Can you get a second mortgage with a different mortgage broker?

If you are in the market for a second mortgage and are not happy with your current mortgage lender or mortgage broker, you may be wondering whether you can switch and use a different mortgage broker or mortgage lender than you did for your first mortgage.

 

Well the answer is yes, and this is because your second mortgage is tied to your home equity and not directly to your first mortgage. This makes it easy for you to change mortgage lenders or mortgage brokers when looking for a second mortgage. 

To understand why this is the case, it is helpful to understand what a second mortgage is and how it works. 

What is a second mortgage?

A second mortgage in Brampton is a loan that is secured using the equity in your home. Most lenders will allow you to borrow as much as 85% of the value of your home equity. Therefore, if you have a home value of $600,000 and you have $200,000 left to pay on your mortgage, you should be able to borrow up to $310,000 with a second mortgage. (There are even some lenders that will allow you to borrow up to 90% of your homes equity, but these lenders base their approvals on many different factors)

How do I apply for a second mortgage?

The process for applying for a second mortgage isn’t really all that different than that of applying for a first mortgage. Your home will need to be appraised in order to determine how much home equity you have and you will have to provide a number of financial documents in the application process. Fortunately, since a second mortgage is a loan is secured against an asset that you already own (your home), you do not necessarily have to have perfect credit in order to qualify. 

Is changing lenders or brokers a good idea when I get a second mortgage?

Even if you are happy with your current lender, it is always a good idea to compare rates. Even a small discount can result in big savings over the long term.

As far as mortgage brokers, you should always work with a mortgage broker who has your best interest in mind. It is more than ok to use a different broker if you are unsatisfied with their previous service and commitment to you. If you decide to stay with the same broker, they should be willing to compare lenders for you again to see if anything has changed since your first mortgage.

Contact me today!

If you are interested in learning more about second mortgages or in submitting an application, I would love to help. Contact me today for a consultation.

How Rumy Gill Can Help You Get a Bad Credit Mortgage in Brampton?

If your credit is less than perfect, you are probably well-aware how difficult it can be to get a mortgage. What you might not be aware of however how Rumy Gill a Brampton Mortgage Broker can help you get a mortgage and finally become a homeowner – yes, even if you have bad credit. 

As a Mortgage Broker working in Brampton Rumy Gill has been helping people get bad credit mortgages for years, and he can help you too. Here’s how:

What is a bad credit mortgage? 

A bad credit mortgage – just like the name suggests – is a mortgage or home loan specifically tailored for people with bad credit. While major banks and other “A Lenders” require that you have good credit in order to get a mortgage, there are B lenders and private lenders that specialize in helping people with poor credit get mortgages. 

These lenders will look at other factors besides your credit history when making a loan. They will look at the bigger picture such as your ability to make payments and the value of the property that they are making the loan on. While the interest rates on bad credit mortgages are higher than on traditional mortgages, these loans also tend to have shorter terms. This means that it is possible to use a bad credit mortgage for a short term in order to build up your credit and eventually qualify for a lower interest traditional mortgage. 

How can Rumy Gill a Mortgage Broker working in Brampton help you if you have bad credit? 

If your credit isn’t good enough to qualify for a mortgage from an A lender, you should get in touch with Rumy Gill as soon as possible. Rumy works with dozens of lenders, many of whom specialize in Bad Credit Mortgages in Brampton

Rumy will sit down with you and review your financial situation and mortgage needs before matching you to the most appropriate B lender. If your credit is too poor even to get a loan from one of these lenders, Rumy will discuss your options for getting a mortgage from a private lender. 

Contact Rumy Gill Brampton Mortgage Broker today!

No matter what the reason is for your bad credit, you shouldn’t let it stop you from becoming a homeowner. If you have been turned down by the major banks for a mortgage – or simply know that you would be if you applied – it is time to take action. 

Contact Rumy Gill Brampton Mortgage Broker for an appointment to learn more about your options for a bad credit mortgage. 

What is the difference between renewing and refinancing a mortgage?

Most homeowners when they first sign on to a new mortgage don’t give a lot of thought to renewing or refinancing their mortgages. But eventually when their mortgage term is up (most mortgage terms in Canada are five years although they may also be longer or shorter), the time will come for them to renew.

Because the words mortgage renewal and mortgage refinancing sound similar, some homeowners make the mistake of thinking that they are the same thing. This, however, is incorrect. While both mortgage renewal and mortgage refinancing involve getting a new mortgage, they have some very important
differences.

What is mortgage renewal?
Mortgage renewal occurs when the term of your current mortgage is up but you still have money owing on your home. Usually, you will get a notice from your lender a few month or so before your term ends informing you that the term is up and offering to renew your mortgage for another term at a rate
determined by the lender.

As a homeowner, you have the option to sign and send back your mortgage renewal letter, or shop around to see if you can get a better rate or more favorable terms from another lender. It is strongly encouraged that you work with a mortgage broker at mortgage renewal time to ensure that you get the
best rate and terms for your situation.

What is mortgage refinancing?
Mortgage refinancing happens when you decide to get a new mortgage before the term on your current mortgage expires. This means you will have to break your current mortgage early.

While mortgage refinancing in most cases will cause you to have a financial penalty by the lender for breaking your first mortgage, there are some good reasons why homeowners may choose to do this. Often people refinance their mortgages when interest rates have dropped significantly or when they
wish to access money from their home equity (to consolidate debt, pay for a home renovation, etc)

It is strongly advised that if you are considering refinancing, you do so with the help of a mortgage professional who can determine whether you will be able to save enough in interest payments to offset the financial penalty for breaking your mortgage.

Are you interested in mortgage renewal or mortgage refinancing? I can help you with both! Contact me today to set up an appointment.

Top 5 facts about working with a mortgage broker in Brampton

If you are looking to purchase a home in Brampton, one of the first decisions you will have to make is whether to work with a mortgage broker or whether to try and find a mortgage on your own. Here are the top five facts you need to know about working with a mortgage broker in Brampton.

1. Mortgage brokers save you time and money
Mortgage brokers in Brampton have access to dozens of lenders (some of which you can only access through a mortgage broker). Instead of wasting time comparing rates and terms your mortgage broker can do this for you.

2. Mortgage brokers can get you lower than advertised rates.
Because mortgage brokers do so much business with lenders, they can often get discounts that you would not be able to get on your own. So even if you did all the hard work of finding exactly the right lender for you, chances are a mortgage broker could still get you a better rate.

3. Unbiased advice.
Every bank and lender will probably tell you that they have the best product for you because they are trying to sell your product. But since mortgage brokers work with many companies, they do their best to find the right product for their clients.

4. No cost to you (usually).
In most circumstances, mortgage brokers are paid a commission on what they sell, so there is no cost to the client. In some cases (such as obtaining a mortgage from a private lender), there may be a fee to use a mortgage broker but this will be disclosed ahead of time.

5. Protect your credit score.
Another reason why you should have a mortgage broker shop around for you is so that you can protect your credit score. If multiple lenders all do credit checks, it can actually lower your credit score and hurt your chances of getting a mortgage. When you work with a mortgage broker, they perform only one
credit check and share that information with any lenders they might consider to be a good fit for you.

Would you like to take advantage of all these benefits of working with a mortgage broker in Brampton?

If so, I would love to help you. Whether you are looking to apply for your first mortgage or are interested in other mortgage products such as second mortgages or home equity loans, I can help. Call me today for an appointment.

What is the difference between a home equity loan and a second mortgage? 

 

Home equity loans and second mortgages are both types of loans that use your home as collateral. As a result, many people are confused about the difference between the two and may even think they are the same thing. The truth is however, that they are two different types of loans and to understand which option is better for you, you need to understand the difference. 

Home Equity Line of Credit

A home equity loan – or home equity line of credit – is a revolving loan. Your lender will approve you for a specific amount (based on how much equity you have in your home) which you can then borrow from and pay back as often as you wish without having to apply for a new loan. The amount that you have to pay back each month will be determined by how much you currently have borrowed.

Second Mortgage

The amount that you can borrow with a second mortgage is also determined by how much equity you have in your home. This type of loan is paid out as one lump sum, and the borrower must make regular payments. The interest on a second mortgage is higher than the interest of a first mortgage because lenders generally consider this a riskier investment. Nevertheless, the interest on second mortgages is still much lower than other types of credit. 

Which Option is Best for Me?

Whether you choose a home equity loan or a second mortgage really is going to depend on your needs. If the loan is to satisfy a one-time need (such as a home renovation), then a second mortgage may be the better choice. If you have a recurring need for the money, then a home equity line of credit might make more sense. 

With either option, the main requirement is that you have sufficient equity in your home to borrow from. Remember though, that since you are borrowing against your home you must be sure that you will be able to make the payments. Otherwise, you could risk losing your home. 

If you are considering either of these options, you should contact your mortgage broker who can analyse your situation and make a recommendation that suits your needs.

Are you interested in learning more about home equity loans and second mortgages? If so, contact me today to set up an appointment. 

How long does it take for a home equity loan to be approved in Brampton?

Getting a home equity loan, can be a good way to access cash from your home equity when you need it. But many of our customers want to know how long the process will take. The good news is that it doesn’t take long. Depending on the complexity, a home equity loan usually takes between a few short days up to a few short weeks from the time of application to approval with cash in hand.

What is a home equity loan?

Also called a home equity line of credit or HELOC, a home equity loan is a revolving loan that you can continually borrow from and pay back (as long as you do not exceed the maximum approved loan at any one time). The amount that you have to pay back each month will depend on how much you currently have borrowed.

What happens when you apply for a home equity loan?

A number of documents will be required when you apply for a home equity loan including financial documents, how much money you still have owing on your mortgage, as well as a valuation of the property. Because the loan is based on how much equity you have in your home, it may be necessary for you to get a home appraisal before the loan can be approved.
Once the loan underwriter is satisfied that you have met all the conditions of the loan, the approval can go through quite quickly.

Why do people get home equity loans?

Home equity loans can be used for a number of purposes ranging from home renovation projects and renovation to consolidating high interest debt. The advantage of a home equity loan is that they have being fairly low interest compared to other types of loans. Because the loan is based on how much equity you have in your home, you don’t need to have perfect credit to qualify. Furthermore because it is a revolving loan, you only have to be approved once. Once you are approved for the loan, there will always be money to borrow provided that you have not at the time over the borrowing limit.

If you are interested in learning more about home equity loans, or if you would like to apply for one, contact me today. I would be happy to take you through the process and answer any questions you may have.

Is it a Good Idea to Refinance Your Mortgage?

Mortgage refinancing is a common strategy that Canadians use to lower their interest payments,
consolidate their debt, save money, or access their home equity. But is it really a good idea? The answer
is, that it depends on a few factors. Refinancing could save you a lot of money over time, but then again
it might not. Or there may be other mortgage strategies that make more sense in your situation.
Do determine whether mortgage refinancing is a good idea for you, you should sit down with your
mortgage broker and let them calculate a few scenarios for you. In general though, here are a few of the
factors you will need to look at in making your decision.
How much interest can I save?
If interest rates have fallen since you applied for your current mortgage, then refinancing could save you
thousands of dollars over the time you own your home. And if you are using your mortgage refinance to
consolidate high-interest debt, then the savings will be even more substantial.
How much of a penalty will I pay?
In order to refinance your mortgage, you will have to break your current mortgage early which usually
means you will have to pay a penalty. The farther away you are from your renewal date, the higher that
penalty will be. If you are close to your renewal date, refinancing may make sense. If you recently
renewed your mortgage, then another strategy such as a second mortgage may be a better option for
you.
How disciplined am I?
If you are using mortgage refinancing to consolidate debt, then it is important that you can be
disciplined enough not to run up your credit cards or line of credit again. If you do, you could be in a
worse situation than before you refinanced. Consider putting a budget together to see if refinancing can
really be the start of a long-term solution for you or if you should be seeking out other financial
counselling.
If you think mortgage refinancing might be for you, you should sit down with an experience mortgage
broker to help you make your decision. To schedule a consultation, contact my office today!

How Does a Private Mortgage Work in Brampton?

Homeownership is a source of pride among many Canadians. But what do you do when your ability to
purchase or stay in your home is compromised by overloaded debt or poor credit? Sometimes the
answer is to go to a private lender for your mortgage.
Historically, only about 4-5% of the mortgages in Canada have been held by private lenders, but as new
federal regulations have made borrowing tougher, we have seen this number start to rise.
Usually, a private mortgage is an interest only loan. Keep in mind however, that private lenders take
bigger risks and must therefore usually charge higher interest rates to compensate for those risks. Since
you will not want to have to pay those higher rates for too long a time period, it is best to consider a
private mortgage as a short-term solution and have a plan to build up you credit over the next few years
so that you can transition to a mortgage from a conventional lender.
Still however, there are times when obtaining a mortgage from a private lender make sense. These
include:

• If you cannot get a mortgage from a traditional lender due to little or poor credit.
• If you are self-employed and cannot prove your income.
• If you are a non-resident of Canada.
• If you are in property or income tax arrears and are in danger of being foreclosed on.
• If you are seeking a mortgage on a tiny home, micro condo or mobile home. (Most banks will not
provide mortgages on spaces that are less than 600 square feet).
• If the mortgage that you are seeking is a second mortgage or a mortgage on an investment property.
Private lenders can provide a good solution for those unable to obtain a loan through a bank or another
traditional lender. Usually, private mortgages do not require as much documentation and the approval
process is more flexible. In order to qualify, you usually only require either a large enough down
payment or sufficient equity in your home.
If you are interested in learning more about private mortgages, or applying for one then contact me
today!

Why You Should Hire a Mortgage Broker in Brampton?

If you are thinking about buying a home, one of the first things that you will need to do is get pre-
approved for a mortgage. You could just call your bank and see what they are willing to offer you but a
better idea is to hire a mortgage broker and get access to the best mortgagee options on the market.
Here are just a few of the reasons why you should hire a mortgage broker:
They work with many different lenders
If you contact your bank for a mortgage, you have essentially limited yourself to one lender and there is
no competition. But a mortgage broker works with dozens of lenders and they can shop around to help
ensure that you get the best rate and terms for your situation.
They can negotiate on your behalf
Especially if this is your first mortgage, it can feel intimidating to ask a lender to give you a better rate
than the one they have posted. Mortgage brokers however never feel intimidated about asking for a
better rate if they know they can get you one. They have long-term relationships with the lenders that
they work with and know when it is possible to get you a better deal.
Mortgage brokers can help with speciality mortgages
It is not always easy to get approved for a mortgage. People who have poor credit, are self-employed, or
new to the country may very well find themselves turned down for a mortgage when they apply for one
with a traditional lender.
Mortgage brokers however have connections with speciality lenders who serve clientele that the big
banks just can’t. If you’ve been turned down for a mortgage by your financial institution, then it may be
time to hire a mortgage broker.
Gain access to the equity in your home
Mortgage brokers aren’t just for people who are looking to purchase a home – they are also for people
who already own homes and who are looking to access their home’s equity. By hiring a mortgage
broker, you can gain access to the equity in your home through a number of different strategies
including refinancing, second mortgages, HELOCs and reverse mortgages. Your broker can review you
situation and provide you with the strategy that makes the most sense for you.
If you are ready to take advantage of these and another benefits by hiring a mortgage broker, then
contact me today for a consultation!

How Can a Second Mortgage Improve Your Credit Score?

When you think about ways to improve your credit score, getting a second mortgage might not be the first thought that comes to your mind, but did you know there are ways that a second mortgage can actually help you with your credit?
It’s true. Whenever you get new credit and are consistent with making your payments, it helps to improve your score. But if you credit card debt becomes too much then it might become difficult to keep up with the payments, which can harm your credit score. This is where a second mortgage can help you can get out debt faster and help improve your credit score.
If you have high-interest debt such as credit cards or payday loans, it can feel like it is almost impossible to pay off. Second mortgages however are typically much lower interest than credit cards or payday loans, which can help you with consolidating your high interest debt. A second mortgage can help you dramatically lower your interest on your outstanding debts and free up cash flow – meaning that if you continue to make the same debt payments each month and a lower amount.
Again as you stay consistent with the payments on your second mortgage and you lower your amount of total debt, you will see your credit score begin to improve.
How can I get a second mortgage when my credit is poor?
One of the great things about second mortgages is that you don’t need to have perfect credit in order to get one. In fact, you don’t even need to have good credit. The only real criteria for getting a second mortgage is that you have sufficient equity in your home. This makes it an excellent tool for improving your credit.
Are there any drawbacks to getting a second mortgage?
When you get a second mortgage, you are getting a loan and using your home as collateral. This means that if you do not make your payments, you are putting your home at risk. It is therefore very important that if you decide to use a second mortgage to help you get out of debt that you remain committed to the process and that you do not go back and rack up even more consumer debt.
It is always recommended that if you do get a second mortgage, you sit down with a professional mortgage broker who can help you decide whether it is the right solution for you.
Contact us today.
If you would like more information on getting a second mortgage, contact Rumy Gill – Brampton Mortgage Broker today!