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Construction Mortgages 101

You have a clear image in your head of the ideal dream home, and so far no existing house on the market seems to cut it.

You don’t want to compromise on your dreams, not when you don’t have to. If this sounds like you, you’re probably already looking into applying for a construction mortgage. But what is it exactly and how do you apply?

What is a Construction Mortgage?

A construction mortgage is similar to a traditional mortgage, except that it’s a loan to finance the construction of a brand new house on an empty lot or a lot where the existing structure is scheduled for demolition.

Constructions loans differ depending on who is building your house: a builder who sold you the land, or a private construction company you hired separately from the sale of the land.

How Do I apply for a Construction Mortgage?

Like home mortgages, lenders will still have to consider your financial wealth. They still expect a down payment (which will generally be higher than a regular home mortgage), and your credit will be assessed.

You will also need to provide:

  • A copy of the land contract or title
  • Site plans that show the dimensions and other important specs of the property
  • A building contract between you and the reputable builder
  • Detailed building plans

Why Building from Scratch May be Right for You

Anyone who’s ever lived in a home built in the last century may understand the frustration and embarrassment of not having enough electrical outlets, storage space or open concept areas. Sometimes gutting a building and remodelling the entire interior does the trick. But there are obvious complications and risks involved. If you want a modern home that can accommodate your 21st-century needs (e.g. built-in USB plugs and energy efficient everything), then it may be worth building from scratch.

Check out Oppono’s Lending Construction Mortgage Plans or contact us to get started on your construction loan today.

 

 

Sources:

 

http://www.moneycrashers.com/new-home-construction-loan/

http://homemortgageontario.ca/mortgage-possibilities/construction-loans/

 

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Commercial Mortgages: What’s Involved?

Thinking About Buying Commercial Property?

If you’re considering buying an investment property or taking your growing business out of your basement or spare bedroom and into a bright open workspace, then you might have already started thinking about applying for a commercial mortgage. While the process for applying for a residential mortgage is similar, there are a few things you should know before getting started.

Who Applies for the Mortgage?

For a house or condo, the mortgage applicant is usually the person or people who plan to live in it. However, in a commercial space, the application will be under your business name. Because of this, attaining a credit score becomes trickier, which will increase the risk and therefore lead to higher rates.

It’s All About the Business

Be prepared to present your business in the best light. Your mortgage lender will want to know everything about your business, especially its financial health. Know your numbers and have a sound business plan.

Make Sure You Know What Kind of Commercial Property You’re Applying For

Depending on the purpose and function of the building, your mortgage application will slightly change. For instance, you must specify if the property is an apartment building, commercial building or a mixed residential and commercial property. The more information you have about the property itself, the more fairly it can be assessed.

Understand the Financial Commitment

If you’re thinking about becoming the owner of a commercial property, chances are you’re already saving your dollars and cents. No matter what kind of commercial property, a higher down payment is expected—up to 50%—and your interest rates will be higher than a traditional residential mortgage.

Interested in Learning More about Commercial Mortgages?

Are you excited to look for commercial property and you want to make sure a commercial mortgage is feasible for your business? Click here to explore Oppono’s Lending Commercial Mortgage Plans or call 905-886-5352 to speak to one of our team members directly.

 

 

 

 

 

Source:

http://www.rbcroyalbank.com/business/financing/commercial-mortgages.html

http://www.ratehub.ca/commercial-mortgages

https://www.remic.ca/before-brokering-a-commercial-mortgage-transaction-read-this/

 

 

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Changes to the Mortgage Market

Recently, the New Department of Finance (DoF) formulated new rules that will affect consumers everywhere. Here are the changes that were made:

  • The qualification rate will apply to all insured mortgages and this will be effective October 17th. This means that mortgages will require that you qualify at a higher rate.
  • Regulators are also banning many different mortgages from being insured, effective November 30th.

Now, Robert McLister shares a few predictions that will happen after these drastic changes come in effect:

  1. Housing prices will fall, because first-time buyers will no longer be able to qualify for the mortgage they want.
    • Lenders are saying that by forcing insured borrowers to prove that they can afford a payment at the 4.64% posted rate, 15-20% of these buyers will be removed from the market.
  2. Banks will also have to qualify conventional borrowers at the 4.64% rate.
  3. The market share for near-prime lenders will rise.
  4. Banks will begin taking the opportunity to higher their rates as well.
  5. Mortgage availability will drop in places like Toronto and Vancouver, as the rates will rise.

For more insights from Robert McLister, click here.

Oppono’s Solution

At Oppono, we are focused on providing you with additional solutions to better serve your clients’ lending needs. We have a common sense approach to lending and have solutions designed to meet your needs. Check out our most recent mortgage specials, as we have decided to offer you a Broker Appreciation rate drop!

Contact us for more information about our services today.

Sources:

Qualifying Rate

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At one time, the internet appeared to offer all organisations a simple proposition: email connectivity and a clickable presence in the form of a website. Today, web presence has rapidly evolved with interactive content and the ability to deliver transactional experiences – or e-commerce. Migrating services online helps business reduce costs, while customers benefit from the convenience and autonomy of self-service.

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