Mortgage News

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Alternate Lenders

By Shirley Evans • 05 Mar, 2019

Most home buyers, when it comes to their financing, want the best rate possible. And that usually means turning to either the big banks, credit unions, or monoline lenders. In the mortgage business, these lenders a typically called, “A” lenders. If you’ve got good credit, a good job and decent down payment, you’re probably looking at one of these A lenders. But there are some people who don’t fit into conventional lending, and that’s where you might hear the term, Alt A, or alternative lender. What’s an alternative lender? An alternative lender is a mortgage company backed by investors offering mortgage financing with different guidelines on credit and debt servicing and a focus on the property and exit plan.

Alternative lenders are typically there for people coming out of a bankruptcy, with bruised credit, or are self-employed and need to prove some sort of cash flow.

Borrowers will generally need to have minimum 20 to 25 percent down.

There will be applicable lender and broker fees and rates will be higher than conventional lenders. But the rates may not be as high as you think. Some of these Alt A lenders are offering one-year rates between 4.35 and 5.8 per cent. And using an A lender can be a great stepping stone to getting back into a conventional mortgage with the best discounted rate and no fees.

With addition of tougher mortgage rules and stress tests, more people are turning to an alternative lender out of necessity.

If someone has enough equity, there’s always a lender who can assist with financing, but it will come with higher rates and fees.

If you find yourself on the outside of conventional lending, a well-qualified mortgage professional can help you navigate the alternative lending space to help you get the best product that fits your needs. Call me for all your available options.

 

Mortgage Rules and the new market

By Shirley Evans • 04 Jul, 2018

These new rules came into effect in January and come on the heels of several rate hikes from the Bank of Canada. And many economists and industry watchers are predicting the bank has a few more rate hikes instore before the year is out. We may already be seeing some of the effects of all this pressure on mortgage financing. Real estate markets, especially in the very heated Toronto-area, are starting to cool quite a bit. The Canadian Real Estate Association (CREA) has adjusted its forecast for home sales across the country, predicting an 11 per cent decline from 2017.

So, do you need to be worried?

If your mortgage is coming up for renewal and you’re staying with your original lender, you don’t need to be at all.


 For now, you can just renew without re-qualifying. However, there have been hints the government could change that in the future.

If you’ve got a steady job, a credit score over 700, no debts and you make $60,000 a year in salary, getting a mortgage also shouldn’t be a problem in this lending environment.

But, it could be tougher if you’re newly self-employed or carrying a large amount of consumer debt. That said, mortgage brokers have access to literally hundreds of lenders and can always find a way to get funding.

So taking everything into consideration, the best thing to do is review your portfolio with your mortgage broker. We’re still in a relatively low rate environment, but it could change come this time next year.

If your mortgage isn’t up until 2019, it may make sense to get out of your current mortgage and pay a small fee to get a better long-term rate.

It’s always a good time to review your mortgage because everybody’s situation is different regardless of where you are in your term.

Please comment or ask questions and I will respond as soon as possible!


 
 

My First Blog

By Shirley Evans • 04 Jul, 2018
More Posts

Alternate Lenders

By Shirley Evans • 05 Mar, 2019

Most home buyers, when it comes to their financing, want the best rate possible. And that usually means turning to either the big banks, credit unions, or monoline lenders. In the mortgage business, these lenders a typically called, “A” lenders. If you’ve got good credit, a good job and decent down payment, you’re probably looking at one of these A lenders. But there are some people who don’t fit into conventional lending, and that’s where you might hear the term, Alt A, or alternative lender. What’s an alternative lender? An alternative lender is a mortgage company backed by investors offering mortgage financing with different guidelines on credit and debt servicing and a focus on the property and exit plan.

Alternative lenders are typically there for people coming out of a bankruptcy, with bruised credit, or are self-employed and need to prove some sort of cash flow.

Borrowers will generally need to have minimum 20 to 25 percent down.

There will be applicable lender and broker fees and rates will be higher than conventional lenders. But the rates may not be as high as you think. Some of these Alt A lenders are offering one-year rates between 4.35 and 5.8 per cent. And using an A lender can be a great stepping stone to getting back into a conventional mortgage with the best discounted rate and no fees.

With addition of tougher mortgage rules and stress tests, more people are turning to an alternative lender out of necessity.

If someone has enough equity, there’s always a lender who can assist with financing, but it will come with higher rates and fees.

If you find yourself on the outside of conventional lending, a well-qualified mortgage professional can help you navigate the alternative lending space to help you get the best product that fits your needs. Call me for all your available options.

 

Mortgage Rules and the new market

By Shirley Evans • 04 Jul, 2018

These new rules came into effect in January and come on the heels of several rate hikes from the Bank of Canada. And many economists and industry watchers are predicting the bank has a few more rate hikes instore before the year is out. We may already be seeing some of the effects of all this pressure on mortgage financing. Real estate markets, especially in the very heated Toronto-area, are starting to cool quite a bit. The Canadian Real Estate Association (CREA) has adjusted its forecast for home sales across the country, predicting an 11 per cent decline from 2017.

So, do you need to be worried?

If your mortgage is coming up for renewal and you’re staying with your original lender, you don’t need to be at all.


 For now, you can just renew without re-qualifying. However, there have been hints the government could change that in the future.

If you’ve got a steady job, a credit score over 700, no debts and you make $60,000 a year in salary, getting a mortgage also shouldn’t be a problem in this lending environment.

But, it could be tougher if you’re newly self-employed or carrying a large amount of consumer debt. That said, mortgage brokers have access to literally hundreds of lenders and can always find a way to get funding.

So taking everything into consideration, the best thing to do is review your portfolio with your mortgage broker. We’re still in a relatively low rate environment, but it could change come this time next year.

If your mortgage isn’t up until 2019, it may make sense to get out of your current mortgage and pay a small fee to get a better long-term rate.

It’s always a good time to review your mortgage because everybody’s situation is different regardless of where you are in your term.

Please comment or ask questions and I will respond as soon as possible!


 
 

My First Blog

By Shirley Evans • 04 Jul, 2018
More Posts
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