Son Of A Broker

Files Of The Broker: Property Tax Arrears & Judicial Sale

chris — Thu, 22 Jul 2010 14:12:50 +0000

The consequences of not paying property taxes are not well appreciated. In my last blog entry I explained the term Judicial Sale and highlighted that this legal process is a great opportunity to acquire undervauled properties in cottage country. More often than not the cause is the non-payment of property taxes.

The other day we received a phone call from a solicitor to help resolve a legal action initiated by a municipality to collect tax arrears. The owner of this very attractive rural property was one week away from being evicted by the sheriff. Specifically, he owed the municipality five years of property taxes plus penalties, interest charges and legal fees.

Burying his head in the sand in ostrich-like fashion he simply ignored the mail, evidenced by a pile of unopened letters. He came dangerously close to loosing his property before we intervened on his behalf with a private mortgage on his otherwise mortgage free property.

This episode illustrates a lot of leniency and patience by municipalities toward property owners before they finally resort to the cumbersome legal process of judicial sale. Keep in mind that properties are an important source of tax revenues necessary to pay for municipal services. When default occurs on an otherwise debt free property, the government turns to the public with the announcement of their intended judicial sale and rewards the highest bidder with conveyance of ownership. The new owner assumes the obligation to pay property taxes and, hopefully, keeps payments up to date.

If you are interested in cottage country properties this may be an opportunity worthwhile exploring. One of our private investors purchased a small island of Georgian Bay in this way.

If your property taxes are currently in arrears and would like to finance them through a private mortgage or you are a private investor who would like to explore these and other opportunities please give me a call to discuss. Arnold Molder 416.461.0204 Dedicated to financial sufficiency.

Mortgage Interest Rates For July 12th

chris — Thu, 15 Jul 2010 16:25:35 +0000

I was out of the city this past Monday camping in Killbear Park far from any internet connection making it impossible to get my Monday Mortgage Minute up. I’ll just briefly post the current rates for anyone who is looking to see how rates have changed since last week.

Chris Molder – Son Of A Broker

2.70% – 1 Year Fixed

3.49% – 3 Year Fixed

4.09% – 5 Year Fixed

3.09% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.70 3 Year Variable

P-.60 5 Year Variable

Prime Rate is currently 2.50%.

Bench Mark Qualifying rate is 5.79% (Used to qualify high ratio mortgages)

NOTE: Rates are subject to change without warning at the lender’s discretion.

Files Of The Broker: What Is A Judicial Sale?

chris — Wed, 14 Jul 2010 18:52:43 +0000

In my last post I wrote about an astute investor who exploited the opportunity of a Judicial Sale when he bought a unique, mixed-use property, for a bargain price of under $100,000. Such opportunities come up frequently but are missed by most people because they don’t know where to look specifically. In addition, the term Judicial Sale is not part of the everyday vocabulary and opportunities are missed.

The term judicial sale is a legal notice informing the public of an intended sale of a property to the highest bidder, in an auction environment by a sheriff. The reason for a judicial sale is most commonly for arrears of property taxes owed to a municipality.

The action of resorting to a Judicial Sale occurs only after a municipality has failed to collect tax arrears from the owner, and all other methods of suasion have also failed. In other words, a Judicial Sale is the final legal act to obtain these arrears through a property sale to the highest bidder.

Such notices appear typically in the newspaper column under legal matters/auctions.

Notices of smaller communities and municipalities, especially in cottage country, offer greater opportunities for investors. The first reason is that due to population numbers, there is a smaller interested audience than in a city. Secondly, it requires special geographic knowledge. Finally, it takes a lot less money to be a successful bidder.

If you are patient and interested in cottage country properties, this may be an opportunity worthwhile exploring. One of our clients, a couple, purchased a property for summer vacations under Judicial Sale on Prince Edward Island, where they grew up.

Granted, the pursuit of Judicial Sales opportunities requires effort, but it can be a rewarding experience.

It is highly unlikely in these situations for a Bank to be your financial partner. More often than not, such situations require private mortgage financing and backing of an experienced mortgage broker.

From the Files Of The Broker: Arnold Molder 416.461.0204

Monday Mortgage Minute – Interest Rates July 5th 2010

chris — Tue, 06 Jul 2010 18:15:36 +0000

All signs are pointing to lower fixed rate mortgages again for the 3rd time this year. Bond yields are low and as a result we are seeing fixed rate mortgage prices dropping just a little bit further this week. The Bank of Canada has also dropped its benchmark qualifying rate for high ratio mortgages by 0.10%.

As a mortgage broker I get paid a steady finders fee from the lender. It doesn’t matter which lender we go to, the fees are similar so there is no incentive to take you to one lender over another. The only incentive I have is to give you honest open advice to make sure that you tell your friends and family about your positive experience. Send me a quick e-mail to get the ball rolling!

2.70% – 1 Year Fixed

3.49% – 3 Year Fixed

4.09% – 5 Year Fixed

3.13% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.65 3 Year Variable

P-.60 5 Year Variable

Prime Rate is currently 2.50%.

Bench Mark Qualifying rate is 5.89% (Used to qualify high ratio mortgages)

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Files Of The Broker: Oddball Property Private Mortgage Financing

chris — Wed, 30 Jun 2010 16:39:56 +0000

What do you get when you try to buy a property that was once a jail, fire hall, dance hall & town hall? A financing conundrum.

This is exactly what one of our clients purchased, where we provided private mortgage financing. The purchase is even more remarkable when you consider that the jail, fire-hall, town-hall and dance hall are joined as one property, on one deed.

The property has an interesting history going back to the early days of Ontario, when towns sprung up around employment opportunities of budding industries. The property is located in a small sawmill town, along a railway line, and developed to serve the needs of the town’s people. Construction of the town-hall was considered for obvious administrative functions with an office on the ground floor, town hall and stage on the floor above to function not only for meetings, but also on weekends for dances, theatre and other festivities.

The fire-hall evolved from the voluntary fire brigade of citizens who were ready to spring into action when needed. But the jail is more intriguing and amusing. Crime was not a big problem but there were plenty of people who liked to have a good time with alcohol. When they became a nuisance they were simply put up for the night in the specifically constructed cell, adjacent to the office on the ground floor. It has three-foot-thick walls of field stones and a solid, heavy wooden door, making escape virtually impossible and muffling any sound such as singing from the intoxicated revelers.

Over the years the building became redundant, not for lack of drunks, but through amalgamation of administrative functions and services with a nearby, larger town.

In time the building deteriorated and was in need of maintenance and upgrading for which there was no money in the budget. In addition the lack of income, via property taxes persuaded the Town to sell via a judicial sale.

Our handy purchaser obtained the entire property, bounded by a park on two sides, for less than $100,000 when it was offered for sale to the highest bidder. He now lives there happily after renovating and restoring the property extensively with ‘sweat money’ and converted the jail into a wine cellar.

Such situations require private mortgage financing not only due to the zoning but also in circumstances of judicial sales. Because we are over 30 years in business as mortgage brokers we have come into contact with many situation that require private mortgage financing. Over the years, we forged long term relationships with private investors who approach lending, besides concerns over security, with a lot of common sense.

This story serves to illustrate our pivotal broker-role in transactions. Furthermore, it shows how borrowers can benefit from our experience and connection with private mortgage investors with whom we have developed, over the years, trusted relationships.

If you are a private investor looking for opportunities to invest, or a borrower needing help with your own unique and challenging circumstances, we invite you to call us with your story.

From the “Files of the broker”

Gifted Down Payment

chris — Mon, 28 Jun 2010 21:45:51 +0000

Mortgages are very dynamic transactions. There are areas of the mortgage approval that don’t warrant any kind of special consideration but if for whatever reason the lender’s guidelines cannot be satisfied one can compromise the successful funding of a mortgage. Proof of down payment is one of those areas.

Generally speaking proof of down payment is an afterthought for most borrowers as most of the attention is given to proof of income and other conditions. From a borrower’s point of view the down payment money is available and they don’t give it a second thought. However there are some very specific rules that the lender is required to adhere to in conjunction with the Anti Money Laundering & Terrorism Act regarding proof of down payment.

Since using laundered cash for a large down payment is probably the easiest way to launder money the Government relies on the lender as a gate keeper of sorts. For down payment money coming from your own sources you are required to show 3 months bank or investment statements showing that the money has always been there or the gradual accumulation of funds. Any large deposits must be documented. If you keep the money in a shoebox under your bed it is not going to meet the lender’s criteria and will not be accepted.

Gifted down payment is acceptable to the lender however a gift can only be made by a directly related family member including, mother, father, brother, sister or grandparents. The lender will not accept gifted down payment from spouses, friends, aunts, uncles, cousins etc…

Seems straight forward but if you aren’t aware of these rules before making an offer to buy and you commit yourself to buying and run into a problem with proof of down payment it can be very stressful and compromise your mortgage.

Chris Molder – Son of A Broker… dedicated to your financial sufficiency and prosperity 416.461.0204

Monday Mortgage Minute- Toronto June 21st

chris — Tue, 22 Jun 2010 01:41:04 +0000

It looks like the fixed mortgage rate market has stabilized after the bank of Canada’s decision to increase the prime rate earlier this month. While rates aren’t as low as earlier this year, mortgage interest rates still remain low historically speaking.

With signs that the housing market is cooling and interest rates are staying low you have decided that now is the time to buy your first home. But what is the first step? Unless you are lucky enough to have the cash available to purchase without financing you should talk to a mortgage broker before you even talk to a real estate agent or search on MLS. By sitting down with a mortgage professional you can eliminate uncertainty and save yourself a lot of time when searching for a home. In many cases it takes only a 10 minute conversation to get assessed. You’ll be able to set a realistic price range and become aware of any potential pitfalls that could arise when satisfying conditions for the lender. Visit my website www.TridacMortgages.com to submit a quick & secure online application or send me an e-mail if you have any questions?

Chris Molder – Son Of A Broker

2.80% – 1 Year Fixed

3.75% – 3 Year Fixed

4.25% – 5 Year Fixed

3.13% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.65 3 Year Variable

P-.60 5 Year Variable

Prime Rate is currently 2.50%.

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Monday Mortgage Minute June 14th- Interest Rates

chris — Mon, 14 Jun 2010 23:26:01 +0000

World Cup fever is on in Toronto and mortgage interest rates are remaining low and stable. While a variable rate mortgage may not fit everyone’s needs it remains a good option in today’s market. Give me a call to discuss whether it is right for you?

Chris Molder – Son Of A Broker 416.461.0204

2.80% – 1 Year Fixed

3.75% – 3 Year Fixed

4.25% – 5 Year Fixed

3.13% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.65 3 Year Variable

P-.60 5 Year Variable

Prime Rate is currently 2.50%.

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Monday Mortgage Minute June 7th 2010

chris — Mon, 07 Jun 2010 20:02:36 +0000

Following the Bank of Canada’s interest rate announcement last Tuesday we weren’t too sure in which direction the fixed rate market would move. Mortgage lenders responded by lowering their fixed rate mortgage rates. They also increased the spread on the 5 year variable rate mortgage from P-0.50 to P-.60 giving an effective rate of 1.90% based on the new prime rate of 2.50%. If you are just entering the interest rate market because you are considering buying or your mortgage is coming up for renewal it may not be obvious whether to go fixed or variable in this market. The circumstances are individuals are unique and there is a mortgage solution to suit your circumstances give me a call to discuss. 416.461.0204ext2

Chris Molder – Son Of A Broker

2.80% – 1 Year Fixed

3.75% – 3 Year Fixed

4.25% – 5 Year Fixed

3.10% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.50 3 Year Variable

P-.60 5 Year Variable

Prime Rate is currently 2.50%.

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Bank of Canada Prime Rate Increase

chris — Tue, 01 Jun 2010 16:12:56 +0000

The Bank of Canada today announced that it is raising the prime rate by one-quarter of a percent. Canada’s economy is growing faster than expected along with inflation. But uncertainty about Europe’s debt crisis will affect how quickly interest rates can rise. Click here to read the full Press Release.

If you are curious about “What Goes Into A Rate Decision” the Globe & Mail has created a great interactive tool. It’s quick and simple to read click the link above.(The different panels are hidden across the top of the text box. Click on the Title to get the panel.)

What does this mean to you?
If you are in a variable rate mortgage your monthly mortgage payment will increase over the next couple of weeks. Expect a letter from your lender indicating the new rate and payment amount. The prime rate will increase to 2.50%. This will also effect your lines of credit that are based on prime as well.

Should I lock in?
Up until about 4 weeks ago most observers were expecting the prime rate to increase by 0.50%. The 0.25% increase that we have seen today indicates that the so called recovery isn’t as strong as expected. While there will be a trend towards higher prime rate in the future we feel that it will be a very slow and gradual increase. We would advise to stay in your variable rate mortgage because if you were to lock in today you would be looking at a fixed rate of 4.59% which is significantly higher than the effective rate on your variable. In the mean time you can continue to enjoy a low payment and have the ability to pay more off your mortgage.

Mortgages are very dynamic and the guidance that we offer is based on the circumstances of each individual. If you would like to review your mortgage to make sure that you are still on track please call us to have a quick chat. 416.461.0204