Financing

[mikestr]

I happy to say that within 3 weeks of reading all the books, I took an action step and made an offer on a great property and was accepted by the seller with my goals all intact! Although I have having an issue with Financing even with excellent credit and a descent ratio. It seems that CMHC has really tightned the ropes and are questioning EVERYTHING that they see as questionable. As suggested I laid everything on the table and I am having issues with my very first property!

I might be able to get this one, BUT the next property will be an issue, I am feeling some frustrations here.

Am I working with the wrong mortgage broker?

Any suggestions would be appreciated.

 

[GarthChapman]

How experienced is your mortgage broker in representing property investors?

How much of their business does that segment represent?

How many mortgages do they process per month, per year?

Did they ask about your long term goals and plans? Remember that their job is to align the mortgages they get for you with those plans/goals.

 

[mikestr]

QUOTE (GarthChapman @ Dec 16 2008, 02:01 PM) How experienced is your mortgage broker in representing property investors?

How much of their business does that segment represent?

How many mortgages do they process per month, per year?

Did they ask about your long term goals and plans? Remember that their job is to align the mortgages they get for you with those plans/goals.

He is experienced but I am not certain whether his focus has been with real estate investors specifically. Regardless it seems that CMHC is really coming down on people and are not taking any chances with ANYONE that is close to the ratio. I am not certain that a different Mort. broken would change anything. BUT that being said, where do I start looking for one that has more experience with real estate investors? Can anyone make any recommendations in the GTA?

 

[MikeMcCrae]

Everybody is getting tighter these days. But definatly make sure your broker understands the rental business. The game is changing daily and even someone who is on top of it is not really on top of it right now. Remember that if it was really easy everyone would do it.

 

[Thomas Beyer]

QUOTE (mikestr @ Dec 16 2008, 11:38 AM) I happy to say that within 3 weeks of reading all the books, I took an action step and made an offer on a great property and was accepted by the seller with my goals all intact! Although I have having an issue with Financing even with excellent credit and a descent ratio. It seems that CMHC has really tightned the ropes and are questioning EVERYTHING that they see as questionable. As suggested I laid everything on the table and I am having issues with my very first property!

I might be able to get this one, BUT the next property will be an issue, I am feeling some frustrations here.

Am I working with the wrong mortgage broker?

Any suggestions would be appreciated.
Ever since the mortgage crisis in teh US, and now with slightly falling prices in Canada, CMHC is getting more difficult .. I can confirm that as we have most our our multi-family mortgages with CMHC .. lots more paperwork, lots more questions .. nothing too bad but yes, more anal, more time required, lower loan-to-value ..

get an experienced broker on your team .. but most data/answers have to be provided by you, the buyer !

 

[mikestr]

Thanks everyone for your feedback. Nobody said it would be all fun.

 

[zimnicki]

QUOTE (mikestr @ Dec 16 2008, 07:43 PM) Thanks everyone for your feedback. Nobody said it would be all fun.

It`s all fun, stay positive and keep going! Don`t lose the drive!

 

[RobMacdonald]

One of the most important members of your team is your mortgage broker or banker. You need to work with someone that understands the power of the REIN system, and can assist you in acheiving your long term objective.

Did your existing broker ask you `what is your long term plans`? If they didn`t, then the financing your are arranging could significantly affect your ablility to have long term success obtaining financing. It`s easy to do the first deal, and maybe the second, but in the long run it gets more and more complicated with each purchase.

 

[SamEfford]

Recently, I had my wife`s cousin who is a Mortgage Broker ask for some business from me. Since he is family, I offered him a deal that I was working. He was unable to get me the financing through a major bank. I then contacted my usual broker (Peggy Wong at Peter`s Kinchs office) who closed the deal with that same major bank.

Your broker is a very important member of your team. Choose wisely!

 

[wealthyboomer]

QUOTE (SamEfford @ Dec 20 2008, 06:21 AM) Recently, I had my wife`s cousin who is a Mortgage Broker ask for some business from me. Since he is family, I offered him a deal that I was working. He was unable to get me the financing through a major bank. I then contacted my usual broker (Peggy Wong at Peter`s Kinchs office) who closed the deal with that same major bank.

Your broker is a very important member of your team. Choose wisely!

What did Peggy do that was different from your family member?

 

[SamEfford]

I have no idea, but that is why I use them - they get results.

 

[mikestr]

QUOTE (SamEfford @ Dec 21 2008, 03:46 AM) I have no idea, but that is why I use them - they get results.


In my experience Brokers have friends on the inside that pull some strings to make things happen.

 

[RobMacdonald]

It`s not really that we have `friends on the inside`, but it`s just understanding the whole picture. We look at a certain client, and can immediately know what banks will be an option for them. Every bank has slightly different policies and it`s knowing how to work within those policies. How you `present the deal` is one of the key things.

Your banker may be limited by the interpretation of their supervisor, the branch manager, regional loan centre. Someone along the way may look at real estate investing as `risky`, and there goes the chance of approval.

 

[kboughen]

QUOTE (mikestr @ Dec 16 2008, 01:38 PM) It seems that CMHC has really tightned the ropes
As Rob mentions above, when it comes to rental properties, there are significant policy differences between Lenders. It is very important to find the Lender that has the solution for your needs. I would not say "strings get pulled" but I would say "Relationships and knowledge are key". CMHC has been tightening up, but it is the Lenders that are really tightening their underwriting policies. REIN has been telling us for months that this would happen and it has, but if you follow the system and complete your Financing Binder, it still runs pretty smoothly. It is also important to remember that CMHC is not the only insurer out there, when they say "no" others often say "yes".