|
Major
Direct Lenders |
|
Charted Banks |
| Governed by
the Bank Act, includes major banks
such as Royal Bank (RBC), Bank of
Montreal, Canadian Imperial Bank of
Commerce (CIBC), TD Canada Trust.
These banks offer a full range of
financial products including
mortgages. |
| |
| However,
major banks do not usually negotiate
their mortgage terms and conditions,
therefore are not able to design
solutions specific to each client's
needs. Major banks are best used
when looking for a conventional
mortgage with at least 20%-down
payment. |
| |
| Life
Insurance Companies |
| Life
insurance companies have
traditionally been active in both
residential and commercial
mortgages, although their rates are
slightly higher then those of
charted banks, they are usually more
lenient with the credit worthiness
of their applicants. |
| |
| Most life
insurance companies today got out of
the competitive residential mortgage
business and focus on commercial and
investment lending. |
| |
| Loan
and Trust Companies |
| Today loan
and trust companies act in the same
manner as major charted banks, but
on smaller scale. Most will offer
financing for both residential and
commercial acquisitions. |
| |
|
Finance Companies |
| Are not
governed by type legislation that
applies to banks and trust companies
and have the flexibility to custom
design financial packages for
consumers and business seeking
unique financing. Finance companies
also actively pursue the purchasing
of mortgages, subject to pre-defined
yield requirements. |
| |
| Most finance
companies will not lend directly to
the borrower but will do so through
the use of mortgage brokerage
companies. |
| |
|
Agent
Sources |
|
Mortgage Brokers |
| Representing
either the lender or the borrower
and bringing the two parties
together in a lending transaction.
Sometimes referred to as mortgage
dealers. |
| |
| Most
borrowers mistakenly assume that
mortgage brokers do not work with
major banks and financial
institutions, and that the borrower
must directly pay a fee to the
mortgage broker. That is usually
falls, most mortgage brokers do work
with banks and will be compensated
directly by the lender and not the
borrower. |
| |
| Mortgage
brokers are best source for
borrowers that are not able to
easily walk into a bank and get a
mortgage, whether due to their poor
credit or luck of sufficient down
payment. Mortgage brokers are also
able to custom design mortgage
solutions to meet each borrower's
needs, whether be it a residential
or a commercial deal. |
| |
|
Private Investors |
| Lawyers are a
reliable source as they act on
behalf of private investors and
estates willing to place funds in to
the real estate market. Private
investors can come handy would
conventional sources are not able or
willing to finance certain deals. |
| |
| Private
investors will usually charge
significantly higher fees then
conventional funding sources, but
will require very little, if any,
documentation for lending purposes.
|
| |
| Please note
that, mortgage interest in Canada
and the United States is a business
expense and therefore are tax
deductible*, therefore if it makes
financial sense to purchase a
property at a higher interest rate
it maybe wise to do so then not to
purchase one at all. |
| |
| *we strongly
encourage you to please seek
competent legal and accounting
advise before proceeding with any
real estate sale or acquisition.
Please use only registered and
licensed agents. |
| |
|
Lender Holdback |
| Funds that
are not advanced to the borrower by
a lender until specific requirements
or/and conditions have been met by
the borrower. For example, when
electrical services must be brought
back to the standard or structural
changes made. |
