Interest Rates on RRSP Mortgages

Podcast Episode 96:
“RRSP Mortgages.

In Canada, it is possible to use money held in a Registered Retirement Savings Plan (RRSP) to fund mortgages. While this strategy can yield a nice steady return on investment, there are rules in place that can make it a bit tricky to get into. One of those rules is that the lender (i.e., the person with the RRSP) must use a third party trustee to administer the mortgage. This Tale is about dealing with a couple of different trustees and their policies on interest rates. RRSP mortgages must legally be “commercially reasonable,” but apparently there is a lot of room for interpretation of what exactly that means…

 

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Need an Alberta real estate lawyer in Edmonton? Contact Barry now!

“Mortgage” image courtesy of NYPhotographic.com used under Creative Commons Attribution-Sharealike 3.0.

Joint Ventures, RRSP Mortgages, Due Diligence, & More!

Podcast Episode 92:
A Few Quick Tales.”

Here’s some great stories about people buying and selling real estate in Alberta. These five quick Tales from the Trenches are short, but they show a wide range of different issues, problems, and successes.

In a joint venture, it’s always nice when a more experienced investor can help out someone who’s just getting started, which is the subject of the first Tale. The second deals with rules surrounding RRSP mortgages. Did you know that the money needs to be at arm’s length from the person whose RRSP it is? The third Tale is about Alberta Health’s Minimum Housing & Health  Standards. I’d recommend anyone looking to buy real estate in Alberta take a look at these (available HERE), especially if they want to rent out the property. The second last Tale is about seller’s warranties. They can be hard to enforce, and so due diligence with things like fire safety searches is important before committing to buy. Finally, a real estate deal that is too good to be true can have hidden problems. It might still be a good deal, but it’s best to look a gift horse in the mouth by still doing your due diligence.

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If you’re buying or selling real estate in Alberta, get yourself an experienced Edmonton lawyer. Use the contact form below!

House/Home Inspection” image by Mark Moz used under CC Attribution 2.0 Generic.

Giving Keys to a Buyer & Fixed Cash Deals

Podcast Episode 91:
Keys & Cash.”

Here are two quick Tales from the Trenches: 1) tips on keeping a property buyer motivated and 2) contract language to fix the cash portion of a real estate deal.

Our first Tale shows one reason why a real estate deal can close late. Even when investors have good relationships with their buyers, I say hold onto the keys to the property until everything is finalized. That’s a “key” to motivating your buyer to hurry up!

In the second Tale, our investor had a great deal, with the seller agreeing to carry a second mortgage on the property. But when the assumption statement came back less than the first mortgage was supposed to be, our investor got caught paying the difference. You can fix the cash in a second mortgage or vendor take-back financing scenario, but this needs to be written into the contract.

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Barry McGuire is a real estate lawyer in Edmonton, Alberta. Use the form below to get in touch.

House and Keys” image by geralt on Pixabay used under CC0 1.0.

Why Do I Need a Lawyer in a Real Estate Transaction?

Focus on Real Estate: Quick Tips.

In this video, Barry explains what a lawyer does for you when you buy or sell real estate. Below are two of the highlights. If you need an Edmonton real estate lawyer, get in touch with Barry at RMLO Law LLP.

  1. A buyer’s attorney prepares the mortgage documents that lenders won’t let borrowers prepare themselves.
  2. A seller’s lawyer manages the money in a transaction to make sure that all outstanding debts or taxes are paid, which mean the seller receives their cash with no strings attached.

This is the next instalment of Focus on Real Estate with Barry C. McGuire, a series of videos that provides bite-sized pieces of real estate knowledge.

If you’re buying or selling real estate in Alberta, contact Barry now!

Videos co-produced by the Real Estate Investment Network (REIN) as a Google Partner.

Mortgage Penalties

Podcast Episode 87:
Fun with Mortgage Payout Math.”

Paying off a mortgage early can result in penalties. However, there are ways of minimizing the financial repercussions. In this Tale, Barry works through some mortgage math that could save you money.

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Buying and/or selling Alberta real estate? Contact Barry now!

“Mortgage” image courtesy of NYPhotographic.com used under Creative Commons Attribution-Sharealike 3.0.

Getting Payments through a Trustee

Podcast Episode 85:
Hurry Up and Wait.”

When dealing with trustees or lenders, there are many things that can delay a transaction. The type of payment can trigger a processing hold, the shipping method can be slow or unreliable, and sometimes clerks just overlook things. If you need a certain result, in a specific amount of time, then you need to lock down every stage of the process! In this Tale, you’ll hear just how many things can go wrong with getting a lump sum payment on an RRSP mortgage. Our client was trying to receive payout money from the borrower, but almost everything that could go wrong did go wrong…

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Buying and/or selling Alberta real estate? Contact Barry now!

“Reverse Mortgage” image from https://www.aag.com/ is used under CC Attribution-ShareAlike 2.0

What to Do About Foreclosure

mortgage default foreclosure

Podcast Episode 75:
Help, I Can’t Make My Mortgage Payments!”

To mark the 75th episode of Tales from the Trenches, we have a Special Extended Edition all about foreclosures. This Tale is so packed full of helpful information that it had to be nearly half an hour long! The recent economic downturn in Alberta triggered by a collapse in oil prices means that many people are faced with a dilemma: what do you do if you can’t make your mortgage payments? It’s best to be proactive and not wait for the bank to come calling, and this Tale will help you figure out some options. We’ve also got some creative solutions for real estate investors that can help them keep their businesses above water in tough times.

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Financing Conditions

Podcast Episode 74:
Unconditional Mortgage Commitment:
Are You Sure?”

Sometimes a “sure thing” can come apart at the last minute. In this Tale, we have a buyer who found her dream home and was all ready to purchase. Or so she thought! Unfortunately, an inspection revealed major problems with the foundation. She was able to negotiate a reduction in purchase price, and so she went unconditional on the deal. But then the bank pulled her fully approved financing and left our buyer scrambling to save her dream home—as well as her $60,000 deposit. In the end, she found a solution, but this could have gone better if she had kept her financing condition on the deal until she was surer of the situation.

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Rent-to-Own aka Lease-Options

Podcast Episode 67:
“Coaching Successful Lease-Options.”

When a qualified tenant wants to be a homeowner, but can’t get a mortgage, investors can offer him or her a lease-option. This creative investment strategy is also known as rent-to-own. The trick is doing enough diligence on the tenant to make sure that they will be able to qualify for a mortgage at some point in the (relatively) near future. It also helps to get insurance in case something goes wrong. The tenant pays a non-refundable sum of money for their lease-option, and the whole deal can provide an excellent return-on-investment (ROI) for real estate investors.

Download the audio file HERE and the text/handout HERE.
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