Special Situations
Not every financial situation or property buying need is cut and dry - special situations make purchasing a home or property more complicated.
Special financial situations include:
- Self Employment
- Recent Move to Canada
- Non Resident Status
- Bruised Credit
- Multiple Rental Properties
- Needing a Second Mortgage
By working with a mortgage broker, you have access to a variety of lenders & lending options, including mortgages that aren’t widely advertised, which sets you up for lower rates, better terms, and more flexibility with your mortgage.
With over 15 years in financial services, and access to a team with over 30 years in the mortgage industry, I’ve seen and handled it all - any specific or unique situation can be addressed through our variety of lenders.
If you’re looking for competitive and flexible financing for your next purchase, contact us today to explore the options that traditional banks can’t offer!
Articles
One of the benefits of working with an independent mortgage professional is having lots of great financing options! Rather than dealing with a single lender who has one set of products, brokers work with multiple lenders who offer a wide selection of mortgage financing options. This comes in handy when your situation isn't "normal" or you don't quite fit the profile of a standard buyer. Purchasing a new construction home through an assignment contract would be a great example of this. Purchasing a new construction home through an assignment contract can be tricky as not every lender wants the added perceived risk of dealing with this type of transaction. Most of these lenders won't come out and say it, rather they will simply add a significant list of qualifying conditions to make the process harder. The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases. Here are some of the highlights: In order to qualify, all standard purchase qualifications apply (income, credit, and downpayment) Assignments can be at original purchase price, or current market value Minimum 620 beacon score with no previous bankruptcies or consumer proposals The full downpayment must come from the purchaser and not include any seller incentives As far as documentation goes, the lender is going to want to see the original purchase agreement signed by all parties, the MLS listing, the assignment agreement signed by the builder, original purchaser, and the new buyer. The lender will also want to see the side agreement between the original purchaser and the new buyer that includes the amended purchase price, and the lender will want to substantiate the value through a full appraisal. Now, as every situation is different, this list of conditions is in no way exhaustive, but simply meant to show that assigning a new construction purchase contract is in fact doable while highlighting some of the terms necessary to secure financing. If you are looking to purchase new construction through an assignment contract, or if you want to discuss purchasing a home through traditional means, please contact me anytime! I have access to the very best products on the market that won't limit your financing options!
Alternative lending refers to lending practices that fall outside the normal banking channels. These are lenders that think outside the box and offer lending solutions to Canadians who wouldn’t otherwise qualify for traditional bank products. Although we all like to think that we’re going to qualify for the best mortgages available, this isn’t always the case. Sometimes life just gets in the way! So here are four times that alternative lending beats your typical banking practices. Damaged Credit Life happens, businesses and marriages break down, health can be taken for granted and then taken away. Regardless of why credit has been damaged, there are alternative lenders that look at the strength of employment and income, and the downpayment or equity to offer a new mortgage. Although the rates can be a little higher here, if it’s the choice between buying a property or not, having options is always a good thing and that’s what the alternative lenders will do, offer options. If you do have damaged credit, the goal is to be working towards establishing better credit and moving back into a typical mortgage as soon as possible. Use an alternative lender to bridge that gap! Self-Employment If you run your own business, you most likely have considerable write-offs that make sense for tax planning reasons but don’t do so much for your verifiable income. Traditional lenders want to see verifiable income, alternative lenders can be considerably more understanding and offer very competitive products. As the rates on alternative lending aren’t that far from A lending, alternative lending has become the home for most serious self-employed Canadians. Yes, you might pay a little more in interest rates, but oftentimes that money is saved through corporate structuring. Non-traditional income Welcome to the new frontier of earning an income. If you make money through non-traditional employment like Airbnb, tips, commissions, uber, or uber eats, alternative lending is more likely to be flexible to your needs. Most traditional lenders want to see a minimum of two years of established income before considering income on a mortgage application. Not always so with alternative lenders (depending on the strength of your overall application). Expanded Debt-Service Ratios With the government stress test significantly lessening Canadians ability to borrow, it’s a good point to note that there are lenders in the alternative channel that allow expanded debt-service ratios which can help finance more expensive (and suitable) property for responsible individuals. Typical A channel lenders are restricted to GDS and TDS ratios of 35/42. However, alternative lenders, depending on the loan-to-value ratio have more flexibility. The more money you have as a downpayment, the more you’re able to borrow and expand those debt-service guidelines. So there you have it, 4 ways alternative lending beats out traditional bank financing. If you would like to discuss mortgage financing, please don’t hesitate to contact me anytime!
If you happen to be going through, or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property in order to buyout your ex-spouse. For most couples, their property is their largest asset and where the majority of their equity has been saved. In the case of a separation, it is possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property's value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program. Here are some common questions about the spousal buyout program: Is a finalized separation agreement required? Yes. In order to qualify, you will be required to provide the lender with a copy of the signed separation agreement. The details of asset allocation must be clearly outlined. Can the net proceeds be used for home renovations or to pay out loans? No. The net proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly agreed upon in the finalized separation agreement. What is the maximum amount that can be withdrawn? The maximum equity that can be withdrawn is the amount agreed upon in the separation agreement to buy out the other owner’s share of property and/or to retire joint debts (if any), not to exceed 95% loan to value (LTV). What is the maximum permitted LTV? Max. LTV is the lesser of 95% or Remaining Mortgage + Equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV). The property must be the primary owner occupied residence. Do all parties have to be on title? Yes. All parties to the transaction have to be current registered owners on title. Solicitor is required to do a search of title to confirm. Do the parties have to be a married or common law couple? No. The current owners can be friends or siblings. This is considered on exception with insurer approval. In this case, as there won't be a separation agreement, there is a standard clause that can be included in the purchase contract that outlines the buyout. Is a full appraisal required? Yes. When considering this type of a mortgage, it is similar to a private sale and a physical appraisal of the property is necessary. If you have any questions about how a spousal buyout mortgage works, please contact me anytime. Be assured that our communication will be held in the strictest of confidence.
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