Author: Allan Jensen

27 Nov 2018

Leverage. Is it time to re-think your strategy?

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Leverage, defined by Investopedia as an investment strategy of using borrowed money — specifically, the use of various financial instruments or borrowed capital — to increase the potential return of an investment, is a core strategy of real estate investors. In my post entitled Real Estate Yield. Understanding Your Cash-on-Cash Return , I reminded readers Read More

29 Oct 2018

Demand Loan vs. Term Loan. What’s the Difference?

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

What’s the difference between a Demand Loan and a Term Loan? A recent commercial mortgage refinancing I was involved with resulted in a discussion around Demand Loans. What are they exactly, and how they might typically differ from a term loan? A demand loan is a loan that a lender can require to be repaid Read More

30 Aug 2018

Is easy money coming to an end?

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

In a previous post, I discussed interest rates and their effect on real estate values. I argued that they did indeed alter buyer perceptions, and consequently value and price. But what about absolute interest rate levels? Is easy money coming to an end? Many lack any experience of high interest rates In a June 5, Read More

17 Jul 2018

Rising Interest Rates and the Impact on Real Estate Values

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Rising Interest Rates and the Impact on Real Estate Values. Is there a direct connection? In a post entitled Interest Rates and Property Values. What’s the Connection?, I suggested that there was. An example was given which suggested that mortgage lenders would be directly impacted by a rise in rates, as their underwriting parameters, most Read More

18 Jun 2018

Debt Service Ability. A renewed lender focus

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Debt Service Ability. A renewed lender focus it seems.  As interest rates firm, valuations are impacted, and cap rates begin to firm. What about Debt Service Ability? It is becoming more apparent that property income, and more specifically net operating income available to service debt, has a significant and growing influence on the amount of Read More

22 Feb 2018

Foreclosure Not Automatic on Default

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

According to a recent case tried in the Court of Appeal for Ontario, Winters v Hunking, 2017 ONCA 909 as summarized by Scott McGrath of WeirFoulds LLP, Foreclosure is not automatic on default. In an interesting article posted December 8, 2017 in Mondaq, Scott McGrath reminds us that the Court may have acknowledged the Lender Read More

22 Jan 2018

Mortgage Broker Value

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Not surprisingly, borrowers often default to their own Banker. And why not? It’s an established and comfortable relationship. Perhaps it’s viewed as the path of least resistance. But is it the right lender for the borrower’s current specific needs? Perhaps not. More sophisticated borrowers may be of a size or scale that they have their Read More

23 Nov 2017

Additional Financing with a “Blend and Extend” Mortgage

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Prepayment Privileges You need additional financing. Do you prepay your existing loan? We remind readers that commercial mortgage borrowers do not enjoy the privileges afforded personal borrowers. Section 10 of the Interest Act, allowing borrowers to repay loans after 5 years, with a 3 month interest penalty, does not apply. In fact, for the most Read More

3 Nov 2017

The Capital Stack. What You Need to Know

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Financing is key to successful real estate investing. You’ve aligned your financing with your real estate investment strategy, and are comfortable that you can execute your plan. As a result, you may have a conventional mortgage, and secondary debt as well. The term Capital Stack is used to describe the various levels or layers of Read More

24 Aug 2017

How Low Can They Go? Thoughts on Cap Rate Compression

Posted by: Allan Jensen

Dominion Lending Centres - Accredited Mortgage Professional

Cap Rates are one of the key metrics in commercial real estate investment analysis. In very simple terms, its the ratio of rent paid by your tenants, to the price/value of the building. An important barometer on the current state of the market, cap rates are inversely related to value. As the price/value goes up, Read More

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