Purview which is a tool offered by Teranet that tells the lender the approximate value of the property in question. They may pull a property title search to validate the information on title. They may also verify existing mortgage information with the customers’ bank before issuing an approval.
So the question is how can we mitigate the number of deals that fail to close?
First, the pre-qualifying questions we ask are key - here are some examples of the types of questions that you can ask to ensure that you have all of the correct mortgage intelligence needed to close your deal.
When you ask the client what their property is worth, ask them when they purchased the property and what they paid for it. If the purchase date was within 5 years of the date of the mortgage, likely the value hasn’t changed much and accordingly the balance is likely very close to what it was at the time of purchase.
If a customer tells you that there has been a vast increase in property value because they painted or did some landscaping, these are not the types of things that result in a drastic increase in property values. Things like an additional bathroom or a new kitchen are the types of things that would be expected to yield a slight increase in your client’s property value.
Finally, spending a little bit on a property title search when taking on a new client may save you huge in the long run. A title search is a mortgage underwriting due diligence tool that will tell you who is on title and also that mortgages are registered on the property and if there are any liens on the property. This type of information often rears its ugly head on closing which costs you, your lender and lawyer, time and money. This can be avoided with the right mortgage intelligence.
For more information about mortgage underwriting due diligence to create an enhanced level of mortgage intelligence, please call David Mandel at First Equity Financial by calling (416) 440-1224 ext 22 or by visiting www.firstequity.ca
Showing posts with label Dave Mandel. Show all posts
Showing posts with label Dave Mandel. Show all posts
Tuesday, October 11, 2011
Monday, May 2, 2011
Home Improvement Loans Can be Used to Finance Improvements to Increase Your Home’s Value.
There are a number of things you can improve in your home that will increase your home’s value. You can add a bathroom, finish your basement and renovate your kitchen – just to name a few.
Unexpected home improvements like a new roof can be an expensive surprise.
Rather than waiting until your home is in need of repairs, consider a home audit to look for ways that you can improve your home and increase its value.
Home improvement loans are now available at historically low rates. The best way to obtain a low rate home improvement loan is through a mortgage. Using your home as security will enable you to secure lower interest rates than if you used an unsecured line of credit.
The type of home improvement loan you should apply for depends on the size of improvement you want to finance. A small renovation of $15K-$30K could easily be financed through a home equity loan or line of credit.
If you are financing a large renovation, refinancing your first mortgage may make more sense.
If you have had issues with credit, are self-employed or cannot prove your income, this will make things more difficult. These three things make you a higher risk to a potential lender; in turn you will need to have equity in your home.
Before you prepare to apply for renovation financing, consider what other existing debt you have. This may be a good time, if you are going to refinance your mortgage, to consolidate your debt. This will free up cash flow and reduce the interest you are paying on existing credit cards.
The next thing you may want to do is consider requesting your credit report from Equifax. This way you can see what lenders will see before you even begin looking for home improvement refinancing. If you can find places to improve your credit (for instance paying down a credit card balance that is close to or at its limit), do it. This could save you big. The stronger your credit is, the lower the interest you will pay.
Even in cases where consumers have bad credit, the interest for a bad credit home improvement loan or refinanced mortgage is still less interest than bad credit loans offered by finance companies. If you are thinking of financing a home improvement using your home, consult a mortgage broker. They will be able to discuss your financial options and negotiate the best deal for you. For more information visit http://www.firstequity.ca or call 416-440-1224 ext. 22.
Unexpected home improvements like a new roof can be an expensive surprise.
Rather than waiting until your home is in need of repairs, consider a home audit to look for ways that you can improve your home and increase its value.
Home improvement loans are now available at historically low rates. The best way to obtain a low rate home improvement loan is through a mortgage. Using your home as security will enable you to secure lower interest rates than if you used an unsecured line of credit.
The type of home improvement loan you should apply for depends on the size of improvement you want to finance. A small renovation of $15K-$30K could easily be financed through a home equity loan or line of credit.
If you are financing a large renovation, refinancing your first mortgage may make more sense.
If you have had issues with credit, are self-employed or cannot prove your income, this will make things more difficult. These three things make you a higher risk to a potential lender; in turn you will need to have equity in your home.
Before you prepare to apply for renovation financing, consider what other existing debt you have. This may be a good time, if you are going to refinance your mortgage, to consolidate your debt. This will free up cash flow and reduce the interest you are paying on existing credit cards.
The next thing you may want to do is consider requesting your credit report from Equifax. This way you can see what lenders will see before you even begin looking for home improvement refinancing. If you can find places to improve your credit (for instance paying down a credit card balance that is close to or at its limit), do it. This could save you big. The stronger your credit is, the lower the interest you will pay.
Even in cases where consumers have bad credit, the interest for a bad credit home improvement loan or refinanced mortgage is still less interest than bad credit loans offered by finance companies. If you are thinking of financing a home improvement using your home, consult a mortgage broker. They will be able to discuss your financial options and negotiate the best deal for you. For more information visit http://www.firstequity.ca or call 416-440-1224 ext. 22.
Monday, April 11, 2011
Equity Mortgage? You Hear About Them all the Time, but what are they?
Equity in the context of mortgage financing is defined as “the market value of a debtor's property in excess of all debts to which it is liable”.
The more equity you have in your home, the less risk that you represent to a perspective lender. Folks who have bad credit or difficulty proving their income will require a larger down payment to purchase a home or more equity in order to refinance it, then someone who didn’t have these issues.
The reality is that there is such a large percentage of the population who have accumulated an unmanageable amount of debt, have had issues with credit, or are self-employed with difficulty proving their income; that some lenders will offer an “equity mortgage” or “equity only mortgage”.
In these circumstances the lender will base their decision solely on the amount of equity in your home and not look at your income, debt load and credit products. Most lenders will not grant a high risk equity only mortgage that exceeds 80% the value of the home.
Also an equity mortgage will bear a higher interest rate, than prime rate mortgages offered by the bank. Equity mortgages are offered by a number of different types of lenders. These include mortgage investment corporations, trust companies, finance companies and private individuals.
Obtaining a refinance equity mortgage is a fairly simple process and goes as follows:
- Mortgage application is made
- Mortgage application is preliminarily approved
- Appraisal of the property is ordered and mortgage statements
- Applicant signs mortgage documents
- Applicant signs documents with the lawyer
- Funds are dispersed
The entire process takes approximately 2-3 weeks. A relationship with a mortgage broker who also lends their own money is a huge benefit. This eliminates layers of referrers that ultimately results in more fees to you. Ontario Mortgage Brokers like First Equity specialize in subprime equity mortgage financing and also lend money too. For more information visit www.firstequity.ca or call David Mandel at 416-440-1224 ext 22.
The more equity you have in your home, the less risk that you represent to a perspective lender. Folks who have bad credit or difficulty proving their income will require a larger down payment to purchase a home or more equity in order to refinance it, then someone who didn’t have these issues.
The reality is that there is such a large percentage of the population who have accumulated an unmanageable amount of debt, have had issues with credit, or are self-employed with difficulty proving their income; that some lenders will offer an “equity mortgage” or “equity only mortgage”.
In these circumstances the lender will base their decision solely on the amount of equity in your home and not look at your income, debt load and credit products. Most lenders will not grant a high risk equity only mortgage that exceeds 80% the value of the home.
Also an equity mortgage will bear a higher interest rate, than prime rate mortgages offered by the bank. Equity mortgages are offered by a number of different types of lenders. These include mortgage investment corporations, trust companies, finance companies and private individuals.
Obtaining a refinance equity mortgage is a fairly simple process and goes as follows:
- Mortgage application is made
- Mortgage application is preliminarily approved
- Appraisal of the property is ordered and mortgage statements
- Applicant signs mortgage documents
- Applicant signs documents with the lawyer
- Funds are dispersed
The entire process takes approximately 2-3 weeks. A relationship with a mortgage broker who also lends their own money is a huge benefit. This eliminates layers of referrers that ultimately results in more fees to you. Ontario Mortgage Brokers like First Equity specialize in subprime equity mortgage financing and also lend money too. For more information visit www.firstequity.ca or call David Mandel at 416-440-1224 ext 22.
Thursday, March 17, 2011
How to Get Approved for a Commercial Mortgage Financing in Ontario – A Mortgage Brokers Commercial Mortgage Checklist
Commercial mortgage financing and commercial loans in Ontario are specialized fields of financing.
If you operate a Corporation, you would hire a Chartered Accountant to file your tax returns; and not a general accountant.
In that same vein, if you need to apply for commercial mortgage financing or a commercial loan, it is best that you deal with a Mortgage broker who specializes in Commercial Mortgage financing. If you are a Mortgage Agent or Broker who specializes in residential mortgage financing, you too can benefit from the guidance of a Mortgage Broker who specializes in Commercial Mortgage Financing.
To be approved for a Commercial mortgage, the lender will require a lot of information to process the application. You will need to:
- Provide an explanation of what you are seeking to accomplish through the Commercial Financing
- Provide the desired loan amount
- Indicate if you are requesting debt, equity, or both
- Provide a complete property description that includes the location, size, current entitlement status
- Provide status of approvals including correspondence
- Indicate the amount of funds that are actually needed for the project and the percentage of the project these funds represent
- Indicate the amount the borrower is going to invest in this project
If the project involves real estate development, you will be required to provide:
- A list of the hard and soft costs for all phases (provide a spread sheet with a detailed construction/servicing budget)
- The future value upon completion
- Project time frame
- Rate of absorption
- Total build out
If there is a retail or office component to the application, you will also have to indicate pre-leasing information and provide a rent roll. Leases will be required later.
If the Commercial Mortgage is required to purchase a commercial property you will also need to know the purchase price, down Payment amount, seller carry, contract/REP- C expiry date.
You will also need to provide:
- Use of Funds - (Or provide a spreadsheet)
- Projected cash flow noting sales and estimated draw down on construction facility
- Pro – Forma Income statement
- An explanation of the business and/or borrower’s financial history for the past 3 years
- Previous operating history, if applicable and a list recent projects
- A P&L for the business if one is available
- Personal financials for the borrower
Finally, you will also have to indicate:
- Whom is signing the loan
- Any critical dates that must be met for this project
- If there is an appraisal. If yes, the date of the appraised value. If there is no appraisal how was the value determined?
- If a 3rd party independent feasibility study or appraisal was completed
- If other properties can be used as collateral. If so, what is the type of property, value and are there any existing liens?
- Your credit status. Do you know your credit score?
It is clear that obtaining approval for commercial financing in Ontario is quite an undertaking . Seek the guidance and representation of a professional who specializes in this field. For more information please visit www.firstequity.ca or call David Mandel 416 440 1224 ext. 24.
If you operate a Corporation, you would hire a Chartered Accountant to file your tax returns; and not a general accountant.
In that same vein, if you need to apply for commercial mortgage financing or a commercial loan, it is best that you deal with a Mortgage broker who specializes in Commercial Mortgage financing. If you are a Mortgage Agent or Broker who specializes in residential mortgage financing, you too can benefit from the guidance of a Mortgage Broker who specializes in Commercial Mortgage Financing.
To be approved for a Commercial mortgage, the lender will require a lot of information to process the application. You will need to:
- Provide an explanation of what you are seeking to accomplish through the Commercial Financing
- Provide the desired loan amount
- Indicate if you are requesting debt, equity, or both
- Provide a complete property description that includes the location, size, current entitlement status
- Provide status of approvals including correspondence
- Indicate the amount of funds that are actually needed for the project and the percentage of the project these funds represent
- Indicate the amount the borrower is going to invest in this project
If the project involves real estate development, you will be required to provide:
- A list of the hard and soft costs for all phases (provide a spread sheet with a detailed construction/servicing budget)
- The future value upon completion
- Project time frame
- Rate of absorption
- Total build out
If there is a retail or office component to the application, you will also have to indicate pre-leasing information and provide a rent roll. Leases will be required later.
If the Commercial Mortgage is required to purchase a commercial property you will also need to know the purchase price, down Payment amount, seller carry, contract/REP- C expiry date.
You will also need to provide:
- Use of Funds - (Or provide a spreadsheet)
- Projected cash flow noting sales and estimated draw down on construction facility
- Pro – Forma Income statement
- An explanation of the business and/or borrower’s financial history for the past 3 years
- Previous operating history, if applicable and a list recent projects
- A P&L for the business if one is available
- Personal financials for the borrower
Finally, you will also have to indicate:
- Whom is signing the loan
- Any critical dates that must be met for this project
- If there is an appraisal. If yes, the date of the appraised value. If there is no appraisal how was the value determined?
- If a 3rd party independent feasibility study or appraisal was completed
- If other properties can be used as collateral. If so, what is the type of property, value and are there any existing liens?
- Your credit status. Do you know your credit score?
It is clear that obtaining approval for commercial financing in Ontario is quite an undertaking . Seek the guidance and representation of a professional who specializes in this field. For more information please visit www.firstequity.ca or call David Mandel 416 440 1224 ext. 24.
Tuesday, February 1, 2011
How to Qualify for Low Rate Loan Construction Financing in Toronto
If you want to finance a Toronto construction project, you may have already done some research and learned that construction financing is much more complicated than conventional mortgage financing. There are a lot of really great deals out there but if you do not dot your “I’s” and cross your “T’s” it can get really expensive.
The best type of professional to guide you through the process is a local mortgage broker who specializes in construction financing. If you are seeking to finance a construction loan in Toronto, seek the assistance of a Toronto Mortgage Broker. This can get tricky because the majority of mortgage brokers specialize in residential mortgage financing. Even a residential mortgage broker, who wants to get into construction loan financing, benefits from a relationship with a mortgage broker who specializes in construction loans.
How do you ensure you are dealing with a mortgage broker who is a construction loan specialist? Ask lots of questions and do a little bit of research. Here are some tips.
1. Visit their website. Is a large portion dedicated to useful information about construction loan financing? Are there client testimonials?
2. Google them. Other customers may have posted reviews about their service and you can see if they are a leader in their field by how many results come up on the search engine under their company name.
3. Call them and ask them about other construction financing projects that they have completed and ask for references.
4. Visit the FSCO website to confirm that they are licensed.
5. What types of properties can they finance? (residential single family, small or large subdivision, commercial, industrial). A mortgage broker who specializes in construction loan financing should know about all areas of construction loan financing.
6. Construction financing is as much an art as it is a science. Advances are made in progress draws in relation to work that has been completed.
If you are planning on applying for a construction loan here is what you are going to need: a site plan, building plans, a building permit (if available), a construction budget with a breakdown of hard and soft costs, a detailed cash flow with dates and advance requirements, construction contracts, builders resume and history of recent projects, a marketing plan and brochures if the final product is to resold in which case you may also require some pre-sales , a copy of typical purchaser agreement with all schedules, projected sale prices or rental rates with comparables and competitor details, presale details and estimated sell up time and completion date, offers to lease (if pre-leasing) or if it is a condominium, a copy of condominium application and/or draft documents.
Once you have found your mortgage broker that specializes in construction loan financing, they can guide you the process and help you obtain the financing that you will need to achieve your dreams. For more information please visit www.firstequity.ca or consider the services of David Mandel, a Toronto Mortgage Broker who has over 20 years of experience specializing in commercial mortgages and construction mortgages. David Mandel can be reached by calling 416-590-9800.
Tuesday, January 4, 2011
How to Deal with Holiday Financial Stress and Prepare for the Credit Card Bills that are Coming in the Mail.
With the inception of the first credit card in 1953 has come 58 years worth of charging our Christmas shopping on our credit cards and then paying the consequence in January when the bills roll in. The question is, what is the best way to deal with your credit card debt after the holidays? This really comes down to how much damage you have done.
If this is your first time using credit to finance the holidays, your balances are likely negligible and so you should just divide them into 3-4 monthly payments and try to hammer them down. Do not resort to minimum monthly payments no matter how low and tempting they may be as you will likely still owe the same balance once next Christmas has rolled around.
If you have accumulated a lot of credit card debt over the years and are making minimum payments, it's time to seriously think about consolidating. If you own your home this is likely one of most affordable ways to raise the money to consolidate your credit card debt.
There are many different types of home equity products to choose from. You could obtain a home equity loan, a home equity line of credit or if you have a lot of debt, you could refinance your first mortgage to pay off your debt.
Your best bet is to work with a local mortgage broker who can present you with many options as opposed to going directly to a bank where they can only offer you their products and services. You will also need to give consideration to the steps you will take to avoid going into debt with your credit cards again. The benefit to consolidating coming into a new year is that you can also formulate a plan to save for next year's holiday spending.
For more information about how to deal with holiday financial stress and prepare for the credit card bills that are coming in the mail, visit www.firstequity.ca.
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