Commercial Mortgage Rates – How Your Commercial Mortgage Broker Can Help You Secure Financing for Those Special Projects

Securing mortgage financing to purchase a regular home can be relatively easy – but how about when you want to secure funding for that special commercial project, be it a custom built home or a commercial property such as an apartment building or a retirement home? Once you have drawn up the plans and received the proper permits, securing financing at the best commercial mortgage rates requires the expertise of a professional commercial mortgage broker.

Not all mortgage brokerage firms employ a commercial mortgage broker, but those that do should have a large portfolio to help you secure mortgage financing at the most competitive commercial mortgage rates possible. Whether you are anxious to get stated on building your dream home from the bottom up, or are looking to expand your small business space, you will need the funding to accomplish these goals, and an experienced commercial mortgage broker can help you get it.

Why is it important to seek out the best commercial mortgage rates from a qualified commercial mortgage broker? Well, going directly to the bank won’t necessarily give you access to a variety of different lenders, thereby limiting the commercial mortgage rates that are available to you. By working with a commercial mortgage broker, one that routinely arranges commercial mortgages, you will have access to a wide range of banks and lenders, meaning that you can rely on your commercial mortgage broker to secure the best commercial mortgage rates out there.

Furthermore, by working with someone who is well versed in arranging commercial mortgages, you can be sure that all of the required protocols are followed, and that your expert commercial mortgage broker crosses all the T’s and dots all the I’s. They know what to expect when arranging commercial mortgage financing, rather than just residential mortgage financing.

Just like a traditional mortgage, commercial mortgages have terms (5 year term mortgage, 10 year term mortgage, etc.), and depending on the lender can be either fixed rate mortgages or variable rate mortgages. Commercial mortgage rates are really not that different from traditional mortgages, so don’t let the idea of them scare you – talk to your commercial mortgage broker and let them explain all of the fine print.

What types of projects are covered under commercial mortgages? There are several – big and small. Want to build an apartment building, condo or townhouse complex? A commercial mortgage broker can get you the money to do it. Thinking about building a retail space, such as a mall, or just adding on to your current retail location? Yes, that could be covered by a commercial mortgage. Restaurants, halls, nursing and retirement homes, hotels, bars, custom built homes, etc., are all covered by commercial mortgages and are the realm of the commercial mortgage broker. Even land development and land servicing are included.

Getting started on that new project – be it small or big – doesn’t have to be overwhelming, especially when it comes to commercial mortgage financing. Your mortgage broker can help your secure the best commercial mortgage rates and help get you started on that project right away.

For more information about commercial mortgage rates or to speak with a commercial mortgage broker, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.

Ontario Mortgage News– Types of Mortgages Part 4: High Ratio Mortgage vs. a Conventional Mortgage

Are you getting ready to buy a home and obtain mortgage financing? Knowing your options before jumping in is important. This is part 4 of a 4 part series that gives you important Ontario mortgage news and information about the various types of mortgages available in Ontario. Getting a mortgage does not have to be stressful, and knowing what mortgage types are available to you can help keep the search for your perfect home stress-free.

This final Ontario mortgage news blog will look at the high ratio mortgage and the conventional mortgage. First, what is a high ratio mortgage? A high ratio mortgage is a mortgage where the borrower puts down less than 20% of the total purchase price of a home as a down payment. In Ontario, a minimum 5% down payment is required on all home purchases, but you can put down as much as you like. However, if you put down less than 20% you have to get a high ratio mortgage.

So what does this mean? Well, having a high ratio mortgage means that it is necessary to purchase mortgage insurance, usually done by your lender. The premium for this insurance is usually calculated in as a closing cost, or can sometimes be financed through the mortgage.

Why do you need mortgage insurance with a high ratio mortgage? A high ratio mortgage necessitates the purchase of mortgage insurance because the lender is putting forth more risk and wants to protect their investment. If you are putting down less than 20%, there is a higher chance that the lender will not recoup those funds if you default, and therefore the insurance is there for their protection.

So what if you put down more than 20%? This is where a conventional mortgage comes in. Since you have placed what the lender considers to be a large enough down payment on a home, you can qualify for a conventional mortgage and are not required to buy mortgage insurance.

If you are putting down more than 20%, there is more immediate equity in your home and the lender acknowledges that you are less of a risk. Since there is less risk involved on the lender’s behalf, they will often provide much more favourable repayment terms and you may find rates a little more flexible.

So what are the benefits of these two types of mortgages? Simply put, if you want to open the range of properties you can have access to and are willing to put down less as far as a down payment, then a high ratio mortgage might make sense – or if you only have that 5% to put down then you are not prohibited from buying at all. However, if you want to feel more comfortable and put down a larger down payment and skip the mortgage insurance, then a conventional mortgage may be right for you. It all depends on your current and future needs and goals, so talk to your mortgage broker and see what they say.

For other Ontario mortgage news or for more information about high ratio mortgages and conventional mortgages, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.

Ontario Mortgage News– Types of Mortgages Part 3: Zero Down Mortgage

Are you getting ready to buy a home and obtain mortgage financing? Knowing your options before jumping in is important. This is part 3 of a 4 part series that gives you important Ontario mortgage news and information about the various types of mortgages available in Ontario. Getting a mortgage does not have to be stressful, and knowing what mortgage types are available to you can help keep the search for your perfect home stress-free.

This third Ontario mortgage news blog will focus on the zero down mortgage. So what is a zero down mortgage? As its name suggests, it is a mortgage that requires you to put no money down as a down payment on a house. In Ontario, according to Canadian Mortgage and Housing Corporation guidelines, a minimum 5% down payment is required for every house purchase in the province. But sometimes saving is easier said than done, and so a zero down mortgage can be the ideal option if you are ready to buy a house but are lacking the funds for that necessary 5% down payment.

How does a zero down mortgage work? A zero down mortgage is a mortgage that combines traditional mortgage financing with your down payment. This means that the interest is usually a bit higher (usually 1-2% above prime) to allow the bank to recoup its financing of your down payment. Furthermore, it is set for a period of no less than 5 years so that the bank can get back those down payment funds.

Are you asking yourself will I get approved for a zero down mortgage? Well, here are some things to keep in mind. Qualifying for a zero down mortgage means having a great credit score and pristine credit history. Since the bank is fronting the entire mortgage rather than just a portion of it, they want to make sure that they are protected – so if your credit is not great it is unlikely that you will get approved for a zero down mortgage.

What about flexibility? Well, a zero down mortgage offers less flexibility than say a variable rate mortgage or a fixed rate mortgage. Because you are relying on the bank to back you, they give far fewer options, such as setting the length of the mortgage or setting a variable versus a fixed rate. However, as far as giving you the chance to buy without a down payment, it is an important option.

If you are ready to buy a house but are without the required minimum 5% down payment, but do have good credit history, a zero down mortgage may be an option for you. Instead of stressing over where to find that down payment or having to wait until you have saved it all, speak to a mortgage broker about the benefits of qualifying for a zero down mortgage right now.

For more Ontario mortgage news or for more information about a zero down mortgage, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.

Ontario Mortgage News – Types of Mortgages Part 2: Variable Rate Mortgage

Are you getting ready to buy a home and obtain mortgage financing? Knowing your options before jumping in is important. This is part 2 of a 4 part series that gives you important Ontario mortgage news and information about the various types of mortgages available in Ontario. Getting a mortgage does not have to be stressful, and knowing what mortgage types are available to you can help keep the search for your perfect home stress-free.

This second Ontario mortgage news blog will focus on the variable rate mortgage. What is a variable rate mortgage? A variable rate mortgage is a type of mortgage financing that fluctuates according to rising or falling interest rates. This means that, when your mortgage broker finds a lender to approve your variable rate mortgage, your payment is not static and may change if interest rates change. There are many advantages to this type of mortgage.

Firstly, if you tend to follow the philosophy that no risk means no reward, you understand that taking some risks could equal major savings in the long run. A variable rate mortgage can provide this. Since it is based on the rate of interest, if this decreases, so does your monthly payment. If it decreases substantially, then this could equal big savings for you.

Another big benefit to a variable rate mortgage is the fact that variable rate mortgages usually offer the lowest mortgage rates available. Since the bank or lender approving your mortgage recognizes the risks that are inherent in a variable rate mortgage, they offer the lowest rate to you. This means that even if the interest rate does increase slightly over the term of your mortgage, you will likely not feel the sting.

It is important to remember though that as the Canadian economy improves, interest rates may increase if the prime lending rate is increased by the Bank of Canada. That being said, many lenders do provide options with variable rate mortgages that will allow you to lock in your variable rate mortgage if interest rates do increase.

Why choose a variable rate mortgage. If you are not afraid to take a bit of a risk in exchange for the chance to save, or if you are planning of staying in your house for a very short period of time, a variable rate mortgage may provide the best financial solution for you. However, if your plans are more long-term, you may want to discuss the option of a fixed rate mortgage with your mortgage broker.

Mortgages don’t have to be complicated, and you should avoid getting stuck in a mortgage you don’t understand by visiting a mortgage broker and getting them to explain all of the different options available to you.

For more Ontario mortgage news or to find out more about the benefits of a variable rate mortgage, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.

Ontario Mortgage News– Types of Mortgages Part 1: Fixed Rate Mortgage

Are you getting ready to buy a home and obtain mortgage financing? Knowing your options before jumping in is important. This is part 1 of a 4 part series that gives you important Ontario mortgage news and information about the various types of mortgages available in Ontario. Getting a mortgage does not have to be stressful, and knowing what mortgage types are available to you can help keep the search for your perfect home stress-free.

This first Ontario mortgage news blog will focus on the fixed rate mortgage. The fixed rate mortgage is often the most popular, but what is a fixed rate mortgage? Well, a fixed rate mortgage is a type of mortgage financing loan where the interest stays the same throughout the entire loan period, as opposed to other mortgage loans where the interest rate may adjust. This means that your interest rate is ‘fixed’ and that it does not fluctuate over the course of the term.

There are many benefits to this type of mortgage, and many things to consider when looking for the best mortgage financing rates to suit your needs.

Firstly, a fixed rate mortgage offers you the convenience of a set monthly payment that does not change. Set at the beginning of the mortgage loan period, a fixed rate mortgage will not increase or decrease as interest rates change. This means that there are never any unwelcome surprises when it comes to that monthly withdrawal.

A second, and arguably even more attractive benefit, is that, since a fixed rate mortgage will not change even if interest rates change, that you are protected in case of a dramatic interest rate hike. So, even if two years from now the interest rate skyrockets, your rate will remain the same throughout the entire term of the mortgage, ultimately saving you a great deal in terms of interest fees.

What is the normal length for a fixed rate mortgage? Although term lengths differ from lender to lender, the most common length for a fixed rate mortgage is 5 years. However, most lenders will offer a one year term mortgage, two year term mortgage, three year term mortgage, four year term mortgage, and some lenders may even offer a ten year term mortgage. The term you choose will largely depend on your future financial goals and all options should be discussed with your mortgage broker.

Why choose a fixed rate mortgage? As mentioned, the convenience of a set monthly mortgage payment and a never changing interest rate make a fixed rate mortgage ideal for many. Compared to a variable rate mortgage, a fixed rate mortgage may be a bit more expensive, but it also involves a lot less risk to you (since a variable rate mortgage fluctuates depending on an ever changing interest rate). No hassle means less stress for you!

For more Ontario mortgage news or to find out more about a fixed rate mortgage, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.

How to Consolidate Debt by Refinancing Your Mortgage

If you are a homeowner with substantial debts you may be asking yourself ‘should I refinance my mortgage in order to consolidate debt?.’ Getting rid of debt by refinancing your mortgage can often be a smart financial option to consider to eliminate those pesky interest fees that often leave you paying very little of your overall debt load.

With current mortgage rates at an all-time low, refinancing your mortgage to consolidate debt can mean big savings to you. Rather than continuing to carry those other debts (credit cards) with high interest rates, accessing the equity in your home by refinancing your mortgage allows you to pay them off and save with a much lower mortgage interest rate.

What is mortgage refinancing? Mortgage refinancing means paying off your current mortgage, as well as other debts that you want to get rid of, by setting up a new mortgage. Basically, your old mortgage is paid off with your new one – rather than getting a second mortgage and tacking it on top of the original one.

A second advantage of refinancing your mortgage to consolidate debt is that it gets rid of all of those individual monthly payments and leaves you with one tidy monthly payment. Trying to keep track of all of those payments (many of which are primarily interest) can get you into trouble as far as your credit score, and so consolidating payments into one leaves you with less stress and more time (not to mention more free cash flow)!

Yet another benefit of refinancing your mortgage to consolidate debt is that you can change the type of mortgage or get a new interest rate. Depending on your financial goals, switching from a fixed rate mortgage to a variable rate mortgage or an adjustable rate mortgage, or vice versa, can end up saving you money on interest. Refinancing your mortgage gives you this opportunity, so not only can you save interest by consolidating debt, you can also save by switching mortgage types.

So how can you go about refinancing your mortgage to consolidate debt? There are a few things you need to do/know before you go to your mortgage broker for approval.

1.       Make sure that your credit score is up to par – if it is low, you may not be able to secure mortgage refinancing, so clean it up (a mortgage broker can help you with this).

2.       Be truthful – if you are refinancing to consolidate debt, be upfront with your mortgage broker so that they are able to provide you with the options that best suit your individual needs. There are several reasons that people refinance, so make sure that your mortgage broker knows so that they can provide you with the right services.

3.       Seek mortgage refinancing through a mortgage broker rather than through an individual bank. A good mortgage broker will have access to several different lenders and financial institutions and thus will be able to secure you the best rate for your mortgage refinancing.

Refinancing your mortgage to consolidate debt is a smart financial solution that can save you thousands on interest. Working with a mortgage broker to find the best rates and find the mortgage refinancing solution that meets your needs is crucial.

To find out more about refinancing your mortgage to consolidate debt, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.

Ontario First Time Home Buyer? The Importance of a Mortgage Affordability Calculator

Are you getting ready to buy your first home but asking yourself ‘what mortgage can I afford?’ Don’t worry; there are some great resources out there for the Ontario first time home buyer, one of which is crucial: the mortgage affordability calculator. Before setting out to get a mortgage or making an offer on that perfect home, use a mortgage affordability calculator to make sure that you can afford and feel comfortable with the amount that you are spending on a mortgage.

What is a mortgage affordability calculator and how will it answer the question ‘what mortgage can I afford?’ A mortgage affordability calculator is a program that inputs both your monthly income and monthly output and calculates what an affordable monthly mortgage payment would be. By using a mortgage affordability calculator you can quickly determine what a maximum monthly payment would be and then decide how much you would actually be comfortable spending.

What criteria does a mortgage affordability calculator use to determine what mortgage you can afford? The equation is based on a number of factors, both actual and anticipated.

Actual: Actual factors include both input and output. Input refers to your gross monthly household income – or how much money you bring in every month. Subtracted from this is your actual monthly output, which refers to all financial obligations you are required to make on a monthly basis. This includes all debt (credit card, personal loans, etc.), car payments, etc.

Anticipated: Anticipated payments are all of those payments that you will likely have to make once you move into the house. Although you can often get a pretty close estimate, these may fluctuate, but having at least a somewhat accurate figure will let you use the mortgage affordability calculator to get a good idea of what you can afford. These anticipated payments may include insurance, property taxes, condominium fees, heat and hydro fees, etc., and are usually things that cannot be avoided (unlike things like cable or internet which are not included).

The mortgage affordability calculator then looks at your borrowing details – your down payment on a house, your mortgage interest rate, and your mortgage amortization period – and gives you a calculated result. These results will tell you 3 very important things: your maximum house price, your maximum mortgage (your maximum house price minus your down payment) and your maximum monthly mortgage payment.

As an Ontario first time homebuyer, a mortgage affordability calculator is an important tool to take advantage of. It allows you to get a clear picture of what your monthly payments would total as well as how much you will be able to afford once that house is in your possession. Instead of going to see a Mississauga mortgage broker with no idea of how much you are comfortable spending, or no idea about how to determine this figure, prepare yourself for the process and use a mortgage affordability calculator.

For more information about the benefits of a mortgage affordability calculator or other resources if you are an Ontario first time home buyer, please contact Paul Mangion of The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com.