Category: Private mortgage

Second mortgage: Everything you need to know about this type of loan and how to get one

If you’re a homeowner who needs financing, a second mortgage (or second charge mortgage) from a private lender may be the most optimal solution for you.

This alternative to a home equity line of credit is perfect for all those who need cash urgently—be it for an unforeseen expense, major work, debt consolidation, medical bills or a project start-up.

Second mortgage: What is it and who’s eligible?

As suggested by its name, a second mortgage is additional financing that’s taken out from a second lender and guaranteed by real estate that already has a mortgage on it.

There must be a significant amount of equity accumulated on that property. This net value is the difference between the market value of the building and the lot, and the balance remaining to be paid on the first mortgage. To protect lenders—and buyers too—the combined total balance of the first and second mortgages cannot be more than 75% of the property’s market value.

If your residence is worth $500,000 and the capital to be paid back on the initial financing is $200,000, then you could get a second mortgage for $175,000. You would then have a total amount of financing of $375,000 (75%) and a net value on the property of $125,000 (25%).

Unlike financial institutions, which require a credit investigation and have strict criteria on the borrower’s income, private lenders like Victoria Financial give more importance to the transaction’s intrinsic value. A second mortgage may be highly useful to entrepreneurs, self-employed people or others not entirely meeting the criteria of conventional financial institutions.

Poor credit file: Is it still possible to get a second mortgage?

Yes. It is possible for a borrower whose credit file isn’t spotless to get a second mortgage because a private lender’s primary consideration is the net value of the property. A person with a credit rating under 600 who’s looking for a second mortgage may find it very difficult to have their case heard by the banks, but a private lender may be more welcoming.

Obviously, even if a private lender doesn’t have conditions as stringent as the large banks, they must still make sure the borrower is solvent. The main difference is that the private lender has the capacity and the flexibility to adapt to borrowers with a more atypical profile or facing a situation that doesn’t match the service offering of major financial institutions.

What are the major criteria to take out a second mortgage?

With Victoria Financial, borrowers must meet these three major criteria:

Their property must be a single-family home, a condo or a commercial or income building.
The property must be located in a serviced urban area.
The amount of the current mortgage and the second mortgage together must be equal to or less than 75% of the value of the property.

What are the terms and interest rates of a second mortgage?

By offering easier-to-access, flexible financing, the second mortgage lender takes on more risk. For instance, in the event of a payment default, the lender of the first mortgage will be repaid first when the asset is repossessed. For that reason, the borrower should expect to pay a higher interest rate on this type of financing.

However, the second mortgage only requires payment of the interest during the loan period. It’s only at term (generally 1 to 2 years), that the capital must be reimbursed.

So, this can be a valuable financial tool for those expecting a large sum of money in the medium term but who need liquidity now.

Overview of the advantages of a second mortgage

Gives fast access to significant liquidity
Has less strict eligibility criteria (e.g. allows for a poor credit file)
Determining factor for granting the loan is the property’s net value
Only the interest must be paid until the loan comes to term

Newcomers to Canada: How to get a mortgage and invest in real estate

If you settled in Canada recently and are having difficulty getting financing from large banks, then you might want to look at private lenders for an effective solution.

It’s clear that immigrating is difficult and may require many sacrifices. And it’s frustrating for a newly arrived Canadian who has the financial means to become a property owner or who wants to invest in real estate to have to start back at square one and wait several years before being eligible for financing.

A private mortgage overcomes this obstacle and is simpler, faster and more flexible.

How to get a mortgage without a credit file in Canada

New Canadians who want to own property or launch into real estate investment quickly find out that it may be difficult, or even impossible, to get a mortgage loan from a conventional financial institution. The Canadian credit agencies, Equifax and Trans-Union, which are responsible for collecting credit information, do not consider data from other countries. And since the large banks generally demand a credit file with a history of several years, new Canadians are refused a mortgage, even if they are prepared to make a substantial down payment.

And people coming back to Canada after several years out of the country can also face the same problem.

Thankfully, there is a solution available to people in these situations who want to invest in real estate without having to wait years to rebuild a new credit file here. Since private lenders, like Victoria Financial, are not burdened by the heavy administrative requirements of the large banks, they can work with people who do not entirely meet the typical investor profile.

Private mortgage: A simple, fast and flexible solution for new Canadians

With a private lender, each loan or mortgage is judged on its real value. When you submit a request to a private lender, it’s not a computer that will decide whether to accept it and what the terms will be, as is often the case with the major banks. With a private lender, you deal with a real person.

Since private lenders have more flexible financing policies, they enter into a direct and tangible business relationship with the borrower. This is a big difference from institutional lenders, which require a long credit history as well as an impressive amount of forms, proofs and paperwork.

How do private lenders offer an effective solution to new Canadians and entrepreneurs?

For a new Canadian whose assets are still partly in their country of origin, the big banks’ requirements become a huge puzzle. Even if the person has a down payment of 25%, they must still make sure the amount is in Canada before even beginning the loan request. However, a private lender can adapt to the entrepreneur’s situation. This is where the human side of private banking makes a difference.

The same goes for proof of income. We know that many newly arrived Canadians are entrepreneurs. Unlike salaried employees with stable revenues, these businesspeople have a completely different financial reality. Once again, the private lender can demonstrate good judgement and assess the borrower’s actual solvency, even when a portion of their assets are outside the country.

In short, financial institutions like RBC, NBC, CIBC, BMO and Desjardins, generally seek to serve a typical clientele. These corporations simply don’t have the ability (or the willingness) to adapt to the needs of more niche clients, like new Canadians and entrepreneurs, who want to invest in real estate.

What are the criteria for a new Canadian to qualify for mortgage financing?

To qualify for financing from Victoria Financial, it’s not essential to have a credit file or proof of stable revenue or to fill out tons of paperwork. Naturally, there are some administrative conditions to meet, but here are the three criteria that really matter:

The property is a single-family home, a condo, a commercial or income building, or a lot.

The property is located in a serviced urban area.

You have a down payment of at least 25%. In other words, the private mortgage can cover up to 75% of the property value at the time of purchase.

hypothque pour nouvel arrivant

How to get a mortgage for your commercial building

how-to-get-a-mortgage-for-commercial-building

Key stages of getting a commercial building mortgage

Because it isn’t always straightforward for small businesses to obtain mortgage financing, private lenders offer several solutions that can help finance their purchase of a commercial building.

An SME may prefer to own its work premises to avoid being subject to another owner, burdensome lease conditions or the possibility of the lease not being renewed. Also, by owning its own building, the business will own all the leasehold improvements it invests in. And let’s face it, being a master of your own destiny is one of the main incentives for becoming an entrepreneur! However, unless the SME has access to significant liquidity, an entrepreneur who wants to set up a commercial building will have to obtain mortgage financing.

Commercial mortgage loans differ greatly from those offered to individuals for a residential property. Businesses wanting to own and occupy a building may face several obstacles when applying for a conventional loan from a large bank or credit union.

The disadvantages of getting a commercial mortgage from a conventional bank

Harder to access and less advantageous than a residential mortgage

Quebec’s major banks and Desjardins are large organizations that hold considerable power. In real terms, this means they often set the rules of the game. Companies must therefore expect to pay higher interest rates than residential loans and accept loan terms that are constrictive and sometimes even harmful to their growth. For instance, the renewal of a commercial mortgage loan may be conditional upon the business submitting audited financial statements and obtaining positive financial results.

Financial institutions often turn their backs on whole industries and young SMEs

When large financial institutions decide it’s beneficial to avoid certain industries, there is nothing that forces them to do business with companies from those industries. For that reason, entrepreneurs in some sectors, particularly cannabis cultivation and foodservice, face a lot of refusals from banks when trying to get financing for a building.

Very young SMEs and start-ups also often find that traditional lenders are not interested in them because their revenue history is too recent or because of insufficient profitability.

Banks show little flexibility about businesses’ needs and develop restrictive criteria

Things get even more complicated when, for tax or other purposes, the company’s operational division is separate from the one owning the commercial building (company and main brand on the one hand and a Quebec incorporated company on the other).

In short, major financial institutions have the upper hand, and there isn’t enough competition between them to incite them to create an appropriate offering for all businesses. They are even less motivated to offer services that are adapted to the specifics of each entrepreneurial project and its fiscal structure.

The benefits of commercial mortgage financing from a private lender

Because private mortgage lenders are not burdened by heavy bureaucracy and face greater competition, they are more flexible and more willing to work with the entrepreneurs cast aside by the big banks.

What follows are the main advantages of getting private mortgage financing to buy a commercial property.

Solvency requirements are less strict with a private lender

It can happen that your company is going to get a no on mortgage financing before you even set foot in the banking adviser’s office. And in fact, that advisor often has little control over whether or not your request will be accepted. If, for some reason, your application doesn’t match the financial institution’s computerized analysis grid, the likelihood that an employee at your branch can do anything about it is very slim.

When private lenders receive a request for a loan to purchase a commercial building, they look at the real value of the building that will be mortgaged. Yes, solvency is still a significant criterion, but this type of financing considers a multitude of factors, which are often more relevant and tangible than those of the big banks.

Unlike traditional lenders, a private mortgage lender will take time to carefully and thoughtfully analyze all the risk factors in a project to estimate its real potential for success.

A lender-borrower relationship based on concrete factors

Like you, the private lender is an entrepreneur and an investor. The private lender’s mission is mainly to recognize projects that have potential so they can contribute financially to them.

Like you, the private lender is a risk-taker. They’re not there just to do data entry, fill out forms and demand endless documents. In a way, the relationship between a private lender and a borrower is akin to one of the business partners.

Just like you, the private lender knows time is money. It has nothing to gain in making you wait as the larger banks will often do. The private lender’s analysis is comprehensive, efficient and diligent.

Flexible terms and conditions for a win-win mortgage solution

Let’s face it: the financial statements of a major bank or Desjardins won’t be impacted if your entrepreneurial project fails. But the private lender, on the other hand, only does business with a limited number of borrowers, so it has every interest in your company achieving its goals by purchasing a commercial building.

This is why getting mortgage financing from a private investor can offer terms for the payment of the interest and the repayment of capital that are adapted to your company’s needs and situation.

Takeaways

Despite their many shortcomings, institutional lenders can still meet the needs of some companies. But if your business falls outside the box, or if you’re looking for commercial mortgage financing custom-designed and based on tangible aspects, then a private lender will generally offer more interesting solutions.

commercial mortgage

Stopping mortgage payment. What are the consequences?

What happens if I stop making mortgage payments to my bank?

Unfortunately, the largest part of a household budget is usually the monthly property fees (mainly repaying capital and paying the interest on the mortgage). And these usually have the least flexible terms. A late payment on an electricity or cellphone bill may be manageable, but not being able to pay the mortgage can have serious financial consequences and cause enormous personal stress.

First, let’s look at what happens if you’re a little late (further below, we’ll talk about what happens if non-payments stack up). Then, we’ll look at how a second mortgage, from a private lender, can help save the day by saving your property!

Is skipping a mortgage payment serious?

As a general rule, missing one monthly mortgage payment is not the end of the world. And remember that panic can lead to bad financial decisions. If you anticipate not being able to make a mortgage payment next month, don’t worry that bailiffs will show up at your door in two weeks to seize your home and expropriate you on the spot.

Most major Canadian financial institutions entitle borrowers to miss at least one monthly payment per year. So it’s best to get ahead of the problem and contact your mortgage lender as soon as possible to find out what options are available to you under the terms of your loan. If your financial worries are very temporary, you’ll face a few consequences, but nothing to lose sleep over.

What’s the impact on my credit file of missing a mortgage payment?

If you don’t inform your mortgage lender of the situation, an advisor will contact you in the days after the payment due date. The worse thing to do at this stage is to stick your head in the sand and not take the calls. Bank and credit union policies vary, but in general, a payment delay of 31 to 59 days will lead to a 2 rating. (Note that a rating of 1 means everything is in order). If the non-payment goes on 60 to 89 days, a rating of 3 will be recorded in your file. As soon as the rating on any type of account changes from 1, your overall credit rating will go down. Accumulating bad ratings can quickly make it more difficult for you to get financing from the large banks or even access some services.

What are the financial outcomes of skipping a mortgage payment?

Even if your creditor allows you to skip a payment without serious consequences, it’s still not advisable because you’ll ultimately end up paying more interest. By missing a payment, you not only lose an opportunity to reduce your capital, but the unpaid interest will now accrue interest too.

If the situation recurs a few times during your loan period, these interest fees could add up significantly and lengthen your repayment period. Plus, most financial institutions charge $50 to $350 per payment returned for insufficient funds (i.e., “NSF”). These fees may be higher if your lender serves a higher-risk clientele. This includes, for instance, alternative or sub-prime mortgage lenders (also known as B lenders) and private lenders.

What happens if I totally stop paying my mortgage?

If you don’t make your mortgage payments for several months, your bank or credit union will first send you a “Préavis d’exercice d’un droit hypothécaire” / “Notice of exercise of a right of mortgage.” It advises you of your failure to meet your obligations and informs you of the actions the creditor plans to take if the situation is not resolved. You are given 60 days to take action and correct the non-payments mentioned in the notice. At this stage, your options are limited: you can quickly resume making your regular payments or give the property up to the lender for resale.

But be careful: The sale of your home under judicial order by the creditor does not necessarily mean you’ll be released from the debt. If the home sells for less than your mortgage balance, the difference will become a debt to you. This scenario often happens to buyers who purchased their property with a low down payment.

Another option is for the lender to take the mortgaged property in payment. In this case, the bank takes possession of your home as full payment of the debt. In this situation, you will be released from the debt regardless of how much the property sells for. But this is far from ideal when your mortgage debt is much smaller than the value of the home because you then lose all your equity on the property.

In either case, a judge must make a ruling for the mortgage lender to take the property in payment or to sell it under judicial order. It can take a few weeks to a few months to obtain a ruling, depending on the courthouse where the case is handled.

What solutions are available if I can’t pay my mortgage?

When you foresee being unable to make mortgage payments for several months, selling the property is an emergency exit to consider before things get out of hand. In a seller’s market, resigning yourself to renting temporarily may be the option to take.

But, leaving a house and tackling the rental market is no picnic. Moving not only costs a significant amount of money, it can also impact our self-identity.

A private lender can give you a real leg up if you want to keep your home during a financially difficult period. By getting a second mortgage from a private lender, you’ll be able to get your head above water and catch your breath by securing the cash you need to resolve the situation with your first mortgage creditor.

Because Victoria Financial only requires payment of the interest every month, you’ll have time to get back on your feet without being overburdened by your fixed expenditures. You only have to repay the capital at the end of the loan period. You can even decide to pay off the interest in advance for the whole period, which would take additional monthly payments off your hands.

At Victoria Financial, our personal service makes it possible to get financing that sees beyond your financially tight period. Here are the major criteria to qualify for a second mortgage:

The property is a single-family home, a condo, a commercial or income building, or a lot.
The property is located in a serviced urban area.
The financing amount is 75% or less of the property value.

Private mortgages – an ideal solution for the self-employed

Self-employment has so many advantages, like no boss looking over your shoulder and flexible work hours. But being self-employed can also be a problem, especially when it comes to applying for a mortgage.

Fortunately, private mortgages are there to meet the needs of the self-employed.

It’s not always easy to get a mortgage when you’re self‑employed

Unlike salaried workers, the self-employed often have difficulty obtaining mortgage financing.

This is mainly due to their annual income being more variable from year to year and less predictable than that of employees. In the eyes of traditional financial institutions, this inevitably represents a risk, and one they are not always prepared to take.

Mortgages for the self-employed: the rules are now stricter

Recently, the Canada Mortgage and Housing Corporation (CMHC) tightened its mortgage financing rules for the self-employed.

Since these changes, any self-employed person applying for a mortgage must now meet a minimum income threshold for the previous 2 years when their down payment is less than 20%.

The self-employed worker must also prove that they have been carrying out their activities/ work in the same field for at least 2 years, which obviously excludes a young entrepreneur who has just started a business, even if they are very successful.

In addition, financial institutions ask the self-employed worker to provide:

financial statements for their business
information regarding their GST and QST accounts and proof of full payment
proof that they have paid their federal and provincial taxes and are up to date
contracts attesting to projected revenues for the coming years

And that’s not all: financial institutions also require the self-employed to have a credit score of 620 or higher.

In such a context, how can a self-employed person ever hope to obtain a mortgage loan? This is where private mortgages come in.

The private mortgage for the self-employed

Private mortgage lenders offer a financing product called the private mortgage.

This financing solution gives the self-employed the opportunity to take out a first mortgage loan for up to 75% of the property’s market value.

Private lenders have the advantage of being less strict than banks, especially when it comes to credit rating. They can also be more flexible with respect to proof of income, sometimes not even requiring any income verification.

For the self-employed worker, a private mortgage loan is ideal when banks refuse their mortgage application. A private mortgage is also a great option when their employment income is considered insufficient by traditional banks.

Some private lenders even offer an online loan application form that only takes a few minutes to complete.

Quick and flexible, private mortgages allow the self-employed to take advantage of a temporary mortgage for 12 to 24 months, i.e. the time it takes to (re)build their financial health and transit to a traditional financial institution.

Private mortgages and the self-employed – a winning duo!

It’s not always easy to be self-employed, especially when it’s time to apply for a mortgage with a traditional financial institution.

If you are self-employed and plan to buy a house, we invite you to contact a private lender. They can give you the flexibility you need and help you achieve your real estate investment goals.

Why choose a private mortgage loan to acquire a property

Even though mortgage rates are at historic lows, accessing traditional mortgage loans with banks remains difficult for many borrowers. People are therefore looking for new financing options in order to acquire one or more properties. Whether it is for the purchase of a primary residence or for a short- or medium-term investment, taking out a mortgage with a private lender is becoming an attractive option for many.

1. Who should use a private loan to acquire a property?

If you are in no rush and have a good job, good income, great credit and enough borrowing capacity, then a private mortgage is not for you. You should look at traditional banks for a lower cost loan.

However, there are dozens of situations where private mortgage financing for home ownership is a good option. Here are a few:

you are self-employed but have been in business for less than two years;
you have to conclude a real estate transaction on short notice and cannot wait weeks for an answer from the bank;
you have recently immigrated to Canada and you have a 25% down payment but no credit history;
you are self-employed but your declared income in the past 2 years is too low to qualify for bank financing.

2. Why choose a private loan to acquire a property?

Financing a property with a private mortgage should always be considered a temporary solution as you move towards refinancing with a traditional bank. The average loan term is 6 to 36 months.

People opt for this solution for the following reasons:

It’s much faster than a conventional bank. It can take several days for a conventional mortgage loan application to be approved. With us you can make an application in less than five minutes using our secure online form and get a same-day response.
The approval process is so simple. No more endless paperwork and having to meet certain debt ratio criteria to qualify. The approval of our private loans is based primarily on the net capital available on the property.
You will have access to flexible payment terms. Your ability to repay is essential to us. So that is why we offer payment terms that allow you to lower your monthly payments or even prepay the full interest on the loan.

3. What does it take to qualify?

a. The down payment

In order to acquire a property with a private mortgage, you must first have a down payment of at least 25% of the purchase price. For example, if you are buying a property for $200,000, the down payment required is $50,000. If you do not have a down payment but instead have other real estate assets, we can look at the possibility of using the available equity in these other properties to replace or reduce the required down payment. Our mortgage calculator can help you determine the maximum amount available to finance on your property.

b. The location of the property

In order to obtain approval for private mortgage financing, the property you wish to acquire must be located in an urban area of more than 25,000 inhabitants. The regions we mainly serve are Greater Montreal, Quebec, Sherbrooke and Gatineau. If the property is not located in an urban area, we can still evaluate your application for financing, but with a lower loan-to-value ratio.

How can I apply for a mortgage loan?

Apply online via our website or call us at 1 (877) 220-7738, extension 1.

Is Refinancing A Private Mortgage With Another Private Lender Worth It? – Follow up

Our article Is refinancing a private mortgage loan with another private lender worth it? Aroused much interest. Several clients have contacted us claiming they had been solicited by other companies in order to refinance their private mortgage loan currently with Victoria Financial Inc. Following the discussions we had with these customers, we thought it was important to write a continuation of the article.

The cocktail of fees often between $ 7,000.00 to $ 15,000.00 is not the only factor to consider when considering a change of private lender. Here are other things to think about.

Does the private lender presented to me have a good reputation?

A good way to check is to do a short Google search with the name of the private lender, and then see if he has a good rating. In addition, testimonials available online on Google business, Facebook or LinkedIn can be viewed to find out the opinion of other customers.

Since when are they in business, and who are the administrators? You can get this information for free on the Registraire des entreprises.

Does the new lender offer the option to renew the loan when it is due?

It is important that you do not hit a wall at the end of your new private mortgage loan. You must therefore make sure that the deed of hypothec you are about to sign contains a clause regarding the renewal of the loan.

In conclusion, if the private lender does not offer a renewal, you will need to make sure that you have the funds available to repay the full amount when the loan expires.

The switch can be very expensive; here is a true story experienced by one of our customers.

Most recently, the loan of one of our clients was due. Despite the renewal offer he received, he did not contact us to discuss the options available to him.

A mortgage broker solicited him via mail to invite him to change private lenders. The new lender presented offered a lower interest rate, all of which sparked a tantalizing economy.

However, this lender required several fees that proved to be more expensive than those requested for a renewal with us.

Here is a comparison chart of the two options available to this client :

	Current financing with Victoria Financial	Financing offered by the new private lender
Loan amount	$ 60,000.00	$ 80,000.00
Interest rate	15%	12%
Initial lending fees	$ 1,250.00 (renewal)	$ 6,500.00 (initial fees)
Brokerage fees	Not applicable	$ 3,500.00
Notary fees	Not applicable	$ 2,050.00 (mortgage, release and title insurance)
Monthly payments	$ 750.00	$ 800.00
Total cost of interest	$ 9,000.00	$ 9,600.00$
Total cost of the loan	$ 10,250.00	$ 21,650.00
Cost of borrowing percentage	17.08%	27.06%

In summary, the client’s cost of borrowing went sky high at 27.06% and it cost him more than $12.000.00 in transitional fees to earn a residual amount of only $8,000.00$.

CAs you can see, the idea of a lower interest rate was tempting at first sight. However, when the client realized the magnitude of the fees once he was at the notary’s office, he was not at all excited by the idea!

On the other hand, he had already signed an agreement with the new private lender as well as with the broker. He was therefore bound to them without being able to go back. The cancellation of the financing contract would have cost him a cancellation fee representing brokerage fees, processing fees and notary fees totaling $ 12,050.00.

How can you make a more informed choice?

We always recommend that clients contact their original private lender. Unknowingly, customers sometimes have the option of obtaining an additional disbursement or to capitalize part of the interest in order to reduce their monthly payments. These options do not require the intervention of a notary, which helps minimize their costs.

In almost all cases, switching to a private lender is an option to avoid. The related costs are important and too often presented to the client at the last minute at the notary’s office.

If you have any questions regarding your mortgage renewal with Victoria Financial or if you would like to refinance your private mortgage with us, please contact us so that we can enlighten you.

You can fill a contact form via our website or call us at 1 (877) 220-7738, extension 1.

Is Refinancing A Private Mortgage With Another Private Lender Worth It?

Do you have a private mortgage loan with a private lender that expires soon? If so, are you going to try to refinance with a bank, simply renew the loan, or switch private lenders?

Refinancing with a traditional bank is the ideal scenario. However, this option is available to everyone. If you are thinking of switching private lenders, ask yourself why you are moving towards this direction. Is it because you need more funds? Is it rather the monthly payment that you find too high?

In any case, we recommend that you first contact your current lender to see if it is possible to change the terms of your private mortgage to better suit your current situation.

Following your verifications, are you still thinking about refinancing with a new private lender? Here are the important points to consider.

Legal fees – $ 1,500.00 to $ 2,400.00

In the first place, there are the notary fees to prepare the release of the current private mortgage. These fees can vary between $ 600.00 and $ 900.00.
In addition, notary fees will be incurred to prepare the mortgage of the new loan. Costs between $ 1,000.00 and $ 1,500.00 are to be expected.

Appraisal fees – $ 400.00 to $ 500.00

To ensure the marketability of your property, many private lenders do business with licensed appraisers. Appraisal fees will often be charged before your loan is confirmed.

Brokerage fees – $ 3,000.00 and more

Was the new lender introduced to you by a mortgage broker? If so, there is very likely a brokerage fee to consider. In the area of private mortgages, mortgage brokers usually charge a brokerage fee of 3% to 5% of the loan amount.

So, for a refinancing of $ 100,000.00, you can expect a brokerage fee between $ 3,000.00 and $ 5,000.00 and of up to $ 15,000.00 for a $ 300,000.00 private mortgage. And then there’s the charlatans who charge even higher fees than these listed above.

New private lenders initial lending fees – $ 3,000.00 and more

Finally, the new lender will also charge you for initial lending fees. These fees range from 3% to 5% of the loan amount, with a minimum of $ 3,000.00.

Is it worth it? Our recommendations.

In summary, this cocktail of fees must be taken into consideration when changing private lenders. It is not uncommon to see a customer pay between $ 7,000.00 to $ 15,000.00 only to earn a few thousand dollars more. Quite often, the clients have not done their homework and realize their mistake at the notary’s office.

It is therefore important to make calculations to determine which of the options is the most lucrative for you. In most cases, renewing the existing loan is the best option for the client.

If you have any questions regarding your mortgage renewal with Victoria Financial or if you would like to refinance your private mortgage with us, please contact us so that we can enlighten you.

You can fill a contact form via our website or call us at 1 (877) 220-7738, extension 1.

Taxes to pay? A private mortgage loan is the solution!

Did you know that one of the best ways to stay up to date on your tax returns while simultaneously paying the amount you owe the government on time, is to take out a private mortgage loan?

Every year, tax payers have to submit a tax return prior to the due date. Whether tax returns are submitted through a professional or by using the appropriate software, everyone has to follow the same guidelines and submit their returns in due form.

Although it is mandatory to submit tax returns, 10% of tax payers do not submit their annual tax return and then end up owing in back taxes and late fees.

Why is it so important to submit your tax return on time?

The most important reason to submit your tax return on time is to avoid late fees. These penalties are costly and climb rapidly when you owe taxes:

A late-filing penalty of 5% on your balance owing.
1 % of your balance owing for each month that your return is late, for up to a maximum of 12 months.

In addition, if you do not file a return, you will have to pay a failure to report income penalty. This penalty is $25 per day, to a maximum of $2,500.

On top of this, you have to pay interest on the amount you owe the government. This percentage is determined by the Bank of Canada, and changes from year to year. In 2017, the interest rate on debts is 6%.

All the charges mentioned above apply both to businesses and to individuals who did not submit a return. As you can see, debts can climb astronomically if you do not submit a tax return.

What solutions are available to you so that you can abide by government regulations, while avoiding additional charges?

Private mortgage loans

In a situation such as this one, there are numerous benefits to taking out a private mortgage loan, including accessing the capital needed to pay off unpaid taxes.

What is the difference between a loan granted by a bank and one obtained through a private lender? The latter can grant a loan more easily than a bank, as explained in my article, Taking out a second mortgage? Skip the financial institutions!

Another point worth mentioning is that a financial institution will not accept an application if the applicant’s tax returns are not up-to-date. As mentioned in my blog article, a private lender will only require that the amount of the loan be used to repay the amount owing.

Benefits of paying taxes using a private mortgage loan

There are numerous benefits to doing business with Victoria Financial, as a private mortgage loan will allow you to have a clear conscience while avoiding debt. With this loan, you will be able to:

Reduce your total costs.
Not have Revenu Québec and Canada Revenue Agency on your trail.
Pay lower monthly installments.
Be approved for a mortgage loan without a credit check or an income verification.
Receive the requested amount in less than one week.

Now you are familiar with the benefits of choosing a private mortgage loan with Victoria Financial to pay your taxes. Why wait? Contact me so I can help you make your payment and save money at the same time.

Contact me via email at maxime.st-laurent@financierevictoria.com or by phone at 1 (877) 220‑7738, ext. 101. Whether you have taxes arrears or not, we can help you.

60 day notice: 3 ways to avoid losing your property

Receiving a 60 day notice, also known in legal jargon at a notice of exercise of hypothecary right, from a mortgage lender is a stressful situation, given that it can lead to the loss of ones’ property. Nobody wants to lose their home. Most people do not have extensive knowledge in the legal field, and are often times poorly advised by friends or family, mortgage brokers or real-estate brokers.
Here are 3 ways to avoid losing your property after having received a 60 day notice:

1. Correct the defaults noted in the 60 day notice

This is the simplest solution. The notice of exercise of hypothecary right will list the different reasons why you received said notice. If it is due to monetary issues (ex. late payments, property tax payments), you must reimburse the amounts due in order to terminate the notice. You can borrow money from your friends or family or obtain a second mortgage if your property equity allows for it.

2. Reimburse the mortgage debt in full via private mortgage refinancing

Given the fact that your credit is probably damaged, you’ll have to opt for private mortgage refinancing. By working with a private mortgage lender, such as Financière Victoria, you can opt for refinancing of up to 75% of the property’s value. By reimbursing the mortgage lender, the 60 day notice is terminated.

3. Sell your property

This is the solution that the vast majority of debtors don’t want to consider. But unfortunately it is your only solution if you do not have the funds available to fully reimburse the amounts you owe the mortgage lender within the required deadline. The use of a realtor is strongly recommended in order to develop a good strategy for a quick sale.

If you have received a 60 day notice, or if you are presently looking for private mortgage financing, please contact me at maxime.st-laurent@financierevictoria.com or by telephone at 1 (877) 220-7738 Ext. 101.