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12051
BROKERAGE LICENSE ID
12051
Pro Funds Mortgages
Mortgage Brokerage
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3410 South Service Road Suite G5, Burlington, Ontario
BLOG / NEWS Updates
Utilize Private Funds In Your Real Estate Today!
We as the general public have been spoiled by the low bank rates being offered to date. Many investors become so enticed by low interest rates that they do not even consider the option of using private funding when they are declined by the bank, and as result, they turn away from a purchase or refinance that could have generated great profit for them.
First of all, why are more and more people getting declined by the bank? Today the banks have become very difficult to work with. This is because they have imposed extremely strict requirements for approvals and if you do not meet their exact credentials, you are declined and your buying power has been diminished. I am sure many have experienced such frustrations on the new and improved banking protocol, specifically business owners and contract workers who may have difficulty verifying income. Being in the mortgage industry for almost 2 decades now,I have witnessed vast changes in the approval process for both residential and commercial lending.
Just a short time ago it was possible to purchase a residential property, single family up to 4 units, with only 5-10% down. Today you would need a minimum down payment of 20% of your purchase price. You must be able to show that you have the funds to support this purchase and if you cannot verify your income as declared on your tax returns, then there is a very high probability that you will be declined. How many individuals have fallen into this category because of being self-employed? Majority of these individuals are the ones that are seeking alternative investments such as real estate for long term stability because of a lack of post retirement pensions and government support.
Iwant to inform all of you investors that we cannot let the banks criteria stop our real estateendeavours! We have access to private money where these strict rules do not apply. The approval processfor private funding is based on commonsenseapproach. A common sense approach entails analyzing a deal objectively and all-encompassing. A feasibility analysis would be conducted along with an appraisal of the property, and any relevant documentation would be requested on deal specific basis. Although the interest rates are higher, with private funding there is significantly more flexibility with closing times (mortgages can close within a matter of days!), income confirmation, loan to values, and conditions on a mortgage offer. A higher interest rate is far worth the ability to purchase real estate that could produce great future value and profit that otherwise may not even be a possibility.
Since private money can fund quickly, why not use this funding source tonegotiate a better deal for a quick closing, and offset the additional interest rates? I personally am self-employed and I am an avid real estate investor whom uses this technique all the time. I pay the going rates and still have a great success from real estate!
Example of how using private money worked for one of our clients:
Purchased a power of sale vacant property: $550,000
Used private funding to close
Used private funding for a renovation loan
Renovated and leased the vacant space
Appraised the property after the work was completed: New value $1,100,000
Refinanced with the bank
Removed private money: now they have a beautiful property that is cash flowing and their initial investment has been returned.
Please note, first mortgage rates for a private loan average from 7-10% annually, second mortgage rates average from 10-15% annually. We can obtain up to 90% of the value of the property on approved credit. On average this is on higher side, however has been funded. Lender fee and broker fee will also apply.
Private money will fund land, gas stations, vacant properties, distressed properties, construction, and developmentamongst many others. If you are looking to buy a property and are hitting a wall with your funding, contact info@profunds.ca and we can perform an assessment on your deal today!
Almost no annual growth for national HPI
The national HPI has grown at a below-inflation rate of 0.5% over the last 12 months, the smallest gain since November 2009. Moreover, the fact that monthly gains are reported for May and June does not mean that the market recently turned the corner. These two months typically register the strongest growth rates in a year. Indeed, the two latest rises were among the weakest in history for months of May and June. If seasonally adjusted, the national HPI would been down in both months this year. However, the weakness is not regionally broad-based. The national HPI was dragged down by 12-month home price declines in Western Canada metropolitan areas (Vancouver, Calgary, Edmonton and Winnipeg) and a tiny increase in Victoria. In Central Canada and in the East, home price growth ranges from decent to strong (left chart). This is consistent with the state of home resale markets. For example, the Vancouver market turned favorable to buyers at the end of last year, while the Toronto market remained balanced and Montreal’s market has never been this tight since 2005. That being said, a rebound in home sales recently occurred in Canada which was also felt in the largest Western metropolitan areas. This should help limit home-price deflation in these areas.
The Teranet–National Bank Composite National House Price Index increased 0.8% in June, a second gain in a row after an eight-month string without a rise.
Highlights:
On a monthly basis, the index rose in 8 of the 11 markets covered: Winnipeg (0.1%), Quebec City (0.3%), Montreal (0.8%), Toronto (1.3%), Halifax (1.5%), Hamilton (+1.6%), Victoria (+2.1%) and Ottawa-Gatineau (+2.2%). The index was down in Calgary (-0.1%) and Vancouver (-0.3%), and flat in Edmonton.
From June 2018 to June 2019, the Composite index rose 0.5%, the smallest 12-month gain in ten years. The HPI declined in Vancouver (-4.9%), Calgary (-3.8%), Edmonton (-2.6%) and Winnipeg (-0.4%). It was up in Victoria (0.3%), Quebec City (1.5%), Halifax (2.7%), Toronto (2.8%), Hamilton (4.8%), Montreal (5.4%) and Ottawa-Gatineau (6.3%).
Source: National Bank Financial Markets; Marc Pinsonneault
NORTHERN STAR (FOR NOW...)
In contrast to the US, Canadian growth is accelerating sharply going into the second quarter, following a solid gain in domestic demand to start the year.
Fast, and accelerating, population growth, and remarkably strong employment growth are providing a solid underpinning to consumer spending and the housing market.
Positive export data suggest that the ongoing strength in domestic demand will be buttressed by net exports in the second quarter, and possibly beyond.
Canadian inflation is at the Bank of Canadas target, in sharp contrast to the US, where it has moved away from the Feds objective. This gives the BoC room to keep rates on hold if inflation remains on target.
Downside risks remain important and are all linked to US-centric developments, with worries about US trade policy ongoing despite the pause with China.
Recent Canadian developments stand in sharp contrast to events in much of the rest of the world. Whereas US growth is clearly decelerating, Canadian growth is on an upswing, with recent indicators pointing to a very sharp rebound from a somewhat sluggish start to the year. Canadians appear to be, for the time being, largely insulated from the broader malaise facing the global economy as consumer and business confidence has improved sharply in recent quarters, owing to strong sales and job creation. While there are a number of factors suggesting that the growth rebound observed will persist through 2020, there is a risk that a divergence between Canadian and US outcomes may not last.
Source: Scotiabank Economics
