APPLY FOR A MORTGAGE WITH MICHAEL!
You do not pay Michael,
the lenders do.
BANK SAID NO!
As a trusted mortgage professional Michael’s job is to source and find the lowest cost funds for his clients. The process always starts trying to exhaust all angles for the best rates and terms and keep working down the long list of probable lenders for each borrower’s criteria with the information provided. Here is a synopsis of the lending landscape in Canadian mortgages.
A. PRIME LENDING
Pros
- best market rates
- more traditional, well-known storefront lenders and products
Cons
- Intensive documentation required for credit and income qualification
- Conservative lending policies that reduce your borrowing power – i.e.: Stress Test
B. ALTERNATIVE LENDING
Pros
- More liberal qualification and/or extended debt-servicing ratios
- Alternative lenders can lend on cashflow – actual business and/or household income via bank statements over declared tax returns or pay stubs
- Alternative lenders can lend on the equity of the property and not income
- Common sense approach to providing solutions for the borrowers with credit issues and/or other prime lending issues
Cons
- Slightly higher rates and payments than Prime lending
- Lender and/or broker fees often apply and are fully disclosed
- Borrowers maybe unfamiliar with value propositions of alternative lending.
C. REVERSE MORTGAGES – NO MONTHLY PAYMENTS
For those borrowers over 55 years old, reverse mortgages are not income qualifying and are 100% based on the equity in the home. This is the largest growing segment in the Canadian mortgage landscape that allows people to remain in their homes longer with no monthly payments.
Pros
- Lending is based on the value and marketability of the property over the income and/or credit of the borrower.
- Funds can be advanced month to month or in lump sums as needed.
- Independent legal advice required to protect the borrower every time.
- Funds are available on a tax-free basis for the borrowers use.
Cons
- Rates are higher than prime lending and interest accrues over time.
