There is almost ALWAYS a mortgage solution. New to Canada? Self Employed? Maybe a few credit glitches in your past? Not everyone can qualify for bank mortgages today. It’s doesn’t make you a bad person, it makes you a savvy person getting the best mortgage for your situation! With the mortgage rules constantly changing, private or alternative mortgages are becoming the only way many people can refinance or buy.
Did you know that according to the Globe and Mail report “self-employed now represent about 15.6 per cent of all working Canadians”
There is a misconception, that alternative or private mortgages are only for bad people. Some folks call it “subprime”. Don’t let the word “subprime” scare you as our lending practices here in Canada are very strict and all federally regulated.
What is Alternative or Private Mortgage Financing and who uses it?
Private mortgage financing can be an excellent alternative for those that are either:
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Self Employed and declare little or no income
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Micro-condos that are less than 400sqft (banks generally won’t finance these)
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Foreign investors
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Non-residents of Canada
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Credit Challenged
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Owe CRA back taxes
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Property Taxes that are in arrears
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People going through a foreclosure
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Construction financing and commercials loans
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Equity takeouts for starting a business
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Short term financing that has is open and has no penalties
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Don’t want to refinance their 1st bank mortgage as the penalties are to high.
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Requiring funds up to $20 million dollars
Many Banks and mortgage brokers don’t specialize in private financing. It’s vital to ensure these types of mortgage files are are submitted and packaged different than a traditional bank type mortgage.
If it’s submitted without care and due diligence you may pay a higher rate and HEFTY fees!When you are applying for traditional mortgage (meaning your are a typical T4 employed client, good credit and saved down payment) the CLIENT is qualified based on the PERSON first, then the property.