October 2018

 
 
 
 
 
Tom Miocevich
Mortgage Agent
Dominion Lending Centres Edge Financial
FSCO Lic. # 10710
Phone: 416-569-7283

Fax: 416 850 4325
 
 
 
 
 
 
 
 
 
 

In this issue

 
 
The art of leveraging  
Does the bank have your back?  
About Dominion Lending Centres & DLC Leasing  
Homeowner Tips  
Did You Know...  
 

Hi Alyson

Welcome to the October issue of my monthly newsletter!

This month’s edition looks at getting a mortgage for an investment property any why the banks offer different rates. Please let me know if you have any questions or feedback regarding anything outlined below.

Thanks again for your continued support and referrals!

 
   
   
   
 
 

The art of leveraging

   
         
 

For some people, just owning one property and having a single mortgage is enough to handle. But for others, homeownership can be a gateway to owning multiple investment properties. You might be thinking: there’s no way I can turn the value of my modest home into a real estate empire. Ok, maybe not an empire, but you can take the equity of your home and, with the right investment, get a return far greater than a stock portfolio.

Most people are trained to stay out of debt and don’t want to consider using the equity in their home to buy an investment property. But they haven’t realized the art of leveraging.

If you’re using equity from your primary residence to buy an investment property, keep in mind that the interest you’re using is tax deductible. Consider you’re also buying an appreciating asset, and if you put a real estate portfolio to a stock portfolio side-by-side, they don’t compare.

Who is a good candidate? You might be surprised to learn you don’t need to make six figures to get into the game.

Essentially, you just have to be someone who wants to be a little smarter with their down payment.

Before you go down that road, there are some quick things you need to know.

 

With investment properties, the minimum down payment will jump to 20 or 25 per cent from five percent. Rental income from the property can be used to debt service the mortgage application, while some lenders will have a minimum liquid net worth requirement outside of the property.

Most lenders also limit the number of mortgages in a portfolio. Usually, after five mortgages, you’ll be considered a commercial file. However, a mortgage broker can work with other lenders to increase the number of investment properties.

Typically, when you’re considering a mortgage, you’re looking at the rate. But the rate is less important compared to your cash flow and future equity position. If it all sounds like a bit much, consulting a mortgage professional with an understanding of investment financing is the best way to start.

Most people who get into investment real estate think they’ll only end up buying one property, but that’s not usually the case. A broker will prep you for a 10-year plan of purchasing property and position you accordingly. A broker will also have a good understanding of the alt-side of lending and how you can benefit from that type of financing.

A mortgage broker with the right experience and understanding of financing rental properties can be an invaluable resource.

 
   
 

Does the bank have your back?

 
 
         
 

If your mortgage is coming up for renewal, you’re probably keeping a close eye on rates. But it can be a little bewildering to see the banks offering a bunch of different rates.

If you’re left wondering why, the short answer may be a little harsh. The banks offer different rates because they can, and consumers are brainwashed to believe the banks have their best interest.

So what can you do to get the best rate? To start, know that the bank does not have your best interest. Then, reach out to a mortgage broker for help.

A mortgage broker has no bias opinion on what lender they’re going to use. A reputable broker doesn’t care where they put the mortgage and has multiple lenders to choose from and compete for your business.

If you’re about to embark on the renewal process, you might want to try this approach. Tell your bank you’re working with a top mortgage broker and you

 

intend to call them bank every day to get their best five-year fixed and variable rate.

If your mortgage broker can’t beat the rate, you’ll likely be advised to stay there. However, most of the time, your broker will be able to get you a better rate, just based on the number of different lenders in which they have access.

When you go back to your bank, and they decide to match the new lower rate, you have to ask yourself an important question: If they really valued your relationship, why didn’t they just offer you that rate in the first place?

With a bit of homework and proper broker, nine out of 10 times they can get you a better rate.

Lastly, you need to keep in mind a mortgage is more than just a rate. You need to consider the personality of your mortgage, and certain aspect like the penalties to break the mortgage and if it’s portable. These are things a mortgage broker can help you figure out.

 
   
 
 

Homeowner Tips

Fall Lawn Care:

What you do for your lawn during the fall will have a great impact on what your lawn will look like next spring. There are four simple steps you can take to help ensure your lawn will be healthy, green and the envy of the neighbourhood next year:

1) Aerate. This means to puncture your lawn with small holes throughout to allow the fertilizer, sunlight, water and important nutrients that grass needs to grow deep within the ground;
2) Fertilize. Basically this means feed your lawn before it goes to sleep for the winter;
3) Overseed. This is when you spread new grass seed all over your existing lawn with a spreader; and
4) Mow. In November, mow your lawn one more time as short as you can without scalping your lawn. This will help all the other steps above work better.

 
 
 
   

About Dominion Lending Centres & DLC Leasing

 
         
 
 
We are Canada's largest and fastest-growing mortgage brokerage!
 
We have more than 2,600 Mortgage Professionals from more than 350 locations across the country!
 
Our Mortgage Professionals are Experts in their field and many are ranked among the best nationally.
 
We work for you, not the lenders, so your best interests will always be our number one priority
 
We have more than 100 mortgage programs, making it easy to choose the best fit for your unique situation.
 
We close loans in all 10 provinces and 3 territories.
 
We can process your mortgage in as few as 7 days.
 
We are the preferred mortgage lender for several of Canada's top companies.
 
Dominion Lending Centres' Mortgage Professionals are available anytime, anywhere, evenings and weekends - and we'll even come to you!
 
 

Only 23% of Canadians know their credit score, and just 26% knew their credit rating at the time they applied for a mortgage, reports a recent Equifax survey. A good credit score can be a major negotiating tool in getting lower interest rate mortgages from financial institutions. The study also found that 10% of Canadians surveyed say it’s okay to inflate your income when applying for a mortgage. And 9% say they have lied on credit card or mortgage applications. The numbers came as a shock to Equifax officials, given that the July survey of 1,500 Canadians was really aimed at gauging their concerns about protection of personal data.