The Blog - John Chan Mortgages

A Quick Update on Alternative Lending in Canada

Grow, which was originally called Grouplend, has now exited the peer-to-peer lending space. Instead it is offering its technology to financial institutions that want to analyze loan applications and offer a more efficient loan process. Previously Grow was the only peer-to-peer lender that was offering a credit check that did not affect the credit score. Now Borrowell and Amber Financial both offer a “soft” credit check that will not hurt your credit score during the initial application process. Lending Loop has just worked out their issues with the provincial regulators and is back online connecting people who want to invest in businesses and the businesses that want to borrow money. However, if you are a start-up, you are still out of luck because they only

October 28, 2016 No Comments

An Update on Alternative Lenders in Canada

There is another entrant to the peer-to-peer small business lending space. The name is Lendified and it seems to focus on smaller businesses then the Lending Loop and On Deck Canada. The loan size is between $5,000 to $35,000. They offer terms of 3 to 12 months. Interest rate range is 5.99% – 24.99% Minimum 6 month in business with 50K in annualized revenue. Minimum personal credit score of 600 Origination fee of 1.5 to 3.5% of the loan. For more information you can visit their website at www.lendified.com Lending Loop focuses on larger loans but are currently having regulatory difficulties and can no longer lend out investor money until it is resolved. Currently they are using their own funds to fund the loans. Grouplend

April 1, 2016 No Comments

How Credit Card Incentive Programs can Negatively Affect Your Credit

In an effort to promote the use of their credit cards, companies offer all sorts of incentives. It can be cash back, points/loyalty programs, Air Miles and other travel reward programs. While enticing, there can be a down side. In trying to take advantage of all the benefits the cards are offering, some consumer apply for too many credit cards. Depending on the frequency of the applications, it can lower your credit score, as each application will result in a credit inquiry. Also lenders may view this as a scenario for possible irresponsible use of credit. However, this is not the worse scenario. Some families will have one primary card and have everyone else added as authorized users. This will pool the points and benefits

February 10, 2016 No Comments

Lending Loop: Another Peer-to-Peer Lender for Small Businesses Enters the Canadian Market

This fall, Lending Loop, a new peer-to-peer lender for small business loans opened its cyber doors for business. Though not the first peer-to-peer lender in Canada, though that is what they claim on its blog, it is the first peer-to-peer lender that allows the average Canadian to invest in small business loans. Up to this point, the Canadian regulatory systems have forced other p2p lenders to open it platforms only to accredited investors and institutional investors. So through Lending Loop the average Canadian can invest in small business loans. Once an account is open and funded, the investor can review loans that have been vetted by Lending Loop and placed into their risk categories. An investor can pledge a minimum of $50 to any one

December 28, 2015 No Comments

Debt Consolidation and the Home Equity Loan

Unfortunately debt consolidation has a close association with the holiday season. It is that time of year where controlling spending is often very difficult. So what often happens is that people look for a home equity loan after the holiday season to consolidate their debt. Credit card interest rates are often 20% or more while a second mortgage would be around the 8 to 10% range. Sounds like a no-brainer, but it is not that simple. Because there are lender fees, legal fees and appraisals, the upfront cost is $3000 and up. So the amount you save must also make up for the upfront costs. If your balance is small, then it often does not make sense. You also need a plan to pay off

December 23, 2015 No Comments

When a Private Mortgage is Cheap!

A few months back a gentleman inquired about a small private mortgage. It was for $20,000. This is an amount where you really question whether it is worthwhile because there are minimum costs involved. No matter how little you borrow, the amount of administrative work is the same. So in general, even for such a small amount the minimum lender fee is $2000. The legal fee would be around $1500 and you would need an appraisal that is around $300. So before you even talk about interest costs, you are paying out $3800 in costs. That is 19% of the $20,000. You really have to need this money to justify the costs. All I know is that he needs this money to pay off some

November 25, 2015 No Comments

Payday Loans in Canada

I hate payday loans. I think they are a burden to society because they prey on the poor and the uninformed. The Globe and Mail has an excellent but lengthy article on payday loans in Canada. The link is provided after my summary. Also there is a link to a video from John Oliver who gave a comedic rant about payday loans in the US. It is quite insightful. The article is saying that more and more people are using payday loans. A major credit-counselling agency is seeing more clients walking through the door with payday loans needing help. This is especially true for seniors. 45% of their clients over the age of 60 are holding payday loans in 2014. It was 20 per cent

August 12, 2015 No Comments

How to Decide Which Credit Cards to Cancel

I just came across an article in the LA Times that has the title “What happens if you close an unused credit card account? The article basically says keep the number of cards that you have to a minimum and that you should close card accounts that you do not use. Two cards should be enough. You might take a small hit on your credit temporarily but it should recover in a month or so. There is nothing wrong with the suggestions, but it is more complicated than that. Depending on how irresponsible you are with credit, you might need to cancel them all. The advice here is for responsible credit users and sets you up in the best possible light in most situations. First

June 21, 2015 No Comments

Does Multiple Credit Checks Affect Your Credit Score?

There is a lot of confusion about the way multiple credit checks affect your credit rating. Not just amongst the general public but also people in the industry. I have spoken to mortgage lenders, mortgage brokers, leasing specialists and car loan professionals. And they have different answers to this question. Luckily I was able to speak with a regional manager at Equifax at a recent lender/broker event to clear this up. With recent technology implemented, Equifax now should know if the credit check is for a mortgage or a credit card. For mortgage inquiries, checks within a period of 1 to 4 months are counted as one. The time depends on which Equifax credit score you are talking about. Equifax have several versions of their

June 2, 2015 No Comments