What to do if your Landlord wants to evict you

As a renter, an eviction notice can threaten your lifestyle. Before something like this can even happen, you should always have a fall back plan. First, prevention is the best medicine. Always throughly check your landlord in terms of his character and his conditions to renting the apartment. Is your landlord trsutworthy and reliable? How long does the landlord intend to rent?

Second, make sure you are aware of the procedure for eviction.

For example, in Ontario,

1. If the Rental Apartment meets the conditions with the Ontario Tenant Act, then

If the rental property is on a weekly or daily tenancy, then the termination notice must be given atleast 28 days prior to the termination date and the termination date must be the last day of the rental period.

If the rental property is on monthly tenancy or any other kinds of tenancy, then the termination notice must be given atleast 60 days prior to the termination date and the termination date must be on the last day of the rental period.

If the contract has expired, the tenant can choose to terminate the agreement for any reason.  The landlord CANNOT terminate the agreement for any reason even after the lease has expired. Valid reasons includes a family member is moving into the rental property, the rental property has been sold or landlord needs it for their own use. Landlords often attempt to terminate relationship if they do not like the tenant. However, not liking a tenant is not valid reason for termination. Tenants can claim termination was done in bad faith.

Disputing Termination: Some key points to know
1. After the termination notice, the tenant can still chose to dispute the notice if the tenant believes it was done in bad faith.
2. The landlord cannot take matters in his own hands and change the locks on the rental premises or move the tenant's items out.
3. At the point of dispute, the rental agreement continues as it is. The tenant must continue to provide rent.
4. The landlord can only apply to the Board and the Board will give the landlord a notice of hearing.

Rental Contract: The only condition in the rental contract is that if the rental property meets the Residential Tenancies Act, then the contract cannot violate the Residential Tenancies Act. Other than that, there is no set standard to the rental contract.


2. If the Rental Apartment does not meet the conditions of the Ontario Tenant Act, then Social law applies

If the rental property does not meet the conditions of the Residential Tenancies Act., then Social Law applies. In Social Law, it is matter of common sense and putting everything in writing into the Rental Contract. In Social Law, it is acceptable for the Landlord to lock the rental premises. It is acceptable for the Landlord to move the renter's items. One thing the tenant can do is request to agree to follow the Ontario Residential Tenancy Act. and put it in the Rental Contract. Always make sure you have a rental contract.


Check with your own province to make sure you are aware of all your options.

If you have any questions or concerns about these articles, please comment below...

Bank vs Mortgage Broker - which the better choice?

The short answer simple answer are banks. Bank should be able to offer the lowest rates and they can cover all the initial set up expenses.

One may look at the bank's posted rates wonder how could this possibly be true. The truth is, the banks posted rate is not their best rate. You have to go directly to them and negotiate the rate as well as the initial set up cost. My suggestion, is try several banks before deciding on one. Make sure you obtain interest rate and set up cost. Then, make your decision.

So what value is a mortgage broker, if banks is the better choice? The challenge behind banks is getting approved. A bank is only one lender and can be picky with who they are willing to lend money to.

If you can't get approved by the banks with the best rates, a mortgage broker may be able to help. They have a long list of lenders, both large and small that are more flexible with granting loans. Mortgage brokers should also know how to make you look good. All loans have exceptions to their rules. If the mortgage broker can prove and they should know the best tricks, that you will be able to make payments, then you will get approved. In worst case, a mortgage broker could use a higher interest rate lender to assist you with your mortgage.

Hope that helps!

Scams a mortgage broker uses to get your mortgage

Scams1. Get you, the client, to buy more than you can afford

Mortgage brokers biggest competitors are banks. Simply, mortgage broker cannot offer lower interest rates than banks because mortgage brokers are the middle man looking for commission. They are simply an add on cost. So to weed out the competition, the mortgage broker would encourage you to buy more than you can afford. This ensures the banks will not approve you, thus eliminating the competition. The mortgage broker's advantage is that he can find lender that give high interest rate mortgages where as the banks will not. The broker could justify to you, "House prices always goes up. It is better to buy more and pay the higher interest you will get high appreciation on your more expensive homes." If you believe it, than you would need to use the mortgage broker's services.

Suggestion:

Whether the investment wil make larger returns is a risk you would need to analyze without the assistance of the broker! This was what caused the recession in the United States where many Americans were buying more than they could afford. If you are new to the world of real estate, I would only take the lowest interest rate possible. There is a lot of crooks out there and a lot of mistakes you can make.

2. Never tell you, the client, about the fees a mortgage broker makes you pay

This very common tactic is used everywhere. Make you work as hard as possible, so you have a vested interest and then sneak in the fees like you were already suppose to know. The mortgage broker will first make sure you can get approved. Ask for the necessary information and then, suddenly out of no where, he will ask for your credit card inside one of the approval documents. He won't tell you any other fees, unless if you already know it. Doing so, slowly gets you committed.

 

Suggestion:

Thankfully, if you have read these articles, you will know all the fees it takes get approved. Unfortunately, I ahve not met a mortgage agent honest enough to tell you all the fees before making you work for it.

3. Advertise outrageously low, impossible to approve Mortgage Interest Rates

Mortgage brokers know that to attract clients, they need to have lower than theory competitor's interest rates. One tactic is to offer lower interest rates that can never be approved. I saw one mortgage broker site giving interest rates as low as 1.1% during a time when the standard is 2.15% and the prime rate is 3%. If you were to try and call this broker up, he'll then tell you that interest is no longer available or you didn't qualify or something to that extent. The purpose of getting you to call, is to get information. Now he, the mortgage broker's knows you are looking and he can then attempt to sell you something.

 

Suggestion:

Posting Mortgage interest rates that cannot be approved is downright lying. I simply would not recommend working with liars.

Scams a mortgage broker uses to get your mortgage

Scams1. Get you, the client, to buy more than you can afford

Mortgage brokers biggest competitors are banks. Simply, mortgage broker cannot offer lower interest rates than banks because mortgage brokers are the middle man looking for commission. They are simply an add on cost. So to weed out the competition, the mortgage broker would encourage you to buy more than you can afford. This ensures the banks will not approve you, thus eliminating the competition. The mortgage broker's advantage is that he can find lender that give high interest rate mortgages where as the banks will not. The broker could justify to you, "House prices always goes up. It is better to buy more and pay the higher interest you will get high appreciation on your more expensive homes." If you believe it, than you would need to use the mortgage broker's services.

Suggestion:

Whether the investment wil make larger returns is a risk you would need to analyze without the assistance of the broker! This was what caused the recession in the United States where many Americans were buying more than they could afford. If you are new to the world of real estate, I would only take the lowest interest rate possible. There is a lot of crooks out there and a lot of mistakes you can make.

2. Never tell you, the client, about the fees a mortgage broker makes you pay

This very common tactic is used everywhere. Make you work as hard as possible, so you have a vested interest and then sneak in the fees like you were already suppose to know. The mortgage broker will first make sure you can get approved. Ask for the necessary information and then, suddenly out of no where, he will ask for your credit card inside one of the approval documents. He won't tell you any other fees, unless if you already know it. Doing so, slowly gets you committed.

 

Suggestion:

Thankfully, if you have read these articles, you will know all the fees it takes get approved. Unfortunately, I ahve not met a mortgage agent honest enough to tell you all the fees before making you work for it.

3. Advertise outrageously low, impossible to approve Mortgage Interest Rates

Mortgage brokers know that to attract clients, they need to have lower than theory competitor's interest rates. One tactic is to offer lower interest rates that can never be approved. I saw one mortgage broker site giving interest rates as low as 1.1% during a time when the standard is 2.15% and the prime rate is 3%. If you were to try and call this broker up, he'll then tell you that interest is no longer available or you didn't qualify or something to that extent. The purpose of getting you to call, is to get information. Now he, the mortgage broker's knows you are looking and he can then attempt to sell you something.

 

Suggestion:

Posting Mortgage interest rates that cannot be approved is downright lying. I simply would not recommend working with liars.

Summary, tips and silly things home buyers do

To summarize, your objective should be to look for a reputable lender at the lowest possible interest rate.

Aside from that, your secondary objective should be to get the shortest possible commitment, highest possible prepayment and minimize your mortgage approval cost.

You first need to get some idea as to how much you can get approved for. Mortgage brokers and banks will vary in this case.

Unlike most commission based sales, I do recommend using the Internet to search for mortgage brokers. As long as you know your stuff, there is very little a mortgage broker can do to harm you (unlike Real Estate Agents)

However, I do recommend using banks over mortgage brokers, if you can. Banks are simply more reputable.

If you are new to getting a mortgage, don't fall in the trap of going with a higher interest rate because housing prices will go up. That simply could put you in jeopardy just like the US housing crash of 2009.

Don't aim to starve yourself so you can pay off your mortgage like no going out to dinner or movie for five years. People have thought o these silly ideas, but few if any follow through. They just end up going into debt.

Although you can make smaller commitments like no buying coffee everyday. But these commitments will save you money whether you have mortgage or not. Thus, these saving techniques is really independent of your mortgage. That is, if you couldn't commit to it before your mortgage, you probably wouldn't be able to commit to it after.

Don't aim to pay off your mortgage as quickly as possible if you have other debts or intend to get other debts. Your mortgage interest should be the lowest interest rate compared to any other debt interest. I knew one person who made a huge down payment on her mortgage because she didn't want to make large scheduled payments. But then she bought a car and had to take a out another loan that had an even higher interest rate. She should have just use the down payment to pay off the car loan.

There other ideas that can help you pay off your mortgage like The Smith Manoeuvre. Although I think this idea is dead due the Tax Free Savings Account.

One simple way to set your mortgage payment schedule equivalent to your salary pay day schedule. If you calculate the interest savings of this simple idea, you could save up to five years of interest.

Good luck, hunting!

If you have any other questions or concerns, post them, so I can respond.

Tricks banks use to get your mortgage

 

Background:

Banks, like mortgage brokers, only profit when they sell the loan.

However, although mortgage brokers see banks as their competition, banks don't actually see mortgage brokers as competition. Banks don't compete against mortgage brokers because mortgage brokers are just another medium to give the loans to these lenders. Banks only see other lenders as competition. So to win you over, banks are targeting to compete against other lenders.

 

Tactics

 

1. The posted rate is not the best rate.

Just like a car dealer, the initial price is not their best price. Banks do have limit and they won't reveal it unless if you make an effort to talk to them personally. All banks seem to have some sort of unspoken agreement to not compete against each other online. Thus, online speaking, all banks seem to have similar interest rates which is too high to consider. However, if you meet with the in person, they will then negotiate better rates. You will have to meet with several lenders to get an understanding as to what the best rates you can get. Don't just take the first lender you see.

 

 

2. The prepayment percentage is not their best rate.

Large prepayments don't really hurt the banks. It only prevents them from making more money from the interest. On average, you should be able to get 20% for the prepayment, sometimes 25%. Do not settle for their initial offer which is usually 15%.

 

 

3. Even though it appears to be, the mortgage approval cost is not free.

As stated earlier, the banks posted rate is not their best rate. They will vary the rate depending on how much fees there is to cover up front. So once when they know your situation, they will than change the rate depending on these fees. Banks get discount on these fees, but they are still not free. It will be hidden from within the mortgage interest. What the personal banking officer is looking for is a reaction from you. Whether you are concerned about these fees or not. If you are, they simply hide it by raising the mortgage interest. For your own interest, you should perform the calculation to decide whether to aim for lower interest rate or lower mortgage approval cost.

 

Happy Mortgage Hunting!

P.S. Have a question? Post it below....

How to break out of a mortgage commitment, part 3

 
How to decide whether you should break out of your mortgage:

Deciding to break out of your mortgage can be a complicated and painful task. I have seen many people who are reluctant to pay the penalty fee because it often cost thousands. Yet, it would save them much more if they do break out.

I have also seen many people miscalculate the savings and cost to break out of their current mortgage.

To keep it simple, if your mortgage interest, whether fixed or variable is about 2% higher than the rate you can get approved today including variable, then given today's financial conditions, you should break out of it. For example, if your mortgage interest rate is 4% and the approved lender variable or fixed rate is 2%, then you should break out of it. Using simplified math, a $200 000 mortgage at 4% is around $8000 in interest where at 2% is only $4000 in interest. Doing so, cuts your mortgage interest amount in half each year.

This is a very general rule of thumb and there are always exceptions to these rules that you need address. I do not know your conditions personally, but if you post your situation, I may be able to answer it.

Procedure once you have decided to break out of your mortgage:

The procedure is complicated. First the current lender is reluctant to break out of the mortgage. Thankfully there are laws in Canada that force the lenders to behave. However, you, as the client, need to do your part to make sure all parties are following the process.

Assuming you are breaking out of the mortgage from your current lender and going with another lender...

1. After you have minimized the penalty fee by making the largest prepayment, your new lender should fax a discharge request to the current lender.

2. After this fax, you should contact the current lender and make sure the fax has been received. Often times, lenders fail to receive such fax. (Whether intentionally or accidentally to delay the mortgage exchange process))

3. After the current lender acknowledges the request to discharge has been received, then the current lender has forty-eight hours to respond with the mortgage break out fee, which would be the cost to break out of the mortgage. Often times, lenders would claim they need longer than forty-eight hours, but the law does stipulate forty-eight hours.

4. Once the mortgage break out fee is faxed back to the new lender, you need to contact the new lender and make sure the break out fee is the fee you expected. Lender tend to change the fee and up the fee suddenly. (Whether by accident or intentionally.)

5. Once the mortgage break out fee is acknowledged, the new lender would then get you to sign and make the change.

Once that occurs, the mortgage exchange process is complete..

Bottom Line:

One may believe their mortgage broker should advise you on this, but the truth is, they won't. In fact they want you to know as little as possible so that you can only listen to them. The mortgage broker has their own agenda. It is only in the best interest of the mortgage broker that you break out of the mortgage, so that he can collect the commissions with the new mortgage.  Also, if you do use a mortgage broker, all fees will be paid by you.

How to break out of a mortgage commitment, part 2

...continued from part 1

2. Discharge fee

It is really a fee on top of the penalty fee. So you are already paying the penalty and now the lender want to add another fee to make even more money. This fee is often around $275-$400. When first signed the agreement to accept the loan, you also signed an agreement to pay a discharge fee at the documented amount specified by the lender.

Work Around:

One way to avoid this fee is by using the same lender. Make sure you ask your lender first. Sometimes, your new lender is also willing to cover this fee.

 
3. Appraisal Fee

Penalty fee and discharge fee gets you out of the mortgage and so now you need to find a new lender. To do that, you will need an appraisal once again. This fee is ranges from $200-$400

Work around:

This fee can be covered by the new lender. If you use the same lender, you should not need an appraisal.

4. Legal Fees

If you are getting a new lender, your new lender may expect you to get lawyer for the changes. If you are refinancing, meaning you want to borrow more money, then it is possible, even your current lender is going to expect a lawyer to make these changes.

Work around:

Because it is a mortgage change as oppose to a new property, some lenders are willing to ignore this legal fee. Other lenders are willing to cover this fee.

Go To Part 3...

What you need to know to select the right Mortgage Lender, part 1

1. Interest Rate

This is the most obvious one and most important, but for absolute beginners, you target is to get the lowest possible interest rate. As of this point, on May 12, 2011, the lowest one I am aware of is prime-0.95%. Unless if Fixed Rate is lower than prime which is at 3%, I do NOT recommend going with Fixed Rate.

Objective: Get the lowest possible interest rate.

2. Mortgage Set Up Cost

There are many things that needs to be done to approved for a mortgage. However, most bank are willing to pay for these cost. Most brokers, in fact, all mortgage brokers, are not. The following are two main approval fees that you should know:

Appraisal Fee:

Cost: $200-$400, depending on house size.
A home appraisal is an estimate of the sale value of the home. It is often based on similar homes sold in the same neighbourhood over the past 90 days. Generally, an authorized apprasier will come into the house for 10 minutes and take some pictures of the rooms. You need to make sure all your rooms are accessible. The appraiser will then inform the mortgage lender the appraised value of the house. If this appraised value is lower than the price you are looking to buy it for, then the mortgage will not get approved. (For the appraiser's own legal safety, the appraiser will never appraise the value higher than the buying price. The most the appraiser will do, is appraise at the buying price. Just enough to get the mortgage approved, but never more to prevent getingt sued if the house value turns out to be lower.)

Not only is it necessary to get an appraisal to get your mortgage approved, an appraisal will inform you as to whether the house is worth buying. Thus, if your lender did not approve the house because the appraiser appraised it below the price you bought it, then simply don't buy the house! The house is overpriced.

Your target should be $200 - $250 or the mortgage lender should cover this cost. Some broker will attempt to charge over $400. So be careful!

Legal Fees:

Cost: $800 - $1200, depending on house size.
Lawyers are needs in order to ensure a smooth transaction to the new property owner.

Your target should be $800, flat rate. Some lawyers charge by the hour. I suggest using the flat rate to not get over charge or cheated. The $800 should cover everything including title search, stamps, and all materials necessary. Yes, lawyers can charge $5 just for a stamp. However, there are those lawyers who will attempt to charge too much. So once again, be careful! Although rare, some lenders may absorb this fee as well.

(Aside of these two fees, there are additional fees you need to cover depending on whether you are looking to break out of your mortgage, buy a new house or just renew or mortgage. For the purpose of this article, I will reveal the other fees in a future article)

Objective: Pay no more than $1000-$1200 for these two fees depending on your house size. Or the lender cover the cost.

3. Mortgage Commitmentitment

A lender may let you commit up to 10 years for a mortgage. Don't be stupid. You objective should have the shortest commitment. The longer the commitment, the more expensive it will get if you ever want to change your mortgage or break out of it.

For a variable rate, you wil generally find lenders expect 5 years. Although I have seen three. For Fixed rate, the shorter commitment also gives you the lower interest rate. If you have to go Fixed, go with the shortest commitment with the lowest interest rate which is usually one year.

Objective: Find the shortest possible commitment. For vairable rates, five years. For Fixed Rate, one year.

Continue to part 2

What you need to know when getting a mortgage, part 2


Key factors to getting out of a mortgage in order of importance continued from part 1:

4. Mortgage Prepayment

Every lender allows some additional payment to your mortgage. These additional payments are called prepayment.

Not only does a prepayment allows you to pay the mortgage off faster, it comes in handy when you are looking to break out of your mortgage and is wiling to take a penalty charge. By making a temporary high prepayment, you can reduce the penalty charge.

Banks generally provide 20% of your original mortgage can be prepaid each year. ING Direct offers 25%.

Objective: obtain the highest prepayment possible. You should be able to get one for 20%

5. Mortgage Accessibility and Change Request Rate

It is nice to be able to go on the Internet and monitor your mortgage. It is also nice to be able to quickly make changes such as changing your payment cycle or making a prepayment instantly over the Internet.

Most small lenders require a phone call and can take several days before making such changes. ING Direct requires that the prepayment be made only during the day of the of the mortgage payment. ScotiaBank allows you to make prepayments over the Internet and the transaction occurs instantaneously.

Discovering your lender's accessibility and change response rate is hard because this stuff is never discussed, but asking if your mortgage can be accessed through the Internet is a start! You can also ask how a prepayment can be made and how quickly it can occur.

Objective: Look for lenders that allow to access your mortage over the Inernet and make changes quickly online.

6. Home Equity Line

Home Equity Line is a secured credit line that allows you to borrow money at low interest rates, usually around Prime+0.5%. It is low because it is secured by your home. That is, if you ever end up not being able to pay the debt, your home becomes theirs. A home equity line can help you pay for things when you need short term cash.

The amount you can borrow is determined by the appraised value of your home times 80%.

Banks offer home equity line. Most small lenders do not. Some banks even allow you to consolidate your home equity debt into your morgage debt. Thus, reducing the home equity interest to the mortgage interest.

Many banks offer this home equity line even if you do not have a mortgage with them. However, they will charge a $150 or more for the set up fee, if you do not have the mortgage with them.

Objective: Look for lenders that can give you a home equity line and consolidate it into your mortgage with any fee associated.

 

Bottom Line:

You may never find the perfect lender will offer everything you want. Often, lenders that offer to pay for your mortgage set up cost, will not give you the lowest interest rate. You will have to do the math in order to calculate the best fit scenario. (Don't even bother asking a mortgage lender to do that for you. These lenders have their own agenda which is different and possibly opposite from yours. ) For example, if you have a large mortgage and do intend to make large prepayment, it would be better to find a the lower interest instead of finding a lender to cover the mortgage set up cost.

Scotiabank has an innovative step program that allows you to have three mortgages under one mortgage. Thus saving you mortgage set up fees when getting a new mortgage to buy a second home.

Good luck!!! If you have any questions or concerns, simply post them. I will respond.