Mortgages for Rental Properties

Several years ago, it was fairly easy to obtain a mortgage to purchase a rental property.

If the rent carried the mortgage, taxes and condo fee's if applicable your would probably get approved for up to 80% financing.

That's changed is recent years. Now lenders are looking for Debt Servicing.  example.
A client needs to be able to carry their own home and the rental property against there own income and 50% of the rental property income.  The Total debt cant exceed 42% of the total income.
This is difficult for many investors and pretty much impossible if you own 2 rental properties.

One solution is to use a non bank lender that has different risk models and uses different underwriting calculations. I have access to these lenders.  You might pay a slightly higher rate but don't forget its all tax deductible if the property is for investment.

Getting preapproved for rental purchases is often overlooked and yet this type of mortgage financing has been tightened up almost as much as self employed deals.
Get preapproved and try to avoid properties with heavy taxes and condo fee's

If you own a Rental property or plan to purchase one or two give me a call to see what you can borrow.

Exclusive Mortgage Offers

I just finished a conference call with our Head Office.

We discussed our Exclusive offer not available from other Banks or Mortgage Brokers.

Mortgage Centre Canada is now offering a 5 Year Term at 3.49% .

This rate is .20 below other Banks and Lenders.

This offer is for clean deals, owner occupied, good credit.

Bank Mortgage Approval Turnaround Time

I spoke with a former co-worker today who sells mortgage at a major bank.

He was quite upset that his approval centre is running about 4 days right now.
he is losing deals to other bankers and the Broker industry because of this service.

At the same bank, I get a maximum 2 day turnaround and most times even faster. Also I have 4 dedicated
underwriters to work with which gives me a familiarity and my old friend has no idea who his deal will go with at any time.

In the broker world we are treated like a preferred customer so that the Lender can win our business every time.

Another reason to work with an experienced Mortgage Broker

5 Year Mortgage Best Rate

Our company has been given access to a special 5 Year Fixed Mortgage Rate.

3.49%

This rate is well below the best rate offered by several major lenders.

5 year Variable is also available at 2.50%

Best Rates Best Service Best Advice

Self Employed Clients

Some Brokers and Bank reps say its more difficult to finance Self Employed  clients.

I would agree that there is more work involved but fundamentally nothing has changed.

Being prepared and understanding the Lenders Polices and paperwork will still get you up to 75% financing. You need your NOAs and T1 Generals right up front.  A 2 year average income will be used.

We also have the B Lenders who will do these deals for a higher rate to compensate for the perceived risk of no income proof.  You can get up to 80% financing here.

As always use an experienced Broker to get the best results

5 Year Rate Starts to Drop

As I predicted, the first of many Lenders has announced a small but promising reduction in its Fixed 5 year mortgage rate.

Merix has reduced its 5 year Genworth Insured mortgage to 3.64% from 3.69%

I predict because of the 5 year bond rate dropping to August levels rates may drop more in the near future.

In the meantime, the Variable at 2.60% and 2 year and 3 year mortgages at 2.99% and 3.19% are still attractive

Use an experienced Mortgage Broker and get the best advice, service and rates.

Mortgage Rates Soar

The 5 year term has gone up again this week reaching as high as 3.79%. This is an 90 point jump since July. The average mortgage payment in Burlington is up about $225.00 a month.
 What are the Alternatives?
Shop around, I still have some Lenders at 3.59%.

Another good Alternative is the Variable mortgage which has become popular again. Prime minus . 40 gives you a rate of 2.60%.
The risks are an increase in the Bank of Canada rate and you need to qualify at the Canadian qualifying rate of 5.49%.  I think its a good choice for qualifying clients.

Lastly choose a shorter term like a 2 Year at 2.99%

Overall, I think the rates will fall again as the Bond settles down and greed for market share amongst the lenders forces more competition.