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We have Kim Nguyen joining us again for Mortgage Mondays where we discuss how to avoid the capital barrier. As real estate investors, we often want more properties than banks and lending institutions are willing to lend us money for. In this episode, we discuss the best way to set up your financing in order to maximize your portfolio size and what you can do to keep growing once you’ve hit that financing barrier.
If you’re getting close to that wall or you’re getting started and have no intention of stopping anytime soon, this episode is for you!
- BOC had a meeting to keep rates the same
- Interest rates likely to stay steady for the next year
- A lot of activity in the form of purchases and refinances
- How to delay hitting the capital barrier as long as possible
- Depends on how many rental properties you want to purchase
- If you want more than 5 properties, don’t go to your big bank to get a mortgage
- Alternative lenders that provide comparable or better rates:
- Monoline lenders
- Credit unions – may have benefit in smaller towns
- Alternative lenders with slightly higher rates – may be more flexible with financing terms
- Ensure the financing product fits with your long-term goals; rates may be secondary
- Can only access monolines and alternative lenders through a mortgage broker
- Home equity lines of credits are your best friend to delay hitting the capital wall
- Rental properties cost more in interest than a personal residence
- Discussed collateral mortgages are and how they work
- Allows you to save on legal fees when wanting to refinance a mortgage
- May be difficult to get secondary financing if your collateral charge is too high
- Discussed options to keep growing once you hit the capital barrier with banks
- You can reach Kim at firstname.lastname@example.org