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Even though you may qualify at one of the big banks, there are reasons you should get your mortgage elsewhere. In this article we are going to cover a few of them. The number one reason is the payout penalty. The big banks have higher payout penalties. Most lending institution uses the higher of 3-month interests or the interest rate differential (IRD). Each of the big banks has their own IRD formula, but in general they take advantage of the posted rates and the rate they gave you to maximize their profits. They call the difference between the rate you got and the posted rate at the time, the discount. They apply this discount to the remaining term of the mortgage when you decide to

Merchant cash advance, also known as credit card receipt advance, is actually not a loan. A company is buying your future credit and debit card transactions at a discount. They advance you the money upfront and then takes a percentage of your daily credit and debit transactions until the amount owed is paid off. If you have a slow month, you’ll end up paying less. So there is no actual interest rate, no time limit and no fixed payments to speak of. A key advantage of these types of advances is that no collateral are required. So for a business owner without any equity in a property, sometimes this is the only way to get the money they need. And this is why merchant cash

Let’s say you want to build a house and sell it for profit. You go to the bank and they reject your application. There are a million and one reasons why they would do so. The obvious ones are bad credit, insufficient income to service the loan and not enough initial capital. They can also reject you based on your lack of experience as a builder. Or they may have a more conservative policy and not allow you to borrow enough. But regardless, is going to a private lender for a construction loan a good idea? Is this good debt? Well, let’s take a look at the numbers. Let’s assume you want to build a house in East Vancouver. The lot is $1,000,000. You want

Recently, the media has repeatedly mentioned that Canadians are in too much debt. However, I feel that it is important to clarify which kind of debt you have. I would like to propose 3 categories: bad, necessary and good. Usually bad debts are things or expenses that you do not need to have right away. Incurring debt to buy things you don’t have to have is bad. A new pair of shoes, ski equipment or a vacation can fall into this category. Necessary debt are things you have to have, but unfortunately do not have money to pay for it at the time. For example, you need dental work done due to a cavity. You really can’t wait, and you definitely need this. Paying this

Some may think of payday loans as just another alternative lending method. Well, it is a dangerous last resort. The cost of the loan is so high, that some people are trapped into a cycle of debt. For example, you might have seen a TV ad for a payday loan company that was offering a discount “20 to the dollar”, like it was a great deal. Let’s pack up the neighbours and let’s all get one. Well after the one time discount, they charge $23 for each $100 you borrow for a two week period. $23 out of $100. Well, that is 23%. People complain about VISA charging 20% interest. But wait. VISA charges you 20% per year. These payday loan services charges you 23%

Recently there is an article in the Globe and Mail that spoke about how bank mortgage reps are not regulated like the independent mortgage brokers, who are overseen by a provincial regulator. Their competency requirements, their suitability of mortgage recommendations and compensation disclosures are all decided by the banks that employ them. It mentions that RBC has arrangements with other lenders. When a loan does not fit their guidelines, the deal is sent to their partners. There is nothing wrong with that. In fact, I think this is good service. There are banks that just says “sorry” and walks you out the door. At least RBC tries to help. However, now that you know about AlternativeLending.Ca, you have a better alternative. We have access to

Here are a couple of recent extreme examples of what private lending can do. 1) Client has poor credit rating with debt gone to collection agency, repossessed car, over 10K in unpaid taxes and behind in both first and second mortgages. The mortgages were called by the bank and sent to the lawyers to start the foreclosure process. Private lenders were able to come to the rescue with a first and a second mortgage while lowering the monthly payments by almost $1000. 2) Applicant looking to purchase rental revenue property with zero down payment by using the equity in the primary residence. However, the applicant only has a disability pension income and weak credit. The applicant already owns another rental property. The condition of both