Author Archives: Gary

What is a Sub-Prime Mortgage in Canada?

Subprime Mortgages in Toronto Canada

There are three types of major mortgage lenders in Canada, which include traditional (chartered banks and mortgage houses), sub-prime (B-Lenders), and private lenders.

A traditional mortgage source basically focuses on clients who possess good credit and jobs and are buying real estate under the traditional guidelines. However, not everybody qualifies for a mortgage under the traditional guidelines and these potential buyers often seek financing help from a subprime or alternative non-conforming lender. Sub-prime lending basically means lending to the riskiest homebuyers due to poor credit or a history of late or missed payments.

In general, a subprime lender won’t provide a client with a high-ratio mortgage. For example, you’ll probably need to have a down payment of at least 20 percent of the property’s purchase price. In addition, a subprime lender will typically charge from one to three percent more over traditional interest rates and will prefer to offer a shorter-term mortgage. Subprime lenders are often seen as an ideal alternative to homebuyers who have poor credit. Some borrowers dig themselves into a financial hole and can’t dig out of it unless they can refinance their property and use the equity from it to help pay off their debt.

When applying for a mortgage or loan with a sub-prime lender, there are several guidelines and tidbits of information you should know. For example, the property can be a rental or owner occupied, but it generally needs to have fewer than four units. The real estate needs to be in a marketable urban area and the equity minimum or down payment should be at least 20 percent. The terms of the loan can be as short as one year, but the interest rate will typically be one to three percent higher than the standard rate. There are usually only fixed mortgage options available, with no variable terms being provided. Also, your current mortgage can’t be in default. While the above information can be used as a guideline, it isn’t written in stone. All loans are unique and are treated differently.

The main thing you should be asking yourself is if the loan makes sense for your current situation. This is where an experienced team of mortgage professionals such as MortgageMeister.com can help. We’ll be able to thoroughly study all of your options and assist in helping you make the right choice for your unique needs and situation. Unfortunately, homebuyers with bad credit will typically pay a higher interest rate than somebody with excellent credit because they’re seen as a greater risk. However, at MortgageMeister.com, we aim to find the best options for your loan and can help you improve your credit rating quickly in order to get you back into a traditional loan upon renewal.

Please feel free to speak with one of our mortgage specialists to discuss the options of a subprime loan or other alternative lending programs.   At MortgageMeister.com, our dedicated team of advisers and specialists will work hand in hand with you to help you find a mortgage for a new property, or to remortgage an existing home, through any of the funding avenues mentioned above.

Using Hard Money Loans When Investing In Real Estate

Hard money (private) loans for real estate investment often result in quicker portfolios and greater wealth for investors. Investments can often provide a consistent flow of cash and long-term wealth for your family and yourself. Hard money is generally borrowed by an investor who’s looking to buy a renovated property and traditional mortgage lenders typically…Continue Reading

What does it Mean to Remortgage and How Does It Work?

What does it Mean to Remortgage and How Does It Work?

Many Canadians remortgage their home as a way to reduce their monthly payments, pay off their debts or to reduce the interest rate and term of their current mortgage. Basically, remortgaging your property means breaking your old contract and putting in place a new one, often by switching the mortgage from the current lender to…Continue Reading

Why It May Be a Good Time to Refinance Your Mortgage

Why It May Be a Good Time to Refinance Your Mortgage

Even though your current mortgage guarantees the interest rate won’t change, many Canadian homeowners can receive a lower rate when refinancing their mortgage. This could be quite beneficial to you even if there are certain financial penalties incurred. Receiving a lower interest rate over the term of the mortgage could result in considerable savings over…Continue Reading

What is a Collateral Mortgage?

A collateral mortgage is basically a loan, or more than one loan, which is secured when the borrower uses their home or property as collateral. This gives the lender added security since he or she can take over the property if the borrower happens to default on the loan. Before agreeing to a collateral mortgage,…Continue Reading

Private Lenders For Business Loans

Private Lenders For Business Loans

Looking for a business loan but can’t get one from the bank?  Maybe finding a private lending can help. There are thousands of fantastic business ideas floating around Canada each and every year, but many of them don’t come to fruition simply because people may have a hard time acquiring a loan. Most businesses need…Continue Reading

7 Reasons Your Mortgage Application Might Get Rejected

7 Reasons Your Mortgage Application Might Get Rejected

Not everybody has their mortgage application granted as thousands of Canadians dejectedly find out each year. An approval doesn’t always come easily or quickly and there is usually a good reason or reasons why. When it comes to traditional mortgage lenders such as banks, the decision to accept or deny a request for a mortgage…Continue Reading

A Guide To Reverse Mortgages in Canada

A Guide To Reverse Mortgages in Canada

After years of taking care of monthly mortgage payments, most Canadians find the majority of their net worth is more or less locked away as equity in their homes. If they do find themselves needing money, it can often be an arduous and complicated task. However, the reverse mortgage may offer a solution to that…Continue Reading

Just finalized my mortgage with @MortgMeister. Took exactly one day, now off to the cottage! #HighFive

Definitely not the same experience I had with the bank, thanks @MortgMeister #ThatWasEasy

Just got my quote from @MortgMeister, my wife gave me a high five when she saw it. Thanks Jeff!

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