Secondary Mortgage Market in GTA – Weighing the Pros and Cons

Home sales in the Greater Toronto Area (GTA) have decreased this year compared to last. The Toronto Real Estate Board reported that sales were down almost 35 percent in February 2018 compared to February 2017. In addition, prices have dropped, with the average sales price falling 12.4 percent for all housing types.

As 2018 moves forward, buyers are getting used to the new mortgage rules and the government regulations that went into effect on January 1 of this year. Home buyers are adjusting to the new housing market measures and have had to recalibrate their plans because of the higher interest rates and new mortgage stress testing guidelines.

What that means is that realtors have to be creative if they’re going to make sales in this market.

For both buyers and realtors, the secondary mortgage market can provide an alternative to traditional bank mortgages, one that in many instances, should be considered. Obtaining a mortgage from an alternative lender is frequently easier and quicker than getting a traditional mortgage. While it is true that buyers often need to have a larger down payment, and the loans are generally more expensive, the secondary mortgage market can provide a solution for buyers who are looking for a different course of action and for realtors who want to help their clients.

One of the great advantages of the secondary mortgage market is that it can provide a short-term solution for buyers who can then, at a later date, make different arrangements, perhaps through a traditional bank mortgage.

For example, a GTA home might have been selling for $1.4million a year ago, and today that same home will likely go for $1.05 million. If a buyer is putting 25 percent down, they will carry a mortgage of $787,500. Most secondary mortgages have a duration of one year or less. So, at 8 percent per year, the buyer is paying in one year 4 percent extra on the mortgage, or $31,496. That means effectively that the property costs an extra $31,496. That’s not really significant since the buyer could close in a buyer’s market that’s discounted. In a year’s time, the buyers can investigate refinancing with a traditional bank mortgage, and will hopefully be in a much better situation.

Realtors who want to guide buyers towards the secondary mortgage market should exercise caution, however, and recommend alternative lenders only to those buyers who can carry such a mortgage and have the financial resources and income ability to refinance within a year.

I would also recommend that GTA realtors who are interested in offering advice about the secondary mortgage market establish direct relationships with alternative lenders rather than with mortgage brokers; brokers will often charge substantial fees, which can add to the costs incurred by the buyers.

Although sales in the GTA market have taken a downturn, there are still a number of ways for both buyers and realtors to take advantage of the market conditions.

Borrowing Money with Poor Credit

It can be extremely frustrating to have bad credit. Even if you are responsible with money now, poor decisions that you made in the past can make it so that you are treated like someone who is not. However, all hope is not lost in this situation, as you will still be able to take out certain types of loans even with a lower credit score. Generally speaking, short-term loans are more available to people with poor credit than are more traditional types of loans.

However, it is important to keep in mind that these loans are not better in every way just because they are more available. If you do not meet the specifications to get the loan on your own, you will often need a cosigner in order to be able to borrow the money. Essentially, because your credit score marks you as a risk to the lender, they need to have someone with a higher credit score held responsible for paying them back if you end up defaulting on the loan. In order to find the right cosigner, you will need to find someone who is willing to help you out with this and who has a credit score that is high enough for the lenders to accept (if the cosigner’s credit score is also too low, the loan will be denied).

Additionally, you should be aware that if you are borrowing money with less than perfect credit, you should anticipate quick cash loan rates to be higher than other types of loans. Lenders of these types of loans do this because, again, you are considered more of a risk if unable to show a strong credit history, and they stand to lose less if they put a higher interest rate on your loan. You should make sure that you are able to make the repayments with the higher interest rate, and that you are able to fit all of the interest that you will have to pay on this loan in your budget during the repayment period.

However, there are also positive aspects to borrowing money with less than perfect credit. Using loans to build credit is always a possibility. If you are able to take out the loan and successfully pay it back over time as promised, this will improve your credit score and make it so that you may have better options in the future if you ever need to borrow money. With a higher credit score, you will be able to consider more types of loans that you are able to borrow, in addition to ones with lower interest rates that are available to people with good credit. In this way, you can use this experience to prevent your current credit situation from limiting your loan options in the future.

As you can see, there are many things to keep in mind when you are borrowing money and you do not have good credit. You should make sure that you are able to pay back the loan before you enter into the agreement, as if you end up defaulting on the loan, this will lower your credit score even more and make it so that you end up with even fewer options the next time you need to borrow money. Additionally, this will put you into even more debt with the additional late fees and interest that you will have to pay. Overall, when you are taking out a loan, make sure that you are responsible and plan ahead.

Why More Canadians Are Retiring With Debt and What It Means

As Canadians, we live in a country where certain rights and freedoms are expected, hoped for and, some might say, taken for granted. The freedom to retire early is one many of us begin grappling with as we approach middle age. Ironically, many Canadians won’t be ready to retire until they are significantly older.

The reason? Debt.

Unfortunately, too many retired people – 34% — over 55 years old still carry consumer debt, according to Statistics Canada. In fact, a recent Equifax Canada report found that the debt load of seniors is outpacing that of their younger counterparts.

It’s not as though Canadians have always carried a heavy debt burden. In 2012, 42.5% of people over 65 still had debt, a jump of 55% when compared to seniors in 1999.

A number of economic, social and cultural factors are to blame, say experts. They point to divorce, illness and large mortgages as some of the culprits. Experts also explain that children, grandchildren and other family members may also be at fault, as they often look to their parents and grandparents to lend them hand. In fact, a 2015 survey showed that 18% of first-time home buyers are gifted their down payments thanks to relatives, typically parents.

But, children can’t shoulder all of the blame.

Low interest rates have made debt much more attractive. Further, cottages, pricey vacations, fancy cars and other expensive toys may be out of reach for the average pensioner. Paring down and cutting back in your sixties may not seem fair. After all, you’ve worked decades, aren’t you entitled to a little luxury? Your fixed retirement income simply may not support your lifestyle any more. Perhaps it’s time to downsize and sell your 3,000 square-foot home?

If selling isn’t an option, many house-rich, cash-poor seniors can look to their houses for equity. Often by the time a person retires, he or she has either paid off their mortgage or is only owing a small amount. Because house values have increased in recent years, in some markets quite significantly, tapping into a home’s equity may be something to consider.

Still, as a borrower, you need to be aware of how you are intending to pay back the loan. Is it possible to make monthly payments or would you prefer to have your estate pay off the loan after you die?

No matter how the money is borrowed, the process should be well planned out. Know what you need it for. Have a repayment plan in place. Don’t borrow more than you need – that often leads to trouble.

Dwayne Rettinger

Executive Financial Consultant

Investors Group Financial Services Inc.

Rettinger & Associates Private Wealth Management

This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Dwayne Rettinger is solely responsible for its content. For more information on this topic or any other financial matter, please contact an Investors Group Consultant.

6 Must-Know Things Before Applying for a Jumbo VA Loan

If you are veteran of military or reserves or National Guard, your dream to have a primary home is one step away. The United States Department of Veterans Affairs (VA) guarantees a VA loan, which is a mortgage loan entitled to American veterans, spouses in case not divorced and reservists. The Department of Veteran Affairs also provides many other facilities such as healthcare services, help with loans and insurances and a Jumbo VA loan is one among them. As such, the VA doesn’t provide you with the loan amount; it facilitates the same with help of lender companies. Here in this article, we have tried to enlist six must-know things before you apply for a Jumbo VA loan.

1. Eligibility criteria

Not everyone can apply for a Jumbo VA loan. The Department of Veteran Affair has clearly laid ground rules to establish the eligibility criteria. The members of the military, a retired veteran, spouses of the personnel who served America and have not remarried after the death of husband and employees of the reserves or National Guard are considered to be eligible. The veteran must have served in the military for at least a period of six months or more, while the employees with service in National Guard or reserves must have done at least 6 years of service to be eligible. During wartime, the period of eligibility for the veteran military is considered to be around 3 months. So first step you have to take is to find whether you are eligible or not. You can also get an online eligibility certificate before you start the application process with all your relevant documents ready.

2. Loan and down payment amount

Generally, the counties have set a limit of $453,100 as a VA loan amount and anything beyond that is classified as a VA jumbo loan. In case of a VA jumbo loan, the borrower needs to pay a lump sum amount of around 25 % on the amount greater than $453,100. However, in some county areas where the prices of housing are too high, the down payment amounts are kept lower.

3. How can you use a Jumbo Loan?

A Jumbo VA Loan cannot be used like a personal loan or a traditional bank loans against any line of credit. The purpose of a Jumbo VA Loan is clearly set to fulfill the need for a primary home for a veteran. This amount hence cannot be used for buying or building a vacation home.

4. Funding Fees

A funding fee has to be paid by the borrower for the loan amount greater than $453,100 or as set by county till $1,000,000. The fee thus becomes less when you offer a down payment amount. Generally, veterans pay around 25 % of the amount as the down payment amount.

5. Interest rates

While the VA or the loan lending companies don’t take into consideration any past credit history or bankruptcy yet having a good credit score helps in getting lower interest rates. Normally a credit score of above 610 or 620 is considered to be okay but even a poor credit score doesn’t cause the rejection of Jumbo VA loan. If the veteran is in a job or has a recommendation from someone who has a good credit score, the lending companies are more than happy to carry forward the entire process.

6. Other advantages

Generally, a VA counselor tries to assist in case the veteran finds it hard to pay back the entire amount and a situation of foreclosure homes. There are hotline numbers to call for getting a VA jumbo loan and application can be filled online which makes it easy for veterans to start the loan process.


In the end, a Jumbo VA loan should be utilized by the eligible applicants due to the advantages it offers. Make sure to read the offer and documents carefully before applying for the loan. For example, be aware of the closing costs, interest rates and other terms and conditions.

How To Manage Debts More Efficiently

With the cost of living soaring, many people today cannot survive without debts.  Even the smallest of debts needs/has to be paid in one way or the other. Paying up your debts as required and on time is the only way you can manage everything, and possibly build your credit. Servicing large debts involves discipline and a little more effort. This is because you still have to pay rent, bills, and other responsibilities on your shoulder.  Discussed below are a few tips on how to manage your debts.

  1. Make a list of your debts

Make a list of all your debtors, including the creditor.  Be sure to include the total debt due, due dates, and how much you are required to pay per month. Making a list of all debtors and how much is owed should help you plan your finances better. Do not let the volume of the debt discourage you; it should just act as an eye-opener to help you see the bigger picture.  Don’t just make a list, create a proactive approach as to how you will settle each. Make an effort to settle some of the debts while paying for bills, and update the list accordingly.

  1. Pay your bills on time

Do not delay paying your bills unless it is absolutely necessary. Paying your bills on time will make servicing debts much easier. It also reduces chances of late payments or fees that come with the same. Missing a payment or two can have a negative impact on your finances, and credit as well.

Use a smartphone or computer calendaring system to help you plan for payments, and even create an early alert for the same.  Should you forget to send a repayment on time, do it as soon as you get some money. Don’t wait until the next repayment date to pay. Some banks and credit companies will report late payments to the credit bureau. Prompt payments are therefore recommended.

Tips to Help You Remember Due Dates

  1. Create a bill payment calendar

A monthly payment calendar can help you figure out what bills and debts need to be paid, and when. Remember to include the bill payment date and amount for easier referencing. Next, fill in your next paycheck date. If salaried, then make a point of settling bills and debts on the same payday. This should save you from overspending and even stay on top of your bills.

  1. Make the Least Minimum Payment

If your income doesn’t allow extra payments, make a point of paying the least permitted amount for your bills and debts.  Although it may not seem like much, making the least payment helps keep your debts on check, which also prevents chances of them accumulating. Your bank will even see this as a kind gesture, hence help you build your credit score. This, however, cannot be compared to missing a payment in the name of you’ll make a larger one next month.

  1. Service Urgent Debts First

Classify debts based on the repayment urgency. Credit card debts, for instance, should be treated as urgent compared to loans from friends. Credit card companies charge higher interest rates for late payments than banks do. It would also be advisable to pay off high-interest debts and loans first. This will help you save some money in the long run. If you have payday loans get them sorted first – one way is consolidation. Read here to see does payday loan consolidation work

Using your debt list, prioritize debts based on the order of urgency. Some people may choose to settle smaller debts first. This is ok for as long as you don’t default on any.

  1. Prioritize Debts

One thing you need to know about servicing debts is that you can only pay as much as you can afford. If you have more debts than you can afford to pay, then focus on keeping positive accounts safe. Only service overdue debts after paying for those in your positive accounts. Don’t rush to pay for a loan account that has already been affected by your credit. Creditors will however try to squeeze as much money as they can from your accounts until everything is settled. Don’t let too many of them start harassing you while you can prevent it.

How to pay off collections

  1. Use an emergency fund

Set up a small emergency fund to help get you out of situations such as an overdue loan. You could also use your savings to get out of debt. Don’t let your credit score be affected when you have access to a savings account.  You can start by creating an emergency fund. Most people start off with $1000, then increase the same as time goes by. You will be surprised how much you will have saved by the time 6 months are over.

  1. Plan your expenses for the month

Having a monthly budget in place can save you lots of frustration in the future. The budget should help you plan ahead, and even know times when your income won’t be enough. Setting up a monthly budget also enables you to save some money in the process.  You can even spend the extra money to offset the smallest of debts.

  1. Know when to seek help

It’s always wise to know just when you need help with debt. This mostly comes when you have nothing to offset bills, with the obligations staring at you. Seeking help from a debt relief company can help you with this. You could even opt for loan consolidation, debt settlement, or even bankruptcy as a last resort. You however need to weigh in the pros and cons of using either of these options.

Should you take a loan for your personal needs?

There are many people worrying about personal finance and related topics. With this thought in mind, we have come up with a post to help you realize whether there is a need to opt for a personal loan or not. In this post, we will talk about certain aspects that should be considered before considering a loan for your personal needs.

1. Is it really for your personal needs or not?

When we talk about loans, many people confuse the purpose of the loan. Some think that it doesn’t matter whether the loan is for personal needs all for business, what matters is whether the amount can be received or not. Don’t make this mistake and think twice before analyzing the purpose of the loan and this side accordingly. If it is really for your personal needs, check other point noted in this post.

2. The amount of loan

If you’re eligible for a loan, do not think that you should opt for the highest amount possible. Remember that it is for personal needs and you might not need an amount more than what you had expected while considering the option of opting for a loan.

Don’t forget that the higher the amount, higher will be the interest you’ll have to pay on a regular basis. So, make sure that you analyze the accurate amount required for your purposes and opt for a loan accordingly.

3. Do you think that you will be able to pay the amount of loan in the stipulated time?

With the thought of considering a loan, be sure that you will be in a position to make timely payments and the same will not turn out to be a difficult task for you in the future. Remember that it will not be appreciated if you’re opting for a loan and miss out on repayments. In many cases, it will have a negative impact on your credit rating, and so you need to be careful with the process to be applied in this case.

4. Is there an alternative?

In some cases, it is possible that you might have other alternatives that might be more rewarding and will not be a burden on your shoulders. If that is possible, you should consider it and try to opt for the alternative that is least risky and highly rewarding. With loans, there is always a burden to repay the same. If you have an alternative where you do not have to make the payments, or there is no need for making timely repayments, you should consider the option on a serious note.

The Mortgage Broker

The Mortgage Broker
The Mortgage Broker – Canadian Mortgage Broker – Mortgage Broker Canada

Make save and preserve more of your money with The Mortgage Broker. Home of the “Best Rate Around”. The independent mortgage broker in Canada is usually allies with a national brokerage to get better and lower rates by volume. Join your local mortgage broker to get the best rates. MONEY often refers Canadian financial consumers to licensed and reputable mortgage brokers and not to big banks directly in order to save you more and get better information, benefits and privileges. Learn more for a direct referral for your mortgage and real estate needs with professionals that know and understand that price and service rule the day. Call us toll free 1-800-789-1011 x101 to know more and get more value for service.

Should you consider getting a debt consolidation loan?

If you are like many other people, and have a mortgage as well as other loans that have been necessary to you for various purposes, keeping up with your payments can often become challenging and even frustrating. Sometimes, it is easy to overlook an account, and deal with unwanted phone calls from collectors or debt notices that are only bringing you stress. If you have decided to not let your debt control your life anymore, one great solution you have the possibility to opt for is to consolidate debt. Debt consolidation debts have increased in popularity, and cone you discover the benefits this option provides, you will understand why. Here’s why you should give this possibility more of your thought:

Single payment

The main thing that makes debt paying so frustrating often is that need to keep track of various accounts. Managing expenses, when you have many bills to pay on a monthly basis can smoothies get confusing, and you can frequently leave behind important payments, which will only bring you extra charges and issues with lenders. By consolidating all your debts into a single account, you will need to handle only one single payment at the end of each month, which will naturally make things far easier for you. With only a single source to think off, you will be able to focus on paying your debt quicker.

Lower your interest rate

Depending on the company you resort to, lowering your interest rate is also possible. It’s a known fact that debt consolidation offers the possibility to save money on interest. You might be having multiple credit cards at the moment, which might be maxed out, and credit cards usually have extremely expensive interest rates. By relying on a debt consolidation company, and cumulating all of your debts into one single account, the chances are that you will be offered a cheaper interest rate, and saving some money is certainly a plus that you cannot overlook.

Less stress

Last but not least, one other thing that makes this possibility so appealing is the stress reduction that comes with it. Because you probably need to keep track of numerous debt accounts at the moment, you must be constantly worrying about staying on top and tracking all your expenses. Debt is known to be a significant stress factor, and anything that can help you in this department is worth your attention. With debt consolidation, you can lower your stress level significantly, and focus on more important matters in life.

Debt consolidation can be a great solution for you, considering the numerous benefits this option actually brings. By accessing this type of loan, a lot of stress can be taken off your shoulders. However, in order for you to actually be able to acquire al of these advantages, it’s imperative to resort to the right debt consolidation company, and that implies making a thoroughly informed decision. After researching the topic in an extensive manner and finding out what your options are, choose the best offer for your particular needs.

Ed Rempel Org

What is The Cash Flow Dam?

What Is The Cash Dam and How Does It Work?

 The Cash Dam (sometimes referred to as a “cash flow dam”) is a simple but powerful concept, and it’s an especially attractive option for those who are familiar with the Smith Manoeuvre or other tax minimization strategies. Cash Dam can help you with tax optimization if you have a mortgage and own either a small business or a rental property.

What is cash damming?

 The Cash Dam allows the owner of a small business or rental property to more quickly pay down their non-deductible mortgage on their home. It’s a variation on the Smith Manoeuvre, but without additional investing. The Cash Dam is essentially an expedient way to change bad debt into good debt.

For someone who’s using the Cash Dam, what it involves is using a line of credit to pay for business expenses. Then, while using the increased business cash flow, you pay down a non-deductible mortgage or loan. This, in turn, produces an increasing tax-deductible business loan, while paying down a non-deductible mortgage or loan. Be advised that the Cash Dam as described above will only work for those who own a non-incorporated personal or partnership-based small business or a rental property.


 If you own a small non-incorporated business that has $2,000 in expenses each month and you also have a readvanceable mortgage, then the $2,000 per month expense would be paid by the home equity line of credit (HELOC). You then use the additional $2,000 you have in your business expense account to make a payment on your non-deductible mortgage. Interest paid on money that’s borrowed for business expenses is tax-deductible; by using the Cash Dam, you’ll be left with a tax-deductible business loan and a non-deductible mortgage that’s been quickly paid down.

One of the keys to the Cash Dam, however, is capitalizing the interest on the business line of credit. That way, you avoid using any of your own cash flow and you keep the business line of credit tax-deductible.

How does the Cash Dam differ from the Smith Manoeuvre?

The Cash Dam relies on using a tax-deductible business loan to allow you to pay down a non-deductible debt, while the Smith Manoeuvre allows you to buy investments. Investing from your credit line is why the Smith Manoeuvre has much higher risk and return than the Cash Dam.

Potential applications

 Say that you’re a rental investor, instead of using your own cash flow to pay for rental-related expenses, you can use the Cash Dam and a line of credit. In this instance, using the Cash Dam would help you pay for your personal mortgage and help you satisfy your tax obligations as well.

And if you are a small business owner, the Cash Dam can be extremely advantageous. The strategy gives you a way to quickly pay down your non-deductible mortgage and convert that debt into a tax-deductible business loan.

What are the different type of loans?

At some point in time, everyone experiences financial difficulties and this is where loans can help them. In fact, loans are needed every now and then if you belong to certain financial class who cannot spend considerable amount of money at once.

Getting a loan has become easier nowadays. But there are some factors to take into account before settling for a loan. Since there different kinds, it is important to understand them to evaluate which one best fits your financial needs and objectives. This article will guide you over different kinds of loans:


  • Installment loans


This is a pretty popular loan which can be paid back in monthly payments covering the interest and principal. Installment loans are taken by homeowners for their personal needs or even by business owners who want to meet their business objectives. Full amount is received when the contract is signed and interest is calculated from that date to the final day. Repayment must be made before the final date or you may have to face additional penalties.


  • Balloon loans


These names are commonly written under another name but it can be figured out by the fact that when the contract is signed, you receive the full amount but only interest is paid off during the life of loan. The balloon payment of principal is supposed to pay on the final day. Balloon loans are ideal for businesses who have to wait till a particular date before receiving payment from a clients for its services and products.


  • Secured and unsecured loans


Loans can come in two forms, secured and unsecured. If the lender has trust in you and believes that you will be able to repay on time then he may grant an unsecured loan. No collateral is pledged hereby as a secondary form of payment. Secured loans requires some kind of collateral but usually has a lower interest rate as compared to unsecured ones.


  • Interim loans


Bankers hereby are more concerned with who will be the payer of the loan and how much reliable the commitment is. These are used to make repeated payments to the contractors who are building new facilities when a mortgage on building is used to pay off the interim loan.


  • Open ended and close ended loans


When it comes to open-ended loans, there is a fixed limit line of credit which can be borrowed again once it has been repaid. Credit cards are one type. Close ended loans are loans that cannot be borrowed again like car loans and student loans.


These were few types. There are a number of others like inventory loans, equipment loans, personal loans, guaranteed loans and commercial loans and also you can compare secured loan rates online at What the matter of concern here is that one must choose the loans that is supposed to meet their financial objective not only in short term but in the long run as well.