Financial News & Information.

The most important investment you will ever make is buying a home. This is because it shelters you, it protects you, and it does take quite the bite out of your wallet. It is quite the incredible investment, but one that will benefit you for the rest of your life. However, you have to choose the right mortgage for you. This means choosing the right Canadian Mortgage Broker or Lender, and looking at the many aspects that can make or break you.

So here are 5 tips to help you choose the right mortgage for you:

- You first have to choose your financial institution. You may already have an institution in mind. If you do, make sure you check with them regarding their closing costs, application fees, inspection fees, and any other charges that they may add. Every institution is different and so are the mortgage rates carried by each institution.

- Always compare interest rates. You have your base Canada mortgage rates, but each financial institution will have different criteria that determine your rate. They do base it off of your credit situation, amount of the loan, income, etc.

- You have to decide whether an adjustable rate mortgage or a fixed rate mortgage is the best for you. In an adjustable rate mortgage, the rate will change over time. This means you will have a lower payment in the beginning, but the payment will be higher in the end. You have to determine if this is something that you can afford to do. Some individuals cannot afford this, so they may lose their home if they default on their mortgage.

- Are you a first time homebuyer? Look into the options that are available to those buying for the very first time. There are certain deals that can be offered regardless of credit rating in many cases.

- If mortgage refinancing is what you need to do, then you should use the above tips when finding the right mortgage. When you refinance, you are usually doing it so that you can take advantage of some of the equity that you have built over time. You refinance for the value of your home, pay off your old mortgage, and you then get the difference in your equity back to do what you wish with. Just make sure that you are making the right decision and keep in mind that Canada mortgage rates can vary from institution to institution, even in mortgage refinancing.

These are all very important things to keep in mind when getting your new Canadian mortgage or in mortgage refinancing Canada. You want to ensure that you are doing everything right from the beginning. That way you can make sure you have your home for many years to come. You don’t want to be one of these individuals taking out the variable rate mortgage for the low payment to find that they can’t pay it in the future. It is a rather disheartening situation. It also takes a toll on credit, on reputation, and leaves you wondering where you are going to live when the bank takes possession of the home.

So make sure you compare, you weigh your options, and that you feel good about your decision. You might be quite surprised how right your gut feeling can be about the mortgage you are looking at. If you don’t feel good about it, then don’t take it. And don’t forget that the Canada mortgage rates are not the same everywhere. This can be a huge determining factor when it comes to your mortgage.

The subprime meltdown and the subsequent credit crunch have completely transformed the US mortgage industry.

The previous dozen years of mortgage options and financial bliss have become a memory, with every liberal mortgage program no longer available. The remaining mortgage products are quite unlike the guidelines from the past few years. Now…they require full documentation of income, strong credit, and actually proving you have a job! It’s no stretch to say that common-sense has returned to the mortgage world.

Post Mortgage Meltdown:

Before the financial crisis that destroyed the mortgage market, 100% financing loan programs were availalable to all. The only real requirement that existing in those days, were that you prove you were a US citizen. (non-citizens could only get 90% financing!). With credit scores in the high 500’s, you could still obtain 100% loan financing. In November 2008, only USDA and VA loans offer 100% financing. FHA loans have removed their option to allow the seller to gift 3% to the buyer, so they are now capped at 97%. Fannie Mae and Freddie Mac offer 97% options, but no 100% programs at all. If anyone tells you differently, they are giving you bad information.

The Alternative A credit market, also known as Alt-A loans, which used to offer very appealing niche loan financing products catering to borrowers with credit scores from 660 and up are also gone. These lenders offered loan programs to borrowers with scores down to 620. Aggressive programs, such as 100% no doc financing, were typically not available to borrowers below a 660 middle score. Today, even these seemingly viable products made to very strong borrowers have dried up. They were a victim of the global mortgage chaos that devoured the sub-prime banks and saw even the big 3 Automobile companies suffering and on the verge of collapse. Alt-A lenders had very liberal DTI ratios, reduced and even no income documentations, and the ability to turn any loan into an interest-only mortgage!

Leading Alt-A lenders included GreenPoint, SunTrust, Lehman/Aurora, and First Horizon. Beyond these market leaders, there were hundreds and hundreds of small niche banks and mortgage companies that arose to fulfill the demand for certain niches. Almost all of these lenders are now out of business, and the ones remaining have removed all Alt-A products from their product line. The big loser with these products drying up are the small business owner with great assets and credit, but income “reduced” through their desire to reduce taxes.

Where are we now? Or…after the 2008 collapse of the US mortgage market:

As 2008 ends, hundred and hundreds of banks are closed operations. The aggressive loan options that arose over the past decade are now gone, and more than likely will never return. The credit crunch is making it even tougher for average customers seeking home loans to get a loan. FHA is king again, as the only program that lenders are comfortably loaning money towards is the hallmark of the mortgage business — the FHA loan from the Department of Housing and Urban Development. Credit score requirements are now in the low 700’s, where before a 680 was sufficient. Cash-out refinance mortgages on single family homes are very hard to get, and for many people, impossible. HELOC’s are being reduced for millions of customers. Additionally, investor loan financing is extremely hard to obtain, no matter how strong the client.

As 2008 comes to an end, mortgages are still very difficult to obtain. Fannie Mae and Freddie Mac have imposed stricter guidelines effective December 1st, 2008, that will further restrict the ability to obtain residential mortgages for most of us. There are tighter restrictions on the number of properties owned, more stringent credit requirements, and additional restrictions for borrowers who have had a past BK or foreclosure.

Thinking of getting construction equipment financing? If you look at it carefully, there are two options. You either lease or you buy the equipment outright with a loan. A construction equipment owner has to consider both options, both of which have benefits and drawbacks.

Construction Equipment Bought Utilizing a Business Loan

Construction equipment does it become obsolete like a lot of other types of collateral investments that a business will take on. For years, bulldozers, backhoes, and other construction equipment have endured. You don’t see a lot of changes in this type of equipment because it is a time-tested technology. When maintained properly, it will last for years for the construction company owner.

Also once the business loan is paid off, the business owns the equipment. The business gains collateral as it builds accrued equity. This can be very valuable for future financing on the business credit. Equity built used in the collateral gained can be used to obtain working capital in the future. However, we have found that unsecured lines of credit offered the small business person all the extra working capital they need, with requiring collateral. Furthermore, the equipment that is bought can be counted on taxes as depreciation.

The Benefits of a Leasing Construction Equipment

Tax benefits is the number one reason that business owners generally lease construction equipment. This is especially true in terms of what is called a “true lease”, where you get a 100% deduction.

The thing about a true release is that the business owner can claim the entire lease payment off on business taxes, To qualify for this status, the equipment must be declared at fault fair market value at the leases end. While all this sounds complicated, it really isn’t. We do, however, recommend consulting with a professional tax consultant for more information on the ramifications of the tax benefits of leasing.

The fact that you can often get the equipment that you need without any down payment is one of the primary benefits to some. Businesses, like start-ups, that are not flush with cash love this aspect if they can find it. Lease payments are typically fixed for the term of the lease and give the business owner a good idea what to budget.

Choose The Best Route For Your Construction Business

Whatever option you go for, you need to consider where you need to put the money, the long term effects, how much you will save in terms of tax breaks and more. Plan ahead, and you will do fine with your construction business!