What happens when you can’t afford real estate? What do you do when you can’t get the financing that you desperately need for your home closing?
Martin recently spoke about real estate issues facing folks in Toronto with Ryan Coyle in the heart of Liberty Village. Ryan is an expert real estate broker with The Condo Store in Toronto and he’s been a presence in the Toronto real estate scene for over ten years, acting as a Broker since 2004.
Keep on reading if you want to know more about solving your last-minute financing problems for that real estate purchase…
Imagine this scenario…
You put down you 20% for your pre-construction condo. You waited a few years and the property is finally ready to close. You were contacted by the builder and were informed that you need the financing to close the home. There’s just one problem. Your pre-approval from many years ago isn’t valid. The mortgage rules have changed. You suddenly can’t get a mortgage approval to close your own condo. You’re stuck scrambling. You don’t know what to do.
Chances are that you’ve been renting these past few years as you waited for your condo to get built. You’re fed up with paying the expensive fees.
According to this article on CityNews, rents have skyrocketed in Toronto. Take a look at this statistic from the article:
“47: Percentage of Toronto households that are renters (The number is growing.).
47: Percentage of Toronto renters who spend more than 30 per cent of their income on housing.”
If you’re paying rent, the odds are that a great portion of your income is going towards your living expenses. Now that you want to finally move into your property, you’re finding out that you don’t qualify for a mortgage.
What happens when you can’t find financing for your home?
You either give up on the idea of home ownership or you find alternatives for the financing. On short notice, it may be extremely challenging to find someone to loan you the money that you need to close your property. This could leave you in a difficult financial position.
You already went through the process once when you were pre-approved for the condo. You already put the time and effort in. Now you can’t get the financing that you need.
The absolute worst case scenario is that you lose your deposit. This could be as high as $80,000. I don’t know about you, but that’s a lot of money to lose.
How can you afford this home? How do you obtain financing?
There are ways to make owning a property more realistic even when things are looking gloom.
Ryan is launching 1 Day Money, an equity-based private lender organization that lends (provides loans) based ONLY on the equity in the property vs. the individual applying for financing which is the focus of other funding agencies.
What services are offered?
“We lend money based on the equity in a property, quickly, (a one- day mortgage) or we buy you out by paying you back your down-payment and some profit. We execute a one-day assignment which allows us to appraise a property quickly and secure your loan or an assignment sale in just one day.”
Why’s Ryan offering this service?
“Traditional mortgage loans and financing can be complicated and entail unfair terms. This often leaves people without financing at the last minute. We started 1 Day Money to offer people quick solution for receiving a fast loan before the closing date. We knew that the market needed a private lender that was able to approve and fund a deal within one business day, which is why we created a unique investment structure for a home and mortgage loan company.”
How does this last-minute funding process work for your real estate purchase?
“Our goal at One Day Money is to help people get out of a stressful financial situation as quickly and fairly as possible. To do this, we’ve made the lending process incredibly simple. One Day Mortgage consists of two parts, each designed to make sure at the end of it you don’t have any financials stress. The best part is that because we know you’re strapped for cash, we don’t charge a monthly fee. Instead, we just add it to the principle, so it gets repaid at the end of the term. We charge 4.5% for the term with no lender fees or other hidden costs. There will be legal fees and disbursements from your lawyer, but you know our costs up front. There’s a $500 Refundable Application fee.”
Ryan Coyle stressed this is a short-term solution so people can refinance their property with a major bank at a much lower rate. Banks don’t look at the equity in a pre-construction condo but will look at it on an existing property, making it much easier now for them to get traditional financing. If they are not able to get it, then Ryan’s company will buy them out.
The buy out will likely be your last option as the chances are that you want to move into this property. You already saved up to be a homeowner and you don’t want to return to renting.
Question & Answer time with Ryan.
What cities do you work in (offer your services in?)
Currently, 1 Day Money is based in Toronto and services surrounding areas like (such as) Mississauga, Vaughan, Brampton, Etobicoke, and Hamilton.
What does 1 Day Money lend on (provide loans for)?
Currently we are focused on condos and real estate in general. Our current focus is on pre-construction condos where buyers have significant equity but often can’t qualify under the new mortgage rules and because banks don’t look at the equity in a pre-construction condo.
How can you fund a deal in 1 Day?
As a private lender, we are built for speed (and providing fast loans). With over two decades of experience, we can decide in minutes if a deal makes sense.
What happens if I cannot refinance with a major bank?
If this occurs, we will buy the property from you at a pre-negotiated price. The price is designed to keep as much of your equity as possible while making sure there is enough room for us to resell and cover all the costs and make a small return. There will not be a long, drawn out power of sales process and you will know exactly how much of your equity you get to keep. Additionally, there will be no damage to your credit.
What is Equity?
When we talk about equity in a deal, we are referring to the difference between the value of the property and the loan amount. We need a minimum 80% loan to value to proceed with a deal.
What if I just want to be bought out?
We can make you a buyout offer immediately. We call this a 1 Day Assignment and we can give you a firm buyout offer within a day.
Is One Day Money a mortgage broker?
No, we are a private lender. We have a large network of mortgage brokers that we work with.
Stay tuned for more real estate related articles if you’re looking to start investing into real estate.