Ever since the collapse of the housing market in 2008 and 2009, investors have been looking for opportunities to take advantage of depressed prices. Because of rock bottom interest rates, those with the wherewithal to secure financing have done so, but not everyone is aware of the many opportunities there are to find investment properties in the North. This is where VancouverMortgages.NET can help, as our expertise in helping you structure loans and our connections within the banking industry have been instrumental in finding many of our clients the financing they need, so that they can turn properties into profitable, quick sales or longer term rental properties.
Several different strategies exist for helping our investors find the mortgages they need for properties in places like Kitimat, Prince George and Fort St. John. One is the private mortgage, which provides quicker funding of loans with less scrutiny of financials in exchange for a shorter mortgage term and a higher interest rate. Private lenders will generally lend up to 80 percent of the property Loan to Value (LTV), but they expect to have the loan satisfied within six months to a year (with two years generally being the absolute maximum), and the rate for a private loan will be several points higher than a traditional loan, with options of both an interest-only or principle and interest payments.
Another strategy is taking equity out on your primary residence in order to pay for an investment property, either through increasing your first mortgage to 80% LTV, or obtaining a second or third mortgage as a Home Equity Line of Credit (HELOC) for interest only payments. If you have enough equity on the first loan and you have maintained excellent credit (and your income justifies it), a broker may easily refinance your home with a traditional lender at best rates, and will add the additional funds to your portfolio, seeing it as a valid risk, and you then have access to the funds you need to buy the investment property.
A third strategy involves taking out a blanket (or inter alia) loan. This sort of financing pays for multiple properties at once and is attractive to banks because now there are multiple forms of collateral on the loan. This keeps you from having to take out multiple loans to finance a larger investment strategy involving multiple properties. We have the contacts for Kitimat in order to connect you with the right lender for your borrowing needs.
The final strategy is if you have funds sitting around in a cash account, the time is right to think about moving into real estate investment in northern BC with a minimum down payment.
While interest rates are still at historically low levels, they are only going to start heading upward, as the American Federal Reserve tapers back on buying up risky mortgages from banks, and prices are going to continue the rising trend with Canada to follow suit shortly. This means that the cost of investing in real estate is only going to continue to climb, so the earlier you get in on the market, the greater your ultimate profits will be. Plenty of properties are available within northern BC, so there is no time like the present for adding real estate to your portfolio. Get in touch with one of our lending professionals at VancouverMortgages.NET to get an evaluation of your own situation.Read More »