Over the last 6 weeks there has naturally been a large increase in inquiries from Canadian's looking for access to Mortgage Capital or other sources of capital.
As a Mortgage Brokerage that has access to many forms of Mortgage Capital we want to share some different avenues to access the financing you may require.
Cash Back: For Purchase & Transfers (moving a mortgage from one lender to another) you may want to simply inquire if a cash back mortgage is available. Some lender offer anywhere from 1% to 3% of the mortgage your applying for in the form of cash back on closing. These funds can be used for closing costs, other expenses that may have arisen or simply save for peace of mind. The case back comes with high interest rate so there is a decision on better interest rate or slightly higher interest rate with access to capital on closing. Cash backs are not meant for all clients but one creative way of accessing capital in todays environment if your buying a home and require a mortgage or considering transferring your mortgage from one lender to another.
Reverse Mortgage: A Reverse Mortgage allows Canadians to access equity in their home without having the income to debt service the loan. Reverse Mortgages are meant for Canadians that are over the age of 55 years old and access up to 55% of the home value without having a loan payment. Reverse Mortgages are another way Canadian's can access equity thats been built up in their principal residence over the years but don't have the income to refinance their property into a mortgage or do not want the burden of a mortgage payment.
Refinance: Refinancing your mortgage allows Canadian's the ability access built up equity and have the income to debt service the mortgage. Refinances can access equity, change the interest rate, payment among other structural changes to the mortgage. Refinances are sometimes used to obtain a better interest rate and other times for accessing built up equity. Pending the current value of your home, size of existing mortgage, interest rate on the existing mortgage and terms available in this market a refinance is another way Canadian's access Mortgage Capital.
"B Lending" is a form of Mortgage Capital Canadians have access to that is traditionally priced higher than "A Lending" or institutional capital, but is more flexible. B Lending can support everything from clients that are business for self and file lower income tax returns but have business revenue that can debt service the loan. B lending also can be more flexible for clients with slight credit issues, or some flexibility in income ratios, loan to value and other challenges that arise. B lending has a premium to its interest rate but can often get Canadian's access to capital that may not be available at the bank level and is cheaper than private mortgage capital.
Private Lending: Private Lending is a form of Mortgage Capital that can help Canadians access capital when they can not obtain it through "A Lending or B Lending" platforms. Private Mortgage Capital is normally underwritten with the asset as the main consideration along with the exist strategy. The interest rate is higher but can act as a temporary solution to employment issues that arise or requiring access to equity build up in your home that other lenders are not able to lend against.
-As an example there is a promotion going on right now (April 2020) the provides a 2nd mortgage from $15,000 to $50,000 with 1 year interest prepaid (no interest payments for 1 year) with no income and no credit consideration.
Outside of Mortgage Capital the Canadian Government has provided many forms of stimulus packages designed to support Canadians without work or have been impacted by COVID-19 be it salaried or self employed. We encourage Canadian's to connect with their accountants who are providing a lot of support during an already busy time of year to help Canadians access capital. We also have a website dedicated to supporting all the programs available for Canadians. If you would like informaiton on how to access Mortgage Capital or learn more about government programs, please email: scott@thewestlaketeam.com or call 416-436-1135.