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MORTGAGE SYMPOSIUM

MORTGAGE SYMPOSIUM. June 30, 2009 ECCB Headquarters @ 5.30 p.m. MEETING YOUR BANKER PERSONAL APPLICATION. Latest Pay Slip/Job Letter 2 Pieces of Picture identification Proof of deposits held-Bank book/Statements Information on present borrowings Copy of title document Approved Plans

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MORTGAGE SYMPOSIUM

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  1. MORTGAGE SYMPOSIUM June 30, 2009 ECCB Headquarters @ 5.30 p.m.

  2. MEETING YOUR BANKERPERSONAL APPLICATION • Latest Pay Slip/Job Letter • 2 Pieces of Picture identification • Proof of deposits held-Bank book/Statements • Information on present borrowings • Copy of title document • Approved Plans • Recent estimates dated & Signed by contractor • Purchase Agreement (Property Purchase)

  3. MEETING YOUR BANKERINVESTOR • Proposal Requirements: • Total cost of project: Does it include furniture/appliances? • Cash Input vs amount to be borrowed • Monthly repayment • Cash Flow from rental taking into consideration: • Non rental of some units • Repairs/Maintenance • Utilities-Electricity, water, cable, internet • Insurance • Taxes

  4. USD MORTGAGES • RBC launched this product in March 2009 • Loans in excess of USD150,000 • 70% financing available for amounts under $500,000 • 60% -$501,000- $750,000.00 • 55% $750,001 - $1,000,000.00 • 50% over $1,000,000.00

  5. Equity Calculations • Example 1 • Land Cost/Value $ 50,000 • Estimates $300,000 • Total Project cost $ 350,000 • 10% DEPOSIT = $35,000.00 • You can borrow up to $300,000 as the cost/value of the land covers your down payment • Value of land is utilized if purchased over 5 years ago

  6. Equity Calculations • Example 2 • Land price/value $ 20,000 • Estimates $300,000 • Total Project cost $320,000 • 10% DOWN PAYMENT = $32,000 • Client will have to inject $12,000 in cash as bank will only lend up to $288,000 • Value of land will be utilized if land purchased 5years previously

  7. Debt Service CalculationsAnnual Figures

  8. Mortgage Indemnity Insurance • The bank reduced the amount of down payment required by clients from 20% to 10%, however we still have to maintain the 20% equity requirement. This is covered by Mortgage Indemnity insurance on the difference between the clients minimum 10% down payment and the banks requirement. It is calculated as follows:

  9. Mortgage Indemnity • Loan proposal of $300,000.00 • Project Cost $350,000 • Required equity: $350,000 x 20% = $70,000 • Client has an input of $50,000.00 • They have 2 options inject an additional $20,000.00 or pay a one time fee calculated as follows: • $70,000 - $50,000 = $20,000 x 5.75% =$1,150.00

  10. Legal Fees/Stamp Duties • Loan amount of $300,000.00 • If title is held by Certificate of Title • We hold title by way of equitable Mortgage • Fees/Duties = $4,308.16 • If title is held by Deed • We hold title by way of legal mortgage • Fees/Duties = $6,632.20

  11. TOTAL FEES Negotiation Fee – 1% of loan $3,000.00 Stamp Duty on Promissory Note 300.00 *Valuation Report (.0025 x value) 875.00 Mortgage Indemnity 1,150.00 Legal Fees -COT 4, 308.16 Site visits 1,600.00 GRAND TOTAL $11,233.16 *Additional fees include site visits

  12. Mortgage Symposium • Thank you for your attention • Any Questions?

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