Category Archives: Mortgage News

Bridge Financing

Bridge the gap between one mortgage and the next.

Bridge Financing

Bridge Financing

What happens if you find your perfect home the day after you put your current home on the market? Like many people, you probably get excited. Don’t worry! There is an answer– bridge financing.

What is Bridge Financing?
Bridge financing is short term financing that’s based on the equity you have in the home you are selling. The current home is used as collateral and the bridge loan is used to pay closing on the new home prior to selling the current home.

  • Bridge Financing: a short-term, high interest loan that “bridges” the gap between the purchase of a new home and the sale of a current or existing home, allowing a seller to purchase a new property before selling an existing property.

Equity is calculated by taking the sale price and subtracting the debts you currently owe on the home– the Canadian mortgage rate, secured line of credit (including prepayment penalties), real estate commissions, and legal fees. The net total is the basis for your bridge loan.

In 2010, homeowners borrowed $26 billion in additional equity from their homes. 15 percent of homeowners withdrew equity, averaging $30,000. (Source: CAAMP).

Generally, the interest on the best mortgage rate for this style of loan is considerably higher (1 to 3 percent above prime), and at times there is an administration fee tacked on. Be sure to ask your lender, and they might waive the fee for you.

Some bridge loans are structured to pay off the entire existing low mortgage rate at the bridge loan’s closing, while other variations of the loan add the new debt to the old debt. Bridge loans typically include six month terms.

Construction Mortgages

Considering building a new home? Here is what you will need to understand.

Building a Home

Building a Home

Building a home is complex; your low mortgage rate shouldn’t be.

Let’s take a look at three different ways to finance your newly constructed home in Canada:

  1. Builder/Contractor built a home with your money: Customer has made an agreement with a registered builder to construct their home.
    • Mortgage Options: Completion Mortgage or Progress Draw.
  2. Self-Built Home: Customer would like to act as his/her own contractor.
    • Mortgage Options: Completion Mortgage or Progress Draw.
  3. Builder constructed home with their money: Customer requests funds when the home is 100 % complete.
    • Mortgage Options: Completion Mortgage.

Completion Mortgage

After you have purchased or built your new home through a residential homebuilder you will then require Canadian mortgage rate funds when the house is finished.

Progress Draw Mortgage

This mortgage is a type of funding that is advanced in intervals.

Relevant Terms

  • Solicitor: A progress draw requires a solicitor.
  • Progress Inspection Report: Details progress before the advancement of the best mortgage rate funds.
    • Interest on Draws/Advances: Interest is charged on total amount advanced.
    • Final Advance: Released upon final inspection after verifying that the job is complete.
    • Mortgage Insurance: Land draws are not available under CMHC guidelines.

 

Completion Stages

There are generally 3 stages to building a house:

  • Roof Stage / Roof Tight— Approximately 35 % complete.
  • Intermediate / Lock Up— Approximately 65 % complete.
  • Final Occupancy / Completion— 100 % complete.

 

Required Documentation

  • Written employment and income confirmation
  • Proof of down payment or equity
  • Copies of quotes
  • Full appraisal
  • Plans / House specifications
  • Fire insurance certificate

Do you need help working out the details of your construction mortgage? Contact FamilyLending.ca for expert advice.

For Sale By Owner – How Does This Change The Home Buying Process?

The DIY guide for selling and buying a for sale by owner property

When it comes to selling your home, a growing number of people are opting for the do it yourself approach.

The private sale of homes is becoming relatively common thanks to advances in Internet technology and an increase in For Sale By Owner (FSBO) companies.

If you are successful in making the sale, you could save yourself a real estate commissions of 3-5 percent.

How For Sale By Owner Works

Generally, private sellers will make use of one of the various For Sale By Owner network websites. These companies will provide different service plans to assist you in selling your home. Standard plans consist of exposure through their website, lawn signs, and a personalized consultation with sales representation. The premium plans provide additional advertising support (i.e. in local papers, or real estate magazines), and they perform a competitive market analysis.

According to research studies, 45 % of Canadians would consider bypassing real estate agents to sell privately with the guidance of a real estate lawyer. A good lawyer can make all the difference for a private seller.

This system also weighs heavily on the communication between the seller and their lawyer. A lawyer is best equipped to manage situations of legal concerns.

Considering Selling Your Home Privately?

When it comes to deciding whether to try and sell your home without the services of a real estate professional, consider the following:

The Pros

Pros and Cons

Pros and Cons

  • You could possibly save thousands of dollars in commission fees.
  • You’ll be able to maintain control over all aspects of the sale.
  • You’ll have the flexibility to show the house at your own convenience.
  • You have the opportunity to highlight, from your experience, everything your home has to offer to prospective best mortgage rate home buyers.
  • More buyers are internet savvy and are familiar with private sales sites, as well as online auctions and complimentary classified websites.
  • If you pass some of the savings onto the buyer you open up your reach to buyers at lower price points.

The Cons

  • Prospective buyers might not find your home.
  • Real estate agents understand the market and what price points will sell.
  • Upfront advertising costs, without any guarantee of visibility.
  • Potential low mortgage rate buyers have to call you.
  • No one to prepare agreements or advise you on negotiating.
  • You might have to negotiate a commission for the real estate agent of a potential buyer.

The Safety of an Agent
For many, a real estate agent is the most comfortable choice when making such a substantial transaction. They can guide you through the process and negotiate the sale on your behalf.

Essentially, only you can make the decision if the service of an agent is worth the fee.

Hot Real Estate Market: Tips For Buyers

Don’t get burned by a hot market

Know Your Budget

Budget

Budget

It’s a risk for any buyer to get in over their head with too high of a best mortgage rate investment. Remember to consider all costs related to buying a home and owning a home. You will need to make the mortgage payments, pay the utilities, do household repairs, etc.

Know Your Budget for the Future

Interest rates are at a low; inevitably, they will rise. Before you sign a deal, calculate the amount you would be paying a month for your Canadian mortgage rate if rates rose by 2 or 3 percent.

Separate from the Pack

A number of houses attract a large group of buyers and provoke a bidding war. Search for a house that is a 15-minute walk to transit, needs some renovation work, has a shared driveway, or another feature that most buyers might avoid.

Know Your Needs

Make a list of what you truly need. Also, make a separate list for wants. Remember: you can only make a house bigger if you have enough land (and money). While you can always renovate, you can’t fundamentally change a home’s layout or its location.

Stay Cool

Choose an agent who can help you navigate bidding wars and the best low mortgage rate. Make a pact with your partner to keep your price range and must-have items in mind at all times.

Be patient and wait for the right house or the right offer to come your way!

How Accelerated Payments Can Fast Track Your Financial Freedom

Fast track your mortgage with these easy tips.

There are options available to help you enjoy a mortgage-free lifestyle sooner rather than later.

Mortgage Payment

Mortgage Payment

Let’s look at the Different Types of Mortgage Repayment Options

  • Monthly Mortgage Payments
    • The traditional mortgage payment; where the payments are made monthly on the same day each month.
  • Bi-Weekly Mortgage Payments
    • You make payments every second week on the same day.
  • Bi-Weekly Rapid Mortgage Payments
    • Also referred to as accelerated bi-weekly mortgage payments every two weeks and allow you to pay off your mortgage quicker by making an extra payment annually.
  • Weekly Mortgage Payments
    • Making an equal payment each week throughout the month.
  • Weekly Rapid Mortgage Payments
    • Similar to bi-weekly rapid best mortgage rate payments– you make slightly larger payments which in total is an extra payment being made throughout the year.

How does this save me money on my mortgage?

Paying off your low mortgage rate using either a bi-weekly rapid, or a weekly rapid payment schedule can save you interest. For instance, you would end up making 26 ‘half’ payments, the equivalent to 13 ‘full’ payments.

Being mortgage free five years sooner may be a reality!

Accelerated Payments are NOT for everyone

While accelerated Canadian mortgage rate payments prove to pay off your mortgage a lot sooner than traditional monthly payments and can save you thousands of dollars, it may not be for everyone.

With accelerated mortgage payments, you are quite literally accelerating to a future of living mortgage free and enjoying financial freedom.