Mortgage Expert

How to Make Your Mortgage Interest Tax Deductible

noreply@blogger.com (gurmitsingh.ca) — Wed, 20 May 2009 17:26:00 +0000

In Canada it is not possible to make the mortgage interest on your primary residence tax deductible. Sorry, but; you can make a few maneuvers using your primary residence mortgage as a starting point and the successive mortgages, if being used for income and or investment, will have tax deductible interest. It is pretty simple, but the legalities are very fine and court cases have upheld in some cases that the homeowner had committed tax evasion not clarifying the line between the residence mortgages. Your best bet is to get a good financial planner, being paid by you and work for you.

A good financial planner is well aware of the methods available to get the best use of mortgage monies. We as consumers still think like our parents, believing that the only thing that can be done with a mortgage is to get good terms, make a large down-payment with open terms and low interest rates, and pay the mortgage off as soon as possible. Most often the mortgage took at least 15-20 years to pay off. Hence, another reason that financial stability seems to only happen to people over thirty.

If you have the money to pay off the mortgage, do it. Borrowing money should not be a life plan unless you are certain to make more money than you are borrowing. There are a few ways to make this happen; beginning with the original mortgage on the primary residence which remember, is not tax deductible. The capital that would have gone into the residence can then be invested in securities comfortably to build wealth, but a rate that is not going to put your future wealth in jeopardy.

If you are interested in opening your own business you can use those monies to pay off the non-tax deductible interest mortgage and the only mortgage remaining is the mortgage with the tax deductible interest. The money that is accrued with the deductions can be used to pay down the mortgage early. This capital can be used for down-payment on loans at a lower interest rate to purchase securities, or expand the business, either way the tax deduction is there and something to accrue more capital.

Do you own stocks or bonds? Sell the securities and pay off the primary mortgage, in turn borrow the capital to purchase more investment/income property and with a lower interest rate and shorter term the money saved added to the tax deductions gained from the income bearing mortgage can be accrued to further strengthen your personal wealth.

These types of plans are different from leveraging. Leveraging is the concept that had our American neighbors in such a financial conundrum in 2008; it requires that you increase your debt to take a chance on increasing wealth. It would mean borrowing more that the amount of the non-tax deductible interest mortgage and using the difference from the borrowed capital to purchase the securities. Securities seldom pay the interest that will be spent on the mortgage tax deductible or not in time for the average consumer to make a profit before the next economic downturn.

Although the two plans above are not as risky as leveraging: DO NOT TRY THIS AT HOME. Get the financial planner to assist with these maneuvers to lower risk and to assist with getting the best rate of return on any capital that may be interest bearing and increasing your wealth.

Gurmit Singh
Mortgage Expert, Author and Real Estate Investor
M08009905
http://www.gurmitsingh.ca
email: gurmit@gurmitsingh.ca
Dominion Lending Centres Mortgage Villa (11574)

Gurmit Singh Toor http://www.gurmitsingh.ca

Refinancing After Bankruptcy

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 14:08:00 +0000

Refinancing after a bankruptcy is not impossible, but it does take some work, and while some companies will refinance a day after the bankruptcy is discharged, it is not a good idea because the lender is not the most reputable. Use the six months to prepare properly for the refinance. Research lenders and their rates the easiest method is using online resources. Lenders who deal with discharged bankruptcy refinancing are sub-prime lenders and as expected these mortgage lenders will charge more fees and higher interest rate, hence the importance of doing the research. Try for a slightly higher interest rate and the fees are usually lower.

The optimum package will include savings on the closing costs. It is important to figure in the closing costs because if the thousands that could spent on the closing, the monthly payments and amortization period could result in the short term appearance of saving money, but really be taking away from your personal wealth.

Look for a lender with a well rounded package: long mortgage terms with low interest, an open mortgage with the ability to pay off or even with an automatic refinance option when your credit score is improved. Rebuilding your payment history is crucial to getting the best mortgage terms. Credit scores are still important therefore it is recommended that a credit card account be opened with a reasonable daily balance and keep the payments current. Make sure the current mortgage payments are made on time proving to the lenders that risk has improved.

As always having cash will improve your position when the mortgage terms are being negotiated. The larger the down-payment the less risk the lender has, while giving the assurance that you are serious; therefore, the better your position. Hold onto the equity you have; that equity will improve your credit score. The importance of equity is minimal with the bankruptcy refinance on the mortgage with the sub-prime lender. These lenders seldom look at the equity, but the overall position.

When you are in a better credit position the equity can be used to go from a sub-prime mortgage to a prime mortgage, or when you are trying to secure 100% financing. Save the built equity and use it later when it is the most beneficial to you. A refinance is used to lower the payment and save money so it is crucial to ensure the terms will allow for that. ARMs (Adjustable Rate Mortgages) are a good place to start. If income to debt ratio allows for the flexing of monthly payments the interest rates are lower.

Remember to allow for the later refinancing of the new mortgage because the higher your credit score the better your terms. Expecting to pay fees is basic as the lender must work harder to get the better deal. Submitting the documentation as soon as possible will allow the chosen bankruptcy mortgage lender the time to get the better interest rates and terms. The better you are at helping the lender and the better you use the six months to your advantage the better the deal and the more productive the bankruptcy refinance will benefit you.

Gurmit Singh
Mortgage Expert, Author and Real Estate Investor
M08009905
http://www.gurmitsingh.ca
email: gurmit@gurmitsingh.ca
Dominion Lending Centres Mortgage Villa (11574)

Article Source: http://EzineArticles.com/?expert=Gurmit_Singh_Toor

Importance of Credit Score and How to Improve It!

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 14:05:00 +0000

It is essential to know that having good credit score is important. Many people are aware that having a good score is very important. By having good score getting unsecured credit cards and applying for loans is much easier.

If you already have the good credit, it is great. If not then you should like to improve it to acquire best loan and credit card deals. For example, if you have beacon score of say 650 and most Loan Companies will give you better interest rates if you get rating of 680 or above. Such a difference in points can save you hundreds, if not thousands of dollars of interest.

There are some methods by which you may drastically boost your rating. Some methods take time to achieve and few take only some weeks to do it. Nevertheless, if you start working on that as early as possible, then you can see that it is worth all your effort.

Therefore it is very important for you to improve your rating even though you have had a fair credit rating. It will denote lower interest rates, and higher probability of obtaining the loans when you need them.

Ways to Improve Your Credit Score

Initial way for improving your score is to make sure your credit report has no errors. Even small errors can fundamentally hurt your score. Thus, if you presume that your low score has been caused by the inaccuracy, and then you must contact the credit reporting agencies and request them regarding the correct the errors in your report.

By paying your balances each month, you will improve your score. I would suggest making weekly or at least bi-weekly payments towards your debts on your report. This way you will never be late for payment. Always make sure to pay more than minimum required. This will keep you away from the debt and will save lots of money on the interest rates. This may show that you can manage your debt efficiently and improve your credit rating.

Thus having a few cards, at least two, will improve your score. Having four or more cards will lower your score. Thus, it is very important that you have one or two credit cards. Don't max out any card, leaving at least unused 30% limit on your card will help you improve your score. Maxing out on limits will lower your score.

If you had a loan before, then it is important that you pay your loan on time. This may have the positive impact on your card score, as it will show to agencies as well as creditors that you can manage all your debt efficiently and this will boost your score.

I hope this will help you improve your score. For more articles and blogs regarding credit scores and mortgages, interest rate, please visit http://www.gurmitsingh.ca Good Luck

Gurmit Singh Toor

Mortgage Expert, Real Estate Investor, Author

M08009905

Email:gurmit@gurmitsingh.ca

www.gurmitsingh.ca

Dominion Lending Centres Mortgage Villa (11574)

Article Source: http://EzineArticles.com/?expert=Gurmit_Singh_Toor

Why Pre-Approval is the Best Choice For Home Buyers!

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 14:01:00 +0000

It is an exciting time when a family prepares to buy their first home. Everyone knows what the house will look like and what features they cannot live without. And finally, they will own something of their own. They found their dream house and now the family looks for a way to finance their most important investment. After searching through banks and mortgage brokers, the family finds they must scrape a larger down payment to get their dream home financed, or they must return to house hunting and find a less desirable piece of property.

Avoid disappointment by obtaining pre-approval from a lender

Anyone in the market for real estate, who cannot pay cash, is going to need a mortgage, it is best to shop for a lender and get pre-approved before searching for the home. The process is simple; take income and credit information to a lender and the lender will determine how much they would loan and mortgage rate before shopping for the property. The pre-approval is valid for at least 60 days but some lenders will go as long as 120 days. When the time comes for the final approval, there will be another check of the buyer's credit and employment to verify the final amount.

Another condition to be aware of is the fluctuation of interest rates. If the rate pre-approved is lower than the current rate, it could decrease the mortgage amount; requiring a larger down payment or the buyer may be sent back to find another home. Many lenders will guarantee (lock-in rate) the pre-approved rate or the current mortgage rate which ever is lowest; thereby, alleviating another concern for the buyer.

Pre-approval signifies to the seller the buyer is serious and the lender is serious about giving up the money. The things the pre-approval does not do is cover closing costs, inspections, appraisals, legal fees, land surveys, title insurance, land transfer taxes or the cost of moving, nor is the process binding.

The buyer's credit or income situation may change causing a denial or change in the amount or mortgage rate. The property being purchased is the collateral for the mortgage so if a deficiency is found that decreases the value of the home the lender can still approve the buyer but deny the property. The same scenario holds if the property is priced higher than the appraisal for the area where it is located. Be sure to sign the financing contingency to be covered in case the lender does decide to deny financing the property.

The pre-approval is good for other financing as well, but to the first time home buyer who is excited, nervous, etc about the whole process; the pre-approval is a tool to help control the stress. The buyer and the real estate agent will know what the buyer can afford and the agent will better know how to serve the buyer's needs. The seller and the seller's agent will know that buyer and lender are sincere, and may even work with the buyer more than a buyer with out a pre-approval. This is the best choice if for no other reason than less stress!

For pre-approval and approval of your mortgages, visit http://www.gurmitsingh.ca and submit the application online.

Gurmit Singh Toor
Mortgage Agent
M08009905

Email:gurmit@gurmitsingh.ca

www.gurmitsingh.ca

Dominion Lending Centres Mortgage Villa
Lic:11574

Article Source: http://EzineArticles.com/?expert=Gurmit_Singh_Toor

Choosing the Right Mortgage Terms For You!

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 13:57:00 +0000

You have done everything by the book: you got a pre approved guaranteed rate, you found a home that is able to be financed and is fitting your needs and your budget. Just when you thought the interest rate was the only thing you needed to be concerned with your lender starts talking about terms.

Fixed or variable, amortization length of term, open or closed. What is the lender talking about? These are all alien words to you, but don't worry the terms are easy to understand and if you read on you will be prepared for what the lender throws at you. Mortgage terms only begin with the interest rate and the listed rate for the day is a basic number and can be affected by other terms of the mortgage.

Another concern beyond the monthly mortgage payment is the total you have paid before you can burn the mortgage. Did you also know that the crummy rate you started with can be renegotiated after a certain period of time? All of these are part of what are the mortgage terms.

If you have a lower credit score you are probably aware of the ARM or Adjustable Rate Mortgage usually given a lower rate than a fixed rate, but it is the riskiest term available. The environment of the housing market and the lending markets have a profound affect on the interest rate and the ARM can change with the market and cause a serious rise in the monthly payment.

The ARM is responsible for many next door in the US losing their homes through foreclosure not being able to afford the increased payment. The amount of the mortgage in the long term could amount to thousands of dollars more paid. This term is best to be limited to a few years for the buyer to improve their Credit Score and renegotiate once expired. The length of the term is variable and can allow for the lender to require the mortgage to be paid immediately; most will not want to lose that tens of thousands of potential dollars paid in future interest and will negotiate to keep you as a client.

Opposite the ARM is the fixed rate mortgage. It comes with a higher basic rate, but in return you get the comfort of a stable monthly payment. If you want to be allowed to pay lump sums per year (often a $100.00 minimum). There may be restriction on the amount of lumpsum payment per year you can make, normally twenty percent.

The higher interest rate seems like it may be costly, but a few dollars each month can turn in to tens of thousands is savings by early payoff, and possibly open the door to wealth building The Closed Mortgage is very restrictive and has penalties for early pay off and while the basic interest rate is lower, you may pay more for the length of the term or the amortization period abiding with the terms.

The terms of the mortgage contract should be understood and be planned in advance of any negotiation with the lender. It is imperative that all the necessary documents and information be made available to the broker or bank lender to ensure plenty of time to get the terms that best fit your financial future. Bad credit can be fixed but if you fix it before you start to shop for the home and mortgage you will be able to get the best deal.

Gurmit Singh Toor, MBA
Mortgage Agent, Real Estate Investor and Author

M08009905
http://www.gurmitsingh.ca
Email:gurmit@gurmitsingh.ca

Dominion Lending Centres Mortgage Villa (11574)

Article Source: http://EzineArticles.com/expert=Gurmit_Singh_Toor

Despite the Bad Credit You Can Still Get a Mortgage!

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 13:36:00 +0000

There are stories all over the media and urban legends that a consumer must always live in a rental home or with parents because they suffer from a low Credit score. Not true. The mortgage market is loaded with lenders who are willing to take a chance on someone with bad credit. Often the consumer is left with a high rate, adjustable and restrictive terms, but they will own their own home, and have a good jump off point to increase coveted Credit Score and start building personal wealth.

All professionals recommend the bad score be avoided but life does not always go as we have dreamed, but when things do go wrong the same professionals have lists of advice to help get started again. SUB PRIME MARKET Opposite the traditional prime lending market which is open and available to high and average credit scores is the Sub Prime Mortgage Market.

This is a growing market and is becoming very competitive. The Sub Prime lenders further divide that market into four classifications: A and B are the lower risk in the prime mortgage market. These consumers have low scores for some reason such as divorce or medical bills. This market looks at the reason for the score and the ability to pay the monthly payment as much as the score it's self.

The C and D classification are those with more risk involved. The terms of the mortgage will be higher and restricted than that of the others, but the consumer can purchase their own home. The more your history shows that you are trying to improve you the better the terms. These mortgages again, carry higher mortgage rates and fees that a prime market lender will not. But the consumer should already be prepared to pay a little more for the privilege of the lender risking the money.

The market is very competitive and a consumer who is in the D spot will be able to get a mortgage decent terms. Don't just take the first lender, check the online tools, referrals from family and friends. The best option is to hire a broker who has relationships with many lenders and given the proper amount of time, will be able to come up with a pretty good deal.

A good down payment will encourage the lenders to compete because the large down shows them that the consumer has the means and is serious about the purchase. The lenders are stricter with the debt to income ratio and that the property is in good condition to be financed.

Again, give the broker time to find you the best deal as the process is longer than prime mortgage market. PRIVATE LENDERS Yes, the original lender from history is still in the business of lending money. A private lender is an individual with expendable cash and will loan the money as and avenue for investment and if the right borrower is chosen the rate of return is higher than other investment types.

The private lender is still going to look at the credit history and do a background check on potential clients. The loan is made with the understanding the loan has interest and will be repaid. Many of the sub prime market lenders will charge up to 16-24% interest for a consumer with credit issues, where the private lender may only charge 12-18% interest.

This type of lender can close the deal faster than the lenders due to the absence of the bureaucracy and restrictive guidelines that bog down the other lenders. LEASE TO OWN is a program designed to help the consumer purchase a home when there is no other solution for financing available. The program is much more limited than others as far as the actual property available but has many options available to the home buyer.

The day you sign the contract and move in you are considered the owner. You pay a standard rental for the value of the property, a portion to work toward the down payment and taxes and insurance. As far as the maintenance and upkeep, you can live as if it is already yours. At the end of the lease term of one year the consumer is encouraged to exercise their option to Purchase, however if more time is needed the lease may be renewed for one more year with an increase in purchase price.

If unable to obtain a traditional or assisted down payment to get financing, there are some programs under which some funds are available for Down payment assistance. The best option of all is to get the credit score score up and with stable income and a healthy down payment the consumer can expect the lenders to compete for their business.

Gurmit Singh Toor, MBA
Mortgage Agent M08009905, Real Estate Investor and Author
Http://www.gurmitsingh.ca, Email:gurmit@gurmitsingh.ca
Dominion Lending Centres Mortgage Villa (Lic. 11574)

Gurmit Singh Toor
http://www.gurmitsingh.ca

Article Source: http://EzineArticles.com/?expert=Gurmit_Singh_Toor

Despite the Bad Credit You Can Still Get a Mortgage!

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 13:36:00 +0000

Gurmit Singh Toor, MBA
Mortgage Agent M08009905, Real Estate Investor and Author
Http://www.gurmitsingh.ca, Email:gurmit@gurmitsingh.ca
Dominion Lending Centres Mortgage Villa (Lic. 11574)

Gurmit Singh Toor
http://www.gurmitsingh.ca

Article Source: http://EzineArticles.com/?expert=Gurmit_Singh_Toor

The Easy Way to Buy Your First Home!

noreply@blogger.com (gurmitsingh.ca) — Sat, 09 May 2009 13:28:00 +0000

First time home buying is close to the most stressful undertaking in life. Obtaining the 'Canadian Dream' of owning the first home can be full of good exciting stress or it can be agonizing torture. How you want the process is up to you. You can go it alone with the help of well meaning friends and family or you can put together a winning team of pros including (not limited to) Realtors, appraisers, and a good mortgage professional. A good team can make the experience easier and exciting and the following is a brief look at who's needed and how they will help.

The Realtor:

Parents do not hire child care, nor do employers hire associates with out an interview, and reference check, nor should you. This will be your team manager, your closest partner. The agent has the experience and the answers to the tough questions. Some advise hiring a duo to always have someone on the job. Although some agents are willing to work for the buyer and the seller, and it is legal, avoid this and find someone who is exclusive to your interests. The agent is an experience negotiator and will become important during the offer process.

Mortgage or Banking Professional:

If you have the credit scores and down payment to be able to get you're financing with the bank, good for you! That is not as common as it seems so most first home buyers will go through a Mortgage Consultant. Even with the ability to use the bank lender, the Mortgage Consultants have access to a broader base of lenders and can get the best offers for your position. There is more involved than interest rates and monthly payment amount, so the Mortgage Pro you choose should also be interviewed, and the references checked. The best way to handle the process is the get a guaranteed preapproval which is a great tool for using when while looking for the right house. The inexperienced buyer may get their heart set on a home that is too expensive, or can not be financed for any number of reasons.

Appraiser:

Get a second opinion on the value of the property, again you can use the seller's but that appraiser is working for the seller and you want to be sure the valuation of the home is accurate.

Contractors, Architect, Designers etc:

Building your first home from the ground up can be exciting, but there are a host of other issues with the project that require expertise. One who can build a frame may not understand the proper material needed for the electrical system. You can pay the contractor who has access to the other tradesmen to finish the home.

Lawyer:
The only people who really know what is in the fine print are the one who wrote the fine print! Get an attorney with real estate experience. A great criminal lawyer who happens to be a friend of your cousin may not notice a small detail that a lawyer who has experience would. Closing procedures are involved and it would be best to have your lawyer there to oversee the wording and all the conditions agreed on in the offer are met. A contractor may not always be honest and having a present lawyer who is working for you may keep that contractor on the job working for you. If an issue with local codes and guidelines for building come up, the buyer already has the right representation.

Inspector:

It is almost certain that unless the buyer is an inspector, a structure, plumbing or electric system problem may be missed. The negotiation process will involve the topic of problems that affect the price or determining if the home can be financed. The walk through at before closing is another good time to have your inspector with you to ensure all conditions have been met. If the first home is being built, the inspector is crucial. There are codes for safety, esthetics, etc; proper procedures and using the proper materials are only some of the issues that arise during the building process.

The first time home buyer usually knows as much as the first time parents caring for a baby. Luckily, for buying the house there are numerous resources to help with the day to day business leaving the buyer to get the best deal for the investment. Most importantly the team members you hired are experienced and while every decision is yours, communicate and work with the team. Find out ahead of the appointment with the Mortgage consultant or the Realtor what they from you and work to ensure you do all you can. You are the most important member of the home buying team.

Gurmit Singh
Mortgage Agent M08009905, Real Estate Investor and Author
Email:gsingh@dominionlending.ca
http://www.gurmitsingh.ca

Article Source: http://EzineArticles.com/?expert=Gurmit_Singh_Toor