The Blog - John Chan Mortgages

Private Lenders that Launder Money?

Through some fine investigative work by the Globe and Mail, I was made aware that there are another type of private lenders operating in BC. Click here for Globe and Mail’s story. Unfortunately, these are nefarious characters and will cast a shadow on the rest of the legitimate operators. So, I would like to clarify the differences between these operations. The operations highlighted by the Globe and Mail are “private lenders” who lend out their money to launder dirty money. They charge interest rates from 40% to 120%. 60% is the legal maximum allowed by the Tax Act. Legitimate private lenders charge interest rates that are much lower. Usually between 5% to 14%. These questionable operators mainly target non-residences with limited access to money outside

March 7, 2018 No Comments

January Real Estate Review

The January Metro Vancouver real estate stats has not break from pattern. Continued strength for condos and townhouses, while detached homes are in a more balanced market. Good condo units are getting multiple offers. Faced with the reality of extreme pricing in the lower mainland more and more people are moving in to the Fraser Valley. In fact Maple Ridge and Mission are where the action is at! According to Re/Max the sale-to-active listing ratio for the two weeks ending Feb 2nd for East Vancouver and Burnaby are 7% and 12% respectively; while it is 26% for both Maple Ridge and Mission. And if you are once again pondering the reasons behind the price movement in the local real estate market, there has been some

February 21, 2018 No Comments

An Introduction to Reverse Mortgages

Happy to report that we are certified for reverse mortgages through CHIP. It is another tool for alternative lending that the banks do not have. This product is not for everybody but it is a perfect solution for certain seniors. You need to talk to someone familiar with this product to make an intelligent decision on it. A majority of the information on the internet refers to the products in the United States. It is not the same here. It is much better in Canada. We were not quite onboard with this product at first until we saw this graph. Basically, it shows a 1 million dollar house with a $350,000 reverse mortgage (orange) at 5.84% interest rate. The interest accumulated is in blue. And

February 14, 2018 No Comments

Before you get a payday loan, consider this.

Consider these tips before getting a payday loan. Check at your local credit union or bank to see if you qualify for a personal loan. You never know until you ask. If the amount you owe is greater than $40,000 and you have a property, you might be able to clean up your financial situation with a home equity loan. Often payday loan is a debt trap. Between 50 to 75% of the loans are repeat loans. Fees quickly add up. In a study in the states 41% of borrowers needed a cash infusion to pay off a payday loan. So borrow from your friends or family first, because you’ll end up borrowing from them anyways. If you do it first you will actually need

September 18, 2017 No Comments

Shadow Banking Part II – Should We be Concerned with Unregulated Sub-prime lending?

Because of the confusion around terminology and the lack of comprehensive data, it will take a bit of explaining before we can come to a conclusion on whether sub-prime lending is a problem. In our previous article, we determined that shadow banking and sub prime mortgage lending are very different. Shadow banking cover a large area of financing outside of banking that most people find acceptable such as credit unions, pension funds, trust companies and mutual fund companies. Sub-prime mortgage lending is only a very small part of it. So, what is “sub prime lending”? Some say it is lending to people who may have problems maintaining the repayment schedule. Then sub-prime mortgage must be lending to people who may not be able to pay

July 4, 2017 No Comments

What is Shadow Banking in Canada?

The term shadow banking has been applied to the Canadian mortgage landscape lately as house prices in Vancouver and Toronto soars and mortgages are more difficult to obtain due to the government’s attempt at slowing the market. It has been thrown around haphazardly and gives a perception that mortgage lending in this area is a large hidden unregulated system that can bring the economy down or at least do great harm. One article mentions how new rules will push more people to borrow through mortgage investment corporation which is the most remote corners of Canada’s shadow banking sector accounting for 40% of Canada’s banking space. Now when you add headlines such as “Subprime Lending, Which Wrecked U.S. Economy, Becoming A Problem In Canada” and “Subprime

November 14, 2016 No Comments

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