What is a Straw Borrower?

    What is a Straw Borrower?

 

 

  

You don't need to use a gun to rob a bank. 

Criminals can do the same with some little know-how.

You could be committing mortgage fraud without even knowing it. Perhaps an acquaintance of yours tells you he's in a financial pickle. He's found a house he really wants to buy but the bank will turn him down because of his bad credit. 

He offers you a few thousand dollars to lend your good name and credit to act as the buyer of the property. He assures you he will make the mortgage payments.

The mortgage is issued and your friend moves into the house and - you assume - makes the mortgage payments.

Did you know that you can go to jail for letting someone use your name to falsely obtain a mortgage? Some people apparently don't know.

So, a straw borrower is a person who consents to use their name, personal details and their credit to be used for the purpose of obtaining a mortgage loan with no intention of ever using or living in the house.  Sometimes a Straw borrower will be offered a payment for the use of their credit.

Why is this illegal if the mortgage gets paid? Because of RISK posed to the lender. You make false statements to lower the perceived risk and therefore commit mortgage fraud by making false statements that you intend to occupy the property to the lender at the time of application.

Buyers beware.

  

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5

What is a private mortgage?

What is a Private Mortgage?

  

 

  

It is a mortgage that is held by a private individual where the client could not get approved through an A or B bank.

People will use a private mortgage for the following reasons:

1. If the mortgage is in arrears with the bank
2. If there is a grow op of marijuana
3. If there is a bankruptcy and the client has not or just been recently discharged
4. If the client needs money for construction
5. If the client does not show a lot of income

These mortgages are short-term for only 1 yr until the client gets their situation better. The interest rates are higher, but it is better than paying 19-25% on their credit cards.

The public sometimes are upset to pay a private individual higher interest rates, but aren't they upset to pay the bank the higher interest rates?

The public needs to understand that the banks will take a polaroid photo of your current situation. Once looking at the photo, if they do not like it they will not be able to help you out.

Thankfully, these private individuals do exist to help you short-term and get you out of this situation and when there are improvements we can move you back to the bank.

That is why it is important to understand that the banks are running a business and the client cannot take it personally.

It is important to be informed and educated.


 

 

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5

What is a Phantom Mortgage?

What is a Phantom Mortgage?

 

 

  

Whenever you purchase a new condo, there is a period of time between when you take occupancy of your unit and when you take ownership of your unit. This is known as the 'interim occupancy'.

You can't own something that doesn't exist, and in real estate in Ontario, a property does not exist until it is registered.

This process takes some time in a new condo because there are often hundreds of units to register at the same time.

Once your unit is ready and liveable, you take possession of it, but not ownership. You must pay the developer for the right to live in the unit. This is known as a phantom mortgage because you are paying rent to the builder.

The occupancy period ends when the building is registered, your mortgage kicks in, and you get the deed to your property.

So should you let the phantom mortgage deter you from purchasing a new condo?

Absolutely not! But be an informed buyer!
  

  

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5

Toronto Mortgage Broker - Why go with a variable rate mortgage?

Toronto Mortgage Broker - Eduarda Pita

Why go with a variable rate mortgage?

For more information please contact us at 416-920-9931 and visit us online at www.eddiemac.ca

New Mortgage Rules effective July 09, 2012...

Toronto Mortgage Broker - Eduarda Pita New Mortgage Rules effective July 09, 2012...

Ottawa tightens Canada's mortgage rules, not good news for homeowners or potential buyers.

Only CMHC insured mortgages will be available for a maximum amortization of 25 years, down from 30 years.

Maximum Equity take out on homes will be 80%.

Homes with a purchase price of more than $1 million will no longer be available through CMHC

For more information please contact us at 416-920-9931 and visit us online at www.eddiemac.ca

Tips on how to improve your credit score

 Tips on how to improve your credit score 

 

 

  

Avoid late payments on your credit cards. If you can, don't wait until the end of the month to pay you credit card bills. If you buy something today, go the bank the next few days and pay it off in full or make the payment earlier and not wait until month end. Also make more than interest only payments.

Do not let people pull your credit too regularly because your score will go down.
Only pull when necessary to buy a property.

Do not close your credit cards.
The older your accounts, the better your score is

Avoid having high balances on your credit cards.
Try to stay below your credit card limits and not be over the limit. Your credit card balance should be no more than 80% of your credit limit.

No credit is bad credit.
Try to establish some credit to show that you can be responsible with your payments. Worst case, use cash as collateral to secure credit

Avoid bankruptcies, credit proposals, judgments and collections.
 

Click here to view video

  

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5

Toronto Mortgage Broker - Tips on how to improve your credit.

Tips on how to reduce your mortgage

Tips on how to reduce your mortgage

and save for the long term...

 

   Tips on how to reduce your mortgage.

1. Always go biweekly on your mortgage payments and NOT monthly.  Monthly payments will work out to 12 installments and biweekly will end up to be 13 monthly payments a year.

2. Always try to exercise your pre-payment privilege each year.  With most banks you can put 10-20% on the original mortgage towards the principal.  So when you have extra money, your tax refund or vacation pay, put it towards the mortgage principal.

3. Go variable but make your mortgage payments based on the fixed.  This way you will be throwing more principal towards your mortgage.

4. Sometime's its not only the mortgage that people have to pay.  It is also the other debt such as car loans and credit cards.  It is best to refinance the mortgage plus the debt and make one payment, that way you are able to save money and be more aggressive on your mortgage payment.

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5

Should I refinance my mortgage?

Should I refinance my mortgage?

 

 

 

   

The answer is "yes".

We should learn to make life easier by adding all the debts into one.

So if you have a mortgage and line of credit payments, car payments and credit card debts it would make sense to combine all into one. Canadians always complain we work a lot but in the end of the month, there is never enough funds to cover everything.

Some people often say that a car payment with zero percent doesn't make sense to add onto the mortgage. But I disagree. If a client is sick, they will have to make the mortgage payment and the car payment regardless. However, if they have one payment on the mortgage and things are financially tight, they can reduce the mortgage payments.

Remember, banks when they give you credit they know statistically the odds are against you. You could lose your job, get sick, go through a separation or lose your marbles.  Eventually you will have several payments and it will be difficult to pay everything off at once.

So my advice is to make things simple. Make one payment without the headaches.

Become an informed client. 

For more information contact us at 

416-920-9931 or mortgages@eddiemac.ca

Visit us online at www.eddiemac.ca

Your Toronto Mortgage Broker

637 College Street, Suite 201, Toronto ON, M6G 1B5