Renewing Your Mortgage

Most common use of private mortgages: debt consolidation, investment in business development, renovation, purchase of property, kids education. Mortgage can be in 1 st, 2 nd, or 3 rd position. There are a few different products with private lenders, and I can help to choose right mortgage for you. 

Private lenders lend based on the equity in the property, not client’s income or credit. Usually to get private mortgage all we need is application, credit bureau, and appraisal. Private lenders lend up to 75% of the property value (in some cases up to 80-85%). Typically rates for second mortgage from 8.95% to 12%, and fees 2%-5%. There are also appraisal fee $300-$400, and legal fee $1200-$2000. Only appraisal fee has to be paid upfront, all other fees will be deducted from the mortgage. Mortgage can be open or closed, and even can be arranged as Line of Credit. We can fund very fast. 

Normally private mortgages have interest only payment, which is much lower than credit card payment at 3% of the balance. 

For example on $50000 mortgage at 11% monthly payment $458.33 (compare with $1500 on credit cards).  

PRIVATE MORTGAGES:

With private mortgage, clients should not only look at the rate and the fee for the mortgage.

Very important is also renewal fee. Some lenders charge a $200 renewal fee, and some up to 1.5% of the mortgage amount. Some lenders also will increase rate by 2%-4% after 1st year, but most of the lenders keep the same rate. 

There also legal fees for lender's lawyers that needs to be considered. Most of the lenders will use only 1 or 2 lawyers to represent them, and the fee could be from $950 to $3000.

HOME EQUITY LINE OF CREDIT (HELOC).

HELOC can be register as a first or second mortgage and based purely on the equity in your home. This is very similar to bank Line of Credit, and a very convenient product for clients who need money in and out all the time.  

No income verification required. No pay stub, or tax return, no upfront fee. Only need mortgage application, and appraisal ordered by the lender.

Rates from 7% in the first position, and from 9.95% in second, up to 75% of the property value, up to $1m.

HOME EQUITY VISA is another good product. It's registered as a 1st or 2nd mortgage and can be up to $250,000. Rate from 5.99% and clients get 1% cashback on purchases. For this product, the lender wants to see business registration, and confirmation that business actually makes money (business bank statements showing deposits, paid invoices, etc). Don't need to show tax return.

B LENDERS.

When you are not qualified with your bank because of the credit or income issue, you can get a mortgage with B lenders. B lenders are also banks, with special programs for clients who have credit problems or income verification problems. Rates will be around 3.69%-4.5% for 1st mortgage. Clients would need to provide some income verification. Usually Business registration and account statements showing deposits from the business. 



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