Category Archives: Creative Financing

RRSP Mortgages / Creative Financing apprenticeship for Canadian Real Estate Investors

RRSP Mortgages / Creative Financing Apprenticeship for Canadian Real Estate Investors is training for real estate professionals who want to have an edge to obtain financing for themselves or their clients if you are licensed

RRSP (Registered retirement savings plans ) allow you to invest your money in mortgages whereby you can determine your own rate of return and have the ability to place the money wherever you choose. When investing your own RRSP funds you must understand it before you proceed:creative financing

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Orphan Mortgages Canada

Mortgages are not that simple.They can be lot more complicated depending upon the lenders,the borrowers and the terms.Even though mortgage industry is heavily regulated and guarded to protect the Real Estate Investors and property owners.There are several key components to each mortgage. Most of Real Estate investors have very little knowledge about it. Majority of Real estate investors assume and presume, that is where they fall into cracks and suffer huge losses.

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Ottawa to Charge CMHC a Risk Fee

Ottawa to Charge CMHC a Risk Fee : CMHC’s quarterly financials revealed today that the government will start charging the nation’s largest default insurer a “risk fee.”

Effective January 1, 2014, CMHC will pay the federal government an additional 3.25% of its insurance premiums, plus 10 basis points extra on the low-ratio bulk insurance (a.k.a. Portfolio insurance) that it sells.Ottawa to Charge CMHC a Risk Fee

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Future Fit and You are The Boss Mortgages

Future Fit and You are The Boss Mortgages is very innovative mortgage product offered by VanCity. "Canadian credit unions are become exceptionally creative to attract lion’s share of Canadian mortgages" says Navtaj Chandhoke, founder, Professional Real Estate Investors Group (PREIG) Canada. "They intend to understand their needs much better than larger lending institutions. Their mortgage product has lot more features and flexibility. They are also competing among each other"

Let us compare their products and features. You will be amazed that their competitiveness is helping Canadians to get more bangs for their buck.

Future Fit and You are The Boss Mortgages

Future Fit and You are The Boss Mortgages, Financing your home purchase raises so many choices: down payments, terms, interest rates. But it's important to structure your mortgage so that it works for you now and in the future. Future Fit mortgage feature does just that. It gives you the flexibility to meet your financial goals and lifestyle as they change and evolve.

Features and benefits

* obtain your mortgage with only one approval, there are no legal costs on future advancesFuture Fit and You are The Boss Mortgages

 

 

 

* diversify your interest-rate risk by splitting your mortgage to include Home prime variable and fixed-rate components

* manage your interest-rate risk by having portions of your mortgage mature at different times

* switch your Home prime variable rate portion to a fixed rate during the term of your mortgage*

* use part of your mortgage as a line of credit to fund home renovations, debt consolidation or an investment property

* reduce your mortgage and interest cost with 20/20 lump-sum payments:

Or prepay up to 20% of your original mortgage amount once a year without penalty Increase your payments up to 20% once a year without penalty

* enjoy other standard Van city mortgage features: flexible payment options, portability and assumability. And great rates.

Van city has 400,000 members with $14.5 billion of their assets, making them Canada’s largest Credit Union.

Future Fit and You are The Boss Mortgages  is full of flexible features designed to put you in charge. Because saying hello to a mortgage shouldn't mean saying goodbye to life as you know it.

Management at Coast isn’t content with being the second largest credit union in Canada. They want to be the first. So, the BC-based company has been challenging big banks head on.

Its strategy has primarily been two-pronged:

a) Advertise some of the most competitive mortgage rates in BC; and,

b) Develop innovative products.

The you’re the Boss mortgage comes with:

* 30% lump-sum pre-payment privileges

The most of any closed mortgage in Canada (Here’s how Coasts pre-payments compare to the banks.)

* A Save and Take feature

This lets people re-borrow the money they’ve used to pre-pay their mortgage (subject to a $500 minimum)

Customers can check their available re-borrowing limit online

Clients can make a withdrawal by phoning Coasts call center. The money is put in the customer's account the next business day.

O BMO has something similar called the Mortgage Cash Account but BMOs minimum re-borrowing amount is $2500 vs. Coast Capitals $500

* A Half & Half rate option

o This sets the rate at the mid-point between the current variable and fixed rates, thus reducing risk compared to a straight variable mortgage

o Coast says this feature appeals to the 47% of borrowers who are unsure about whether to purchase a fixed or variable rate.

o Customers can instead opt for a regular 5-year fixed or variable rate if they choose

* 100% payment top-up privileges

o Allows customers to make up to double their regular payments

o Clients must phone in to make these extra payments (it can’t be done online).

Big pre-payment allowances are swell, but remember that only 12% of people actually made lump-sum pre-payments last year, according to CAAMP.

Save-and-Take-Payments Coasts new save and Take feature works sort of like a re advanceable mortgage. The difference is that re advanceable mortgages let you re-borrow all of your principal payments. The Save and Take feature only lets you re-borrow principal that has been pre-paid over and above normal scheduled payments.

In researching this product Coast found that 40% of local mortgage holders set aside funds for emergencies rather than using that money to pay down their mortgage. Allowing re-borrowing keeps people liquid and makes pre-payments more appealing.

Other notables of the You're the Boss mortgage:

* Maximum loan-to-value: 80%

* Property Types: Owner-occupied residences only

* Term: 5-year fixed, 5-year variable, or Half & Half (part fixed/part variable)

* Where to get it: Coast branches, Coast mortgage specialists and approved brokers

Not all lenders can offer this kind of mortgage. The re-borrowing feature makes it very hard to securitize and more complicated to fund. For those reasons, mortgages like this generally have to be kept on a lenders balance sheet (which Coast does). That makes it harder for non-deposit-taking lenders to compete with this kind of product, apart from competing on price.

Coast Capital serves British Columbia and has 425,000 members, 50 branches, and $12.9 billion in assets.

Your success is our Passion!

Align yourself with the most powerful, knowledgeable, influential, successful over 17,500+ Canadian Real Estate Investors for monthly mentoring,network and support at Professional Real Estate Investors Group (PREIG) Canada.

 P.S. Take Action now to attend the eye-opening seminar and walk away with confidence, knowledge, and specific "action ideas" that can help you achieve your dreams and leave the rat race behind.

 We have been training Canadian Real Estate Investors since 1993.

Mortgage Investment Corporation (MIC)

As a full-time Canadian real estate investor, we are required to have a good working knowledge of mortgages, joint ventures, and methods of purchasing properties with creative financing.

The Mortgage Investment Corporation, aka MIC, is a corporation who has been given a special designation by Canada Revenue Agency, as highlighted in the section of 130.1 of the Income Tax Act.

Mortgage Investment Corporation

It is a Canadian Corporation which allows investors to invest their RRSP, RESP, RRIF, and money in a pool of mortgages (mostly residential mortgages) where the properties are located within Canada.

The infrastructure of Mortgage Investment Corporation (MIC) is almost similar to a mutual fund.

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Mortgage for Self Employed Canada

"Securing a mortgage deal can take a bit of work and planning. There are three main factors when you are self employed Canadian. The process can be more complex but once you understand it, it is quite simple. Credit history, proof of more than 35% of down payment and notice of assessment from past 3years is must. There are other options but they will be lot more expensive" says Navtaj Chandhoke, founder, Professional Real Estate investors group (PREIG) Canada.

Mortgage for Self Employed Canadians

Good credit report

credit score are important factors in determining whether or not you will be approved. This is one of the factors mortgage professionals consider in qualifying you for a mortgage. The lender requires excellent beacon score possibly above 680 or more.

Canadian lenders will require mortgage loan insurance unless you can put down a down payment of more than 35 % . Insurers also recommend that lenders demand higher credit scores from borrowers stating their own incomes.

The simplest way for the self-employed to qualify for a mortgage is for the lender to look at your income on the Canada Revenue Agency notice of assessment for the past two years and see if you qualify for a mortgage.

Mortgage for Self Employed Canadians

(CMHC) will allow self-employed individuals to increase the income on their notice of assessment by 15 per cent in order to qualify for a mortgage. This is a generally accepted increase to compensate for non cash items such as business use of the home.

For full details, visit their website at CMHC -schl.gc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Self-Employed.pdf.

CMHC will average your income from the past two years.  If your income has been rising each year for the past four years or more, they will use the latest year for calculations.  To take advantage of certain tax strategies, many self-employed may keep money in their business  than generating income.

If you're unable to qualify based on your verifiable income, you can still obtain insured mortgage finance, but CMHC will charge you a higher premium. Since April, CMHC permits you to state your own income if you have been in business for less than three years.

Most of the Canadian lenders will require mortgage loan insurance unless you can put down a down payment of more than 35 per cent. Insurers also recommend that lenders demand higher credit scores from borrowers stating their own incomes.

World Wealth Builders (WWB) conveys action-orientated Canadian Real Estate investors education, coaching and mentoring. WWB provide wealth creating secrets, strategies & step-by-step practical how-to methods.

Mortgage for Self Employed Canadians

Your success is our Passion!

Use Canadian RRSP Tax Refund as Down Payment

It's RRSP season! If you're a first-time buyer, consider how the Federal Home Buyers' Program (HBP) and a tax refund can boost the funds you have available for your purchase.Canadian RRSP Tax Refund

If you have RRSP contribution room, you should contribute your savings before March 1, 2013 or 60 days after the December 31.

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High Ratio Mortgage

A high ratio mortgage is a mortgage in which a borrower places a down payment of less than 20% of the purchase price on a home. Another way of phrasing a high ratio mortgage is one with a loan to value ratio of more than 80%. A mortgage with more than a 20% down payment is called a conventional mortgage.

A high ratio mortgage will require mortgage insurance. Mortgage insurance is usually purchased by the lender through one of Canada’s three default insurers, the Canada Mortgage and Housing Corporation (CMHC), Genworth and Canada Guarantee and the cost of the premium is charged to the buyer as a closing cost, or is financed through the mortgage.

What is Down payment?

The buyer must pay the down payment from his/her own funds or other eligible sources before securing a mortgage. The portion of the home price that is not financed by the mortgage loan.high ratio mortgage

What is Mortgage payment?

A regularly scheduled payment that is often blended to include both principal and interest. This payment can be made weekly, bi weekly or monthly depending upon the bank and what have you negotiated.

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