FINANCING AVAILABLE

GrowOpSolutions.ca is pleased to offer assistance in securing financing to those who have been victimized by unscrupulous people using their rental property as a Marijuana Grow-Op or a Meth Lab. Likewise, investors contemplating the purchase of houses or buildings that previously housed one of these illegal drug operations may wish to acquire financing to cover the clean-up expenses.

In today’s challenging economic climate, we know that it can be difficult to find credit for the costs of remediation and repairs to these buildings. In order to facilitate this process, we have developed an arrangement whereby our financing partner can utilize multiple funding options to ensure the best rates possible.

In order to qualify for financing, certain conditions must be met. For example, the property must be used as collateral, and it must be properly remediated first, with an environmental report showing the property is safe for occupancy. Also, the mortgage must be CMHC insured (even if the loan to value is below 80%).

There are other considerations in the mortgage approval process, and the following guidelines are offered to help anyone wishing to apply.

THE 5 C’s OF CREDIT

Character

Is the general impression you make on the potential lender. The lender will form a subjective opinion as to whether or not you are sufficiently trustworthy to repay the loan. Your educational background and experience in your field of work will be included. The length of time at your current employment, and your current residence, will be considered. The longer you have been at both, the higher you will score on the character scale. In 2007, there was little concern that your future might be in jeopardy. In 2009, every source of income is scrutinized as to whether it is feasible that it will continue.

Collateral

Is the extra security the lender has to cover the loan. In real estate transactions, this generally means the property. If for some reason, you cannot repay the mortgage, the bank wants to know that the real estate the mortgage was taken out for is good and marketable real estate. A current real estate appraisal will determine the value of the property in today's market. Some lenders will limit themselves to the type of property they are going to accept. Rural properties have less interested buyers than urban properties. In the case of a foreclosure, the lender doesn’t get the property. They have to apply to the courts to have them placed back on the market for resale to repay the loan. This takes time and money. Lenders will charge for the risk accordingly.

Capital

Is the money you personally have invested in the purchase, otherwise known as your down payment. The more of your own money you invest as a down payment, the more likely that you will do all you can to maintain your payment obligations. This fact was evident during the recession of the 90s where a large number of the power of sale properties were, at one time, purchased with small down payments. Capital is also reflected by your ability and willingness to save money and accumulate assets. The higher your net worth, the more you have as a cushion for repayment in the event you run into a financial set-back. Saved or earned capital is more highly regarded than ‘gifted’.

Credit

Is the evaluation of your habits in performing credit obligations. The information about your credit history is stored at the ‘credit bureau’ and indicates how well you paid your bills over the last 6 years. All major credit cards, auto loans, leases, etc. are reported to the credit bureau. A lender will evaluate your ability to maintain your obligations, and try to determine how well you live within your means. Some individuals make the mistake of not paying the minimum monthly obligations on loans and credit cards, with the expectation of making a larger payment the following month. These missed payments appear on their credit report, branding them as chronic ‘late-payers’ for the next 6 years.

Capacity

To repay the loan is probably the most critical of the five factors. The lender will want to know exactly how you intend to repay the loan. The lender will consider your income as it relates to the loan that you are applying for. Does the monthly carrying costs of the loan represent less than, or equal to, 32% of your total monthly income? If it does, the probability of you successfully repaying the loan is fairly high. When you include your personal debts, loans, cards, etc., a lender will likely not approve a total debt load of higher than 40% of your total monthly income. Prospective lenders will also want to know about any other sources of income you may have to repay the loan, if your steady income stream is interrupted. What savings can you fall back on? What property do you have that you could sell to cover payments?

The biggest factor that people are having the most difficulty with today is: These principles can change completely depending on what the future economy is predicted to do. For the past six years, we have had a rising economy, and increasing property values, with little fear of people losing their jobs. Even if they do, the value of their property has risen, so they can sell and get out of trouble. Now we are in the midst of a declining economy. It is expected that, in the near future, many jobs will be eliminated. House sales will fall along with the value of homes. Anyone who has a home that they purchased recently, and lost a job, had better have 10 – 20% equity or they won’t be able to sell. Without extra funds to pay the mortgage, foreclosure is probable.

Banks get their money from interest earned on repaid loans. They lose on foreclosures. The income they earn is used to pay investors who deposit their savings in the bank. They can only do that if they earn a profit. Do you having any savings in the bank? Would you keep it there if you thought your bank was losing money?

HOW TO APPLY

Click this link to download a Mortgage Application form that can be filled in right on your computer. Once completed, please Contact us by email for further instructions. PDF Credit Application Form