For Canada, the much anticipated 0.5% rate cut will come tomorrow putting more deflationary pressure on the Canadian Dollar. Uncertainty has already been reflected as today’s Canadian Dollar dropped to $1.289 against the US Dollar.
At present, it is increasingly difficult to find financing in the conservative Canadian market. Most lenders have an appetite for Industrial (single & multi tenant, investment and owner occupied), Retail (strip malls, big box, anchored and non-anchored retail), Office (class A, B and C) and Residential (low, mid and high rise apartment buildings). Properties without income equates to lack of cash flow which is risky in this market.
Floating rates mortgages are limited to 1-2 years and are reserved for stronger clients. Most lenders are more inclined to quoting a fixed rate as opposed to a spread over Canada Bond, a floor rate or quoting based on their "cost of funds".
LTV range from 60% - 70% investor with owner occupied and CMHC insured multi-residential capped at 85%.
The credit score is used often to determine the credibility of a client based on past records. Essentially the following is the relative weighing of factors determining the credit score: Payment history (35%), outstanding debt (30%), length of credit history (15%), recent inquiries(10%), types of credit (10%).
So make sure you repay your debts on time as promised, borrow well below maximum limits, have an established history and avoid numerous credit enquiries in short time periods. Also if you have a property to mortgage, it is much easier to obtain financing by leasing or renting out first.
Hope this has been helpful.
At present, it is increasingly difficult to find financing in the conservative Canadian market. Most lenders have an appetite for Industrial (single & multi tenant, investment and owner occupied), Retail (strip malls, big box, anchored and non-anchored retail), Office (class A, B and C) and Residential (low, mid and high rise apartment buildings). Properties without income equates to lack of cash flow which is risky in this market.
Floating rates mortgages are limited to 1-2 years and are reserved for stronger clients. Most lenders are more inclined to quoting a fixed rate as opposed to a spread over Canada Bond, a floor rate or quoting based on their "cost of funds".
LTV range from 60% - 70% investor with owner occupied and CMHC insured multi-residential capped at 85%.
The credit score is used often to determine the credibility of a client based on past records. Essentially the following is the relative weighing of factors determining the credit score: Payment history (35%), outstanding debt (30%), length of credit history (15%), recent inquiries(10%), types of credit (10%).
So make sure you repay your debts on time as promised, borrow well below maximum limits, have an established history and avoid numerous credit enquiries in short time periods. Also if you have a property to mortgage, it is much easier to obtain financing by leasing or renting out first.
Hope this has been helpful.
2 comments:
forgive my ignorance.
What is a "floor rate"?
"LTV range from 60% - 70% investor with owner occupied and CMHC insured multi-residential capped at 85%."
I also don't understand this paragraph. Loan to value ranges from 60% to 70% for investors, while owner-occupied and CMHC insured multi-residential LTVs are capped at 85%???
What does CMHC stand for? @_@
Floor rate basically means the minimum rate that can be charged.
CMHC stands for Canadian Mortgage & Housing Corporation. They have an insurance for mortgage loans but borrowers have to pay a premium.
LTV: Loan to value
It means how much loan you are getting when compared to actual value of the property. It also means the rest is your equity. 60% LTV means 40% equity (straight up payment).
With insurance, you need less equity but need to pay more interest per month as the premium is added in. Therefore you are able to get up to 85%.
Of course the US was giving loans with LTV of 120% or something, and their insurance means crap. Think about what that means.
Post a Comment