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.

7 Money-Saving Ideas When Building a Home

Building a home is expensive. Stick-built homes are more expensive than modular homes, so an immediate way to save money is to choose modular homes. These homes are built in a factory and assembled on-site.

The homes are cheaper and often safer than a traditional construction.

But potential homeowners don’t want to drain their savings accounts or retirement accounts to build a home.

Money-saving ideas that new homeowners recommend are:

1. Take Bids for the Job

Bids are an essential part of the homebuilding process. The goal is to shop around after getting an estimate to build a home. The same process can be done with modular companies. Make sure that even if you’re required to work with a particular builder, ask if you have the option to make sure that the bid is fair.

Oftentimes, you’ll find that bids vary greatly with some being tens of thousands of dollars less or more than the competition.

2. Vet the Subcontractors and Ask for Recommendations

Construction companies often work with a variety of subcontractors that they offload particular parts of the building process to. For example, a contractor may hire another professional to do your:

  • Electrical
  • Plumbing
  • Flooring

Ask for recommendations and testimonials of the subcontractors that will be working on your home. If a plumbing contractor doesn’t have a good reputation, demand the contractor find the right sewer contractor for the job.

It’s better to get the job done right the first time rather than pay more in the future for repairs and to redo the work.

3. Downsize for a Smaller Footprint

Smaller homes cost less to construct. You can choose to build a 2,000 sqft home, but do you really need all of the space? If you downsize to a 1,500 sqft home, you’ll be saving 25% on your home’s cost which is substantial.

If you’re concerned about the home feeling cramped, open floorplans are best.

These floorplans open up the space, often connecting rooms, and make most homes feel lively in the process. If you’ve never had guests sleep over before, ask yourself if you really need that extra guest room.

4. Ask to Source Your Own Materials

Contractors aren’t in the business of helping you find the best price on materials. You can ask to source your materials. This means sourcing some materials, often:

  • Water heater
  • Cabinets
  • Countertops
  • Flooring

You can often save several hundreds of dollars on the above items by sourcing them yourself. Just make sure that your builder is on the same page as you and allows you to source your materials.

Craigslist, Amazon and even Habitat for Humanity often has items that you can buy for a lot less than other outlets are selling them for.

You’ll also want to keep in mind that your home is one of the largest investments you’ll ever make. In the right market, you can build a home and have instant equity in it. What this means is that you’ll have a home, which may have cost $200,000 to build, that might be worth $240,000 when complete.

This is a great return on your investment especially when the home will continue to appreciate in value in the future.

10 House Buying Tips for the United Kingdom Property Market

Buying a home is usually the largest investment of any family or perhaps you are buying an overseas property for investment purposes. Let’s look at what aspects you need to look at to factitive a great purchase and gain solid investment for your money.

  1. Consider whether you should be buying a house at all. 

There is an attitude in the family should by all means own their own home. Home ownership means stability and pride. However, make sure you can afford the mortgage with your current salary.

      2. Research the Neighbourhood.

When you find you are interested in a particular home, it’s time to play detective. Walk through the neighbourhood, visiting pubs, parks, school yards and homes at different times of day. Check that homes are well-maintained, that cars are kept up and there aren’t any derelicts lining the streets.

  1. Check Out the Area with the Neighbours.

Many neighbours can give you valuable information on the particular home or the neighbourhood. Check with those who are not next door, but some distance away. They are likely to be more honest about the area and won’t be either friends or enemies with the sellers. You will also have the advantage of meeting the people you will be living with.

  1. What Is the Potential for Resale?

It is possible you wish to live in your new home until you die and then leave the property to children. If this is not the case, then you must take measure of the resale value of the property. You may need to put some work in on the house.

If the home has been on the market for quite a while, you had better figure out why, because it will affect your ability to sell the home in the future.

  1. Bump Up Your Credit Scores.

Make very sure that your credit scores are as error-free and up to the demands of your preferred lender. Little mistakes that are easily overlooked can take your out of the running. Check the free websites that can give you the current credit rating.

  1. Arrange with Your Lender a Mortgage in Principle.

You probably won’t be able to arrange a mortgage unless you have a particular property in place. Instead, lenders offer what is called a “mortgage in principle (MIP).” This is very helpful in that it lets you know how much the lender is willing to allow you to borrow, as long as you find a suitable property within a specified time. However, the MIP is not a guarantee.

  1. Look at other finance options such as Bridging Finance to secure the property you want.

Bridging loans are a short-term finance option, typically used by property buyers to ‘bridge’ the gap between the sale of their current home and completion date on the purchase of their next home. You might need that window to sell your current property but have spotted a great buy that you need to move quickly on. This could ease the headache of financing your move but you must tread carefully.

  1. What Is the Actual Cost of Buying the Home?

Owning a home costs more than just the monthly mortgage payment. Remember fees can add up to thousands of pounds. From the Mortgage Arrangement Fee to the cost of removal and new furnishings, the cost of the home will likely be thousands more than the “sticker price.”

  1. Typical Home Buying Time Line for England and Wales.

The time it takes to find your new home and arrange for its purchase will likely be longer than you think. It will take you time to find a property you want. It will be wise to narrow your search to two or three neighbourhoods, but don’t be too certain you must be located in only one particular place.

  1. Put in your offer quickly.

Once you have found your desired home, put in an offer. This lets the seller know how much you are willing to pay, plus any other conditions. Once your final offer has been accepted, you will need to arrange for a survey of the property and your solicitor should research any legal issues.

At the time of the exchange of your money for the deeds and keys, it will take just a few weeks until the sale is complete.

Targeting Millennials as a Real Estate Agent – What to Know

Millennials have become one of the largest group of homebuyers. However, due in part to affordability issues and the reluctance of older generations to upsize or downsize from their current homes and free up inventory, Millennials also lag behind the benchmarks set for homeownership by older generations at the same stage in their lives.

The question facing many real estate agents now is how to successfully market to Millennials and help them achieve their goals.

Fortunately, Millennials are very much like the previous generations in their outlook about homeownership: they regard owning a home as a central part of achieving a lifelong dream and perceive it as an attainable goal. On the other hand, as I mentioned above, there are some obstacles that Millennial buyers face that previous generations have not. There are a few ways that a savvy agent can reach Millennial clients and help them make the best decision for themselves.

As alluded to above, Millennials do not have the same kind of financial wherewithal that clients in previous generations might have enjoyed: they are often burdened with debt from student loans and other financial obligations, and face the prospect of rising costs and stagnating wages. Millennials often buy their first home later in life than, say, members of the Baby Boomer generation and, as a consequence, are looking for houses that are inexpensive and simple to maintain.

In addition, and this cannot be overstated, today’s Millennial home buyer will search for homes online, via computer and smartphone. It is paramount that any real estate agent who wants to connect with the Millennial audience take this fact into consideration when building a marketing plan for his or her properties.

There are a couple important things to keep in mind in relation to this aspect of the Millennial audience:

  • Millennials expect to be able to find the information they want immediately. Info about homes should be clear and easily accessible, whether on a website or social media.
  • They also want to be able to see a lot of high-quality photos of properties online. They want to be able to obtain as much solid information about a property as they can before committing to seeing it in person.

Also, thanks to the influence of home renovation shows on TV and things like Pinterest and the proliferation of home decor magazines, many Millennials have different — some might say higher — expectations than previous generations when it comes to real estate.

  • Millennials want new fixtures and updated bathrooms and kitchens. They want things that are new and they want the appearance of luxury and modernity.

Millennials are also, on the whole, more focused on “experiences” rather than the accumulation of things. This means that they place a greater value on certain aspects of a property:

  • Millennials want open spaces within the house where they can entertain, and they want to be in urban or denser suburban areas where they can connect with others.
  • Millennials generally speaking do not want houses that sit on large lots or are difficult or expensive to maintain.
  • Millennials, in general, are not interested in houses that are in need of extensive renovations; they do not have the disposable income to complete renovations and would rather spend that money on activities and experiences.

Keeping all the above in mind can help real estate agents reach the Millennial audience and connect with them successfully.

The Mortgage Broker

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

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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.

Are You Legally Allowed to Break Your Apartment Lease?

Picture this: You have been enjoying life at your apartment for months, but then you receive a devastating loss of your job or a family member passes, causing you to have to move home and take care of vital life matters. As everybody knows, there are many valid reasons for wanting or needing to break the lease on your apartment, making a difficult situation for everyone involved. In some cases, your landlord may choose not to penalize you for this decision, but in other cases you could have lasting consequences. Because of this, you want to know how to get out of your lease in the most positive way possible.

Are There Penalties Involved?

Sometimes. Leases are considered to be legally binding agreements, which means that if you back out on one, your landlord could potentially take legal action for back rent payments and more. Unfortunately, to the courts, things like job loss and illness do not legally excuse you from breaking your lease. On the other hand, you could also experience a difficult time being able to rent in the future, which is a huge consideration to make. It could leave an adverse mark on your credit report, which future landlords will see and this could lead to the denial of your rental application. 

Best Ways to Break a Lease, if Necessary

It’s always best to carefully review your lease prior to signing, but if you’ve already signed a lease, here are some tips. For your protection, it pays to know the ways in which you may be able to break your lease without too many negative consequences to yourself and your landlord. We can help.

Reading Your Agreement: You should always turn to the rental agreement you originally signed for options before you take other steps. One section could contain information on how to break the lease and may even list penalties for doing so. Look for words like “early release” and “sublet” to return to, as these will be options to consider down the line. You may also legally have to give notice of your intention to vacate in advance, just like you would when leaving a job.

Speaking One-on-One: Having open communication with your landlord is better than letting the issue fester out of control. It helps them look into options well into advance, so always be honest with them.

Subletting: You may be able to find a new renter and agree to it between you and your landlord, helping you move out early and helping them replace the costs. You may be able to choose subletting, which is where somebody will take over your current lease even though the lease would remain under your name. Though you would be responsible, the benefits may still outweigh the negative parts.

Termination Offers: Your landlord may give you termination offers, such as paying a few month’s rent in advance or forfeiting your security deposit. Those these can be disadvantages to you, it could be the better option depending on the circumstances. 

These situations can be difficult, which is why you should always be prepared. Keep your landlord in the loop and consider the options that work best for everybody involved.

Living Affordably – Life in a Repurposed Shipping Container

Many people will decide that their current lifestyle is too costly, and would rather save their money by living far more cheaply. Switching to a repurposed shipping container is easily one of the most cost effective ways to largely reduce your expenses in almost every sector.

Buy container today and bring your bank account to a new level of progression while still enjoying the comforts and durableness of the stability that a repurposed shipping container brings.

Let’s Talk Numbers

Obviously living in a repurposed shipping container is far cheaper than living in a traditional house, but how much does such an implementation actually cost? Some of these original homes can be created for under $30,000.

Seeing as you will indeed be using far less water and electricity in your new home, you can expect to pay far less for utilities. You can forget about paying for mortgages or any related loan-based payments.

Planning is Key

Moving into a repurposed shipping container may indeed be a life changing process, but it is also a massive revolution in your living standards which requires the proper planning and dedication to the foundational phase.

You certainly cannot just improvise as you go along the construction phase, and doing so will lead to much in the way of debilitation and upset. Just because you will be moving into something far simpler than a traditional home or apartment, does not mean that you should treat your living space with any less care and sensitivity.

There are two major components to the planning phase.

Establishing a Budget

Any home, no matter how small, cannot be accomplished without the adequate amount of funds set aside. Although the repurposed shipping container home may indeed be far cheaper and more humble than the standard home, that doesn’t mean that it has to be lackluster.

You need to decide just how much money you are willing to set aside, for both luxuries and practical means. In any case, whatever you decide upon will not take too much from your bank account to achieve.

Planning Space

This ties into your budget, and is obviously constrained by how much you are willing to spend, but you need to decide how much space you will actually need. This means how many bedrooms and bathrooms, living rooms, lounges, etc.

The addition of stories is a very simple matter with repurposed shipping container homes, all that it takes is to stack one container on top of the other which will be linked by stairs. You can also get very creative with such simple and straightforward shapes, and there are plenty of awesome designs that have been hatched due to how easy it is to craft with repurposed shipping containers.

Take your time to settle on exactly what you want to get out of your home, and make sure that your dream can be adequately funded. In any case, you should approach the right companies and professionals who have dedicated their lives to furthering the establishment of repurposed shipping container homes.  

Honest Property Valuation is of Huge Help

You get a property surveyor because you want your property to be properly assessed and checked. Sometimes, it is tempting to just pay the surveyor so you can get the price that you want. To begin with, this is a bribe and it is illegal. Secondly, most professional surveyors who have been around for a long time will not grant your request. Most of all, you will still end up with an inaccurate assessment of the property. The amount might be too high for some potential buyers and they will have a hard time believing the valuation report.

This is why it is important that the property be assessed accurately. The results must be honest. Those who are interested in buying the property will no longer second guess the accuracy of the report. Aside from the potential buyers, you will also be helped a lot personally.

Going through a divorce

When you are going through a divorce, you don’t necessarily intend to sell your property. Your goal is to simply know the value of the property so you can split it with your former partner. One of you could get the property and pay the other half of its value. In this rough time, you no longer have the energy to really think about all the legal aspects. You just need someone to help you out by giving you the accurate worth of the property.

Filing for bankruptcy

If you have done your best to keep your business afloat and it still ended up being bankrupt, it can be very heartbreaking. Hence, you have to sell whatever assets you have left in order to repay your loans. The property where your business used to operate could be the biggest asset. Make the most of it by asking for a property surveyor to check it. The estimated amount will then be known and you can decide what to do with the property. You can sell it to potential buyers so you can finally get out of your current financial problem.

Now that you have fully understood the need for a property surveyor, it is time to hire one. There are a lot of them for you to choose from so you need to screen them well and get the right partner to do the job. There are qualities that make a good surveyor, but always choose honesty before anything else. You want someone who will tell you exactly what your property is worth. The amount should be as close as possible to its actual worth so if you decide to sell the property, you will earn a lot.

Look for the best people to do the job at