Seeking a Mortgage?
Residential Mortgages
Residential Mortgages consist of a loan that one or more persons receive in order to buy a house or any other residential property in which they will live in. The loan is secured by a lien on the property. After a loan is secured by a security interest in one or more assets, the borrowers repay it over a specified amount of time.
A mortgage loan, or simply mortgage, is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms.
The lender will typically be a financial institution, such as a bank, credit union or private lenders, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The lender's rights over the secured property take priority over the borrower's other creditors, which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.
Mortgage for Self Employed, Professionals and New Immigrants
The mortgage application process for self-employed professionals is quite similar to the regular application process. You will still receive a quote, fill out an application, sign some paperwork and provide the necessary supporting documentations. The difference however with the mortgage application process for self- employed professionals is the documentation requirements. Self-employed professionals are required to show documentation including financial statements prepared by a certified accountant alongside Notices of Assessment. The documentation requirements will vary depending on if you are a sole proprietorship or a corporation.
As a new immigrant to Canada, it is important to gather the necessary requirements for your mortgage before your arrival. A good credit history is extremely important when you are trying to get a mortgage.
Though you may not have any credit history that Canadian banks recognize as a newcomer, you should start getting a new credit history as early as possible. Most homebuyers need a mortgage loan for the purchase of their home. There are many exclusive programs tailored for new immigrants (i.e. StartRight program, Welcome to Canada Program etc.) and also for the self employed individuals.
Mortgages for people with derogatory credits
A derogatory credit is an item that is considered negative and represents credit risk to lenders. This will have a significant effect on the ability of a person to obtain a loan or a mortgage.
Mortgage Borrowers may qualify for home loans with Derogatory credit items and bad credit at a certain lenders. The key question is has the borrower re-established their credit after period of bad credit? Lenders understand that people go through periods of bad credit when they have a disruption of income flow. Cases where consumer can not pay their bills on time is when they have extenuating circumstances as the following:
- Loss of job
- Loss of business
- Divorce
- Death in family
- Medical Issues
- Other issues where it disrupts household income
Equity Line of Credits
An equity line of credit is a secured form of credit. This is when the lender uses your home as a guarantee that you will pay back the money you borrow. A certain time limit will be set by the lender and during that time you can withdraw money as you need it. A home equity line of credit typically has a variable rate. Many major banks in Canada have various equity lending programs in order to cater the customers needs.
Commercial Mortgages
A commercial mortgage is a mortgage loan secured by commercial property, such as an office building, shopping center, industrial warehouse, or apartment complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.
Commercial mortgages are structured to meet the needs of the borrower and the lender. Key terms include the loan amount (sometimes referred to as "loan proceeds"), interest rate, term (sometimes referred to as the "maturity"), amortization schedule, and prepayment flexibility. Commercial mortgages are generally subject to extensive underwriting and due diligence prior to closing. The lender's underwriting process may include a financial review of the property and the property owner (or "sponsor"), as well as commissioning and review of various third-party reports, such as an appraisal.
Refinances and Switches
Refinances occurs when there is a re-evaluation of entities credit terms and credit status. Loans that are typically considered for refinancing includes mortgage loans, car loans and student loans.
Debtors will usually choose to refinance a loan agreement when the rate environment changed causing savings on debt payments from a new agreement.
Switches also called a switch mortgage or transfer mortgage involved moving your current mortgage from one lender to another without changing anything except for the term and interest rate. When you want to take advantage of lower rates in the market without having to change any part of your mortgage, a switch is the most beneficial.
Refinances are mostly sought by the home owners for consolidating debts or to take some equity for other investments. Refinancing process is completed involving a lawyer at the closing.
Equity Transfers and Take Outs
The Transfer of Equity refers to the process where the ownership of a share or interest in a property is transferred from one entity to another. An example of this is when property owner may transfer equity to their children or other family members in order to manage their tax liabilities.
Take Outs can also be called a takeout loan or takeout financing. This is long-term financing that the lender promises to provide at a particular date or when certain criteria for the completion of a project is met.