Not sure which mortgage is right for you?
Why Is Loan To Value Important To Mortgage Lenders
Loan to value is important to mortgage lender because it help them to determine risk. The higher the degree of risk for the lender usually indicates a higher rate of interest and costs applied to the loan.
Past client who owns a bare land strata in Coquitlam BC needed some extra money to help with living expenses. Client is a senior has limited income but has a common law wife still working and his house was valued at $950,000. Client had a 1st mortgage of $377,000 with a B-Lender but did not have enough income to support a larger 1st mortgage. Added to this there were several years before his 1st mortgage was coming up for renewal and a large penalty if he paid out.
Second Mortgages are a fast and easy way to obtain money using a home equity loan to do things like: debt consolidation, home renovations, create fast business capital if your self employed, pay outstanding bills like taxes or liens. These are great for reducing payments, paying out debts or increasing cash flow but what else should you consider?
If your income doesn’t qualify you for a bank loan and a B Lender is your only option, you might be wondering how much B Lender mortgage rates would cost you. B Lender rates in BC Canada for 1 year fixed rates can start as low as major banks’ 5 year fixed rates. What is important to keep in mind though, is that B Lenders do charge a lender’s fee while the responsibility for all legal & appraisal costs is on you. Since not all B Lenders have the same fees and their mortgage rates are set on a case by case basis, there may be additional costs involved, so get in touch for a complete review of your situation.
For the self employed it is common to wonder if you can get a home equity loan if you are self employed and have low income. Many self-employed individuals think due to their business for self income that banks & other lenders are less likely to approve them for a home equity loan. Banks do have tougher criteria for approving a HELOC and usually look at things like credit & income documents but there are many products out there that can help.
If you are self employed chances are at one time or another you have been late or missed paying your taxes.
CRA has strong powers enabling them to collect missed taxes. CRA can withhold child tax credits, GST credit take money from bank accounts or pay cheques as well you will be charged interest on the taxes you have outstanding.
Client needed funds to do some debt consolidation and home renovations with the intent to sell in just over a year. Clients credit was great but the income was very low and not enough to sustain conventional debt service requirements with a bank. They now have the funds they need to renovate their home and consolidate debt as well as assist them with payments over the term of the mortgage.
Client came to Jeff Di Lorenzo of The Mortgage Group Vancouver with a home under foreclosure located in Central BC. This client had many judgments on title plus property taxes outstanding. Client also owned a parcel of land that was previously listed for sale. It turned out that the parcel of land also had property taxes owing for over three years and the crown seized the property without the clients realizing.
Self employed and have trouble providing enough income to qualify under your banks strict guidelines? You seen self employed mortgage videos and read many financial articles on it, but for many BFS income earners providing proof of income can significantly affect their business due to the amount you will be required to pay in personal income tax. Most banks have products that allow you to state income but the income stated must be groused up 15% from your income claimed. For many business owners this just does not provide enough income.
Private mortgage lenders fill the gap when banks and home owners needs do not match. In life there are ups and downs but for bank profits they only want to look at the ups. This is where private mortgage lenders come into play. They will consider financing solely based on your homes equity not income or credit.
