Maybe it doesn’t need to be said, but I’m going to say it anyway:  Teaming up with an EXPERIENCED Broker is EVERYTHING in this market.  You need and want a Broker who not only has access to the best rates (easy part) but it’s imperative they are experienced enough to see the big picture/long term plan.  The Broker needs to know the questions to ask upfront so unspoken “surprises” don’t pop up sending the deal spiraling sideways at the final hour (OH, you are divorced and paying $2000 in spousal support… great to know…. )  My moto:  Tell me everything, I will tell you how to package it.

I am 20 years into this amazing industry and it’s been a perfect fit for me.  What I love to do more than anything is HELP people – and sometimes that means I get to put together the tougher puzzles.  I do over 30M in Mortgages a year and my business is evenly spread between A and B deals.  I arrange a ton of private deals as well, and I am not afraid to give alternative options and provide exit strategy’s to ensure they aren’t on the forever/never plan. I will bring your Bank to the table on rate come renewal, without any fees or obligation.

Tough deals don’t scare me, deadlines don’t scare me – I have an amazing assistant Nicole, and together we are a well oiled machine. I can normally review a deal with a client and in 5-10 minutes have an answer as to whether or not it’s doable, and what rates they might be looking at.  And if I can’t find a solution, I have a whole Plan B Team willing to review it prior to issuing any declines.

So, yeah – I GOT THIS!  Send them over 😉

Have an amazing week!

Janette Roch, MBI

CELL: 250 588 1919

There are a variety of great reasons to go with a Variable Rate Mortgage, here are the ones I focus on:

1) More Borrowing Power – Today’s Stress test on a Variable Rate mortgage is still 5.25%, whereas a FIXED rate requires a stress test rate of 6.40%-6.80%. This can equate to thousands more in borrowing power! E.g. A client earning $100K takes a 5 year FIXED RATE today – they qualify for $450K Mortgage. If this same client takes a VARIABLE rate, they qualify for $510K Mortgage – that’s $60K more house!!!!

2) Historically less interest paid … see Prime Rate Chart and Historical Comparison Chart. Although Prime is moving quickly NOW, we are being told it will likely level and will likely not catch up to what the fixed rates are currently priced at. Even if it does catch up, it takes time to do so and in the meantime you are paying less interest.

3) Lower penalty should rates drop back down again – Variable rate mortgages come with a 3 month interest penalty and NEVER IRD.

4) Opportunity to float back DOWN, which it always does eventually! If we see a recession next year, which some economists are predicting, we could see rates come back down – you do NOT want to be locked down and paying large penalties in order to take advantage of it.

***Here is another spreadsheet I use often – it is designed to run hypothetical scenarios of multiple prime changes throughout the 60 months based on the client’s assumptions.

***Both amortization schedules are then compared to analyze the findings and make a recommendation into a dynamic sentence that changes based on the data:

Call me if you would like me to run any numbers thru this calculator!

This program is designed for PURPOSE BUILT RENTAL PROJECTS with 5 OR MORE UNITS. The Project must be focused on either Affordability, Climate Compatibility or Accessibility – or a sprinkling of all three. It can be applied to new builds as well as existing property purchases / refinances.

This product works on a Scoring System – the more you bring to the table, the more CMHC will offer in the way of lending incentives.

New Build Example:
–Developer agrees that 10% of the units will be priced at 30% of the Median renter income for 10 years (currently $50K as per Stats Can) = $1250/month in rent = 50 POINTS
–Developer agrees to building 20% above code (Energy Efficiency and GHGs Reductions over 2017 NECB / 2015 NBC) = 30 POINTS
–Developer agrees that 15% of units will be Accessible = 20 POINTS

Based on the above agreement, 100 POINTS can now be “spent” and the Project will receive ALL of the following incentives:
1) Reduced Down payment – up to 95% Financing available
2) Lower Premiums – only 1.5% Premium charged
3) Longer Amortizations – up to 50 year amortization
4) Recourse or Limited Recourse – Limited Recourse

What works in YOUR market? When you think of this program, think of the following types of properties:
• Affordable Housing
• Market Housing with lower affordability component (e.g. student or retirement)
• Supportive Housing
• Community Housing
• Homeless Shelter
• Emergency Shelter
• Transitional Shelter

CMHC Website for MLI Select Project Funding HERE
CMHC MLI Select FACT SHEET HERE
CMHC POWERPOINT Presentation available on my Dropbox HERE

What I love about this program is that it allows you to borrow the cost of renovations (up to a certain percentage) and add it to the home price, rolling it all into one easy-to-manage mortgage payment. Once you take possession of your new home, you can start the upgrades immediately. This type of mortgage comes with a few extra requirements before signing, and some strict rules to follow, but it runs very effectively if the client is properly guided thru the steps and does not deviate!
What does this mortgage allow?
• Competitive interest rates – The mortgage interest rate for which you qualify is not affected by this program.
• The cost of renovations are added to the home purchase price, with mortgages available up to 95% Loan-to-Value (LTV) or refinances up to 80% LTV
• Amortization for up to 30 years, depending on the Loan to Value and the Lender
What properties are eligible?
• Maximum four units, with at least one unit occupied as the principal residence (3 and 4 unit properties require min 10% down)
• New construction or existing properties
How it works (by example):
• Clients have an accepted offer of $800K – Min Down payment requirement would have been $55K
• Improvements that will be completed – upfront quotes required (see sample form) = $50K
• Improved Value of Home will be $850K. Min Down payment required is therefore INCREASED from $55K to $60K as it is based on the IMPROVED VALUE.
• Mortgage approval is based on improved value plus Insurance Fees e.g.: $850K less $60K down payment= $790K + $31,600 insurance = Must qualify for Mortgage of $821,600
• Clients take possession of the house, Seller receives their proceeds ($800K) and the additional $50K is held at the lawyers until the work is complete.
• Funds are released as soon as buyer can show the work they intended to do is done (inspection).
Important details to note:
• It is absolutely necessary to have firm price quotes prior to finalizing your mortgage— so if you only have one viewing of the property before funding …bring your camera and your contractor!
• You will not receive any funds for the renovations until after the work is completed and reviewed by the inspector/appraiser/bank rep. The improvements must be done on your OWN dime (or on credit that will be paid off with the renovation funds)
• You CAN NOT DEVIATE from the upfront quotes you provided the lender – don’t decide to do windows when you said doors – it won’t be covered.
• Tools or Sweat Equity will not be included (can’t pay yourself).
• Many Lenders require the work done by a licenced contractor
• The work you are doing must INCREASE the value of the home by the same amount in order to receive all renovation funds at the end of the day. Lending value is based on the lesser of the improved property value or the sum of the purchase price plus direct costs of the improvements.
• Single or multiple advance options (excluding initial purchase advance) are permitted and may be managed by Lenders. Improvements must be greater than $40,000 or 20% of the purchase price to be eligible for draws.

Assuming your client wants to buy a house PRIOR to selling their current home, this is how we would look at the deal:

Option 1: If there is down payment available from another source, we can convert the existing home into a rental and try to debt service BOTH houses, forgoing the need to sell prior to possession. If it does happen to sell, I just convert the deal to being sold.

Option 2: As long as there is an accepted offer without conditions on their existing house, MOST (but not all) lenders will Bridge the dates from 30-90 days (depending on the lender). Cost is Prime +4 with fees running from $300 – $2500. Broker Advantage – we know who does, and who doesn’t, offer bridge financing and where to save money.

Option 3: House is listed but no accepted offer has been obtained: Bridge Financing is therefore NOT available, we will instead look for enough equity in the current home to CARRY both properties. Have them call me as there is a formula we have to follow to determine if this scenario will work.

Unlike a standard mortgage, a collateral charge is re-advanceable. That means the lender can lend you more money after closing without you needing to refinance and pay a lawyer. You can keep re-using this charge, and a new charge will only be required if you want to borrow more than the amount that was originally registered. Most chartered banks offer both types of mortgages. A couple (TD Bank and Tangerine) only register their mortgages as collateral charges.
If you have a Home Equity Line of Credit, you have a collateral charge mortgage. A collateral charge can be used to secure multiple loans with your lender. This means credit cards, car loans, overdraft protection and personal lines of credit could also be included.
Pros and Cons of a Collateral Mortgage:

The PROS:
1) If you wish to borrow more money during the term of your mortgage, you can tap into your home equity without the expense of a mortgage refinance. You can save legal fees. (This is assuming of course, your personal credit and income are sufficient to qualify for more money.)
2) If you have a mortgage and a Home Equity Line of Credit (HELOC), it may be structured such that every time you make a mortgage payment, the amount you pay towards your principal balance is added to your HELOC limit. Large available credit, used wisely, is usually a good thing.
3) Collateral charges are often best suited to strong borrowers with lots of equity. They might readily access contingency funds at no cost down the road. This could be by increasing their mortgage loan amount or adding a home equity line of credit to the mix.
The CONS:
1) Some would argue you could be offered less competitive interest rates from your current lender at renewal than you will be from a new lender, as it can b more difficult to transfer the mortgage out as there are legal fees involved. This is slowly changing as the lenders are trying to fight for this business.
2) A collateral charge mortgage is not only a charge on your home, but can include other credit you have with that same lender. These lenders have a “right of offset,” meaning they can collect from the equity in your home on any financial products you have (or co-signed for) that are now in default.

1) Where is your income being derived, compared to the location of the property you are purchasing?

2) Has your job / position been transferred?
a. If yes – Provide proof of transfer
b. If No, continue.

3) Are you allowed to work remotely?
c. If yes – Provide Letter confirming this
d. If No, continue

4) How far is the commute from your place of employment?
e. If commutable / makes sense distance (e.g. 1 hour)
f. If No, continue
5) Do you have a place to stay while on shift?
g. If yes, we may need to use a “Shelter expense” on the deal, even if there isn’t one being charged
h. If No, consider OTHER Financing Options Below
*Keep in mind these questions are similar when talking to someone who is Self Employed. Lenders need to be able to feel comfort in the fact that PAST income levels will not be interrupted. So online businesses are not usually an issue while “Bricks and Mortar” style businesses would be.
Other Financing Options to Consider:

1) SECOND HOME: This program is excellent for high income earners or those who have limited debts/mortgages to pay – perhaps they need a second PRINCIPLE RESIDENCE for themselves due to travel, for their elderly parents, kids in school, etc. Down payment required is as little as 5% down however NO rental income can be used to debt service and the location needs to ‘make sense” (e.g. 2 homes in same city doesn’t make sense unless one is close to University for older kids)

2) RENTAL: Rates are higher, and 20% down is required, however we can then use the rental income to offset the mortgage payment until such a time that the transfer comes thru / income can be supported.

1. Access to more Lenders WITH Unbiased Advise – When you apply for a mortgage at a bank or credit union, you only have access to the products they offer in house. With a mortgage broker, you’ll have access to dozens of lenders.
Brokers don’t work for the Bank – we work for the CLIENT. Secondly, we don’t get paid until the deal funds, so we are MOTIVATED to get that approval!

2. Save Time and Money – a Broker’s JOB is to have their finger on the pulse of every Lender; their products and their rates. This not only saves time – it saves lots and lots of money!

3. Peace of Mind – Even if you end up staying put at your current bank, at least you’ll have done your due diligence and you know you’re getting a good deal on your mortgage.

4. Multiple Borrowers on Title / Maximum number of Rentals (doors) – Many lenders have rules that can negatively affect your client’s deal right out of the gate – this can come up last minute and waste time!
5. Niche Products – Self Employed Stated income, Pensioner Options, Rental Programs, Bridge Financing / Back Up Plans, CHIP Reverse Mortgage, Manulife ONE, Equity Deals, Step or Multi-Component, Lines of Credits, Alternative Lending, Private 2nds – there are so many cool products Brokers have access to and we want to tell you all about them!
6. No cost: A Mortgage Broker is compensated directly by the lender, so most of the time there’s absolutely no cost to the consumer. The only time there may be a fee is when working with a private lender or a lender who will not pay, but we know well in advance of those potential extra costs.
7. Protect your credit score: If you apply to a dozen of lenders on your own, not only is it time-consuming, it can lead to a lower credit score. Here’s why – each time you apply at a lender, it results in a hard credit check. If you do too many credit checks within a short time span, it can lower your credit score. A Broker will typically pull your credit score once, and share this report with the lenders, helping protect the credit score.

8. Property Tax Deferral / Privately Run Strata Corps – Did you know that many lenders do not allow this? We know which lenders will…
9. Expert advice: Brokers live and breathe mortgages, and can help you navigate thru the maze of information and products; we are accustomed to working with borrowers who may have unique needs, such as freelancers or those with poor credit ratings.

Bridge Financing is available with most institutions and long as:
a) Seller has FIRM (unconditional) offer on their current residence and
b) There is a mortgage in it for them at the end if the day
*Rates vary but are approx. Prime +5 during bridge period, some carry an approx. $300-400 fee.

Our Back up Plan, when Bridge Financing is not available, is called an Interalia (or aka “Umbrella”) Mortgage – and this requires a strong equity position. Feel free to have your clients call me for a free consultation; but here are some circumstances where we might use this product:
a. Firm sale on the property being sold, and financing is required for less than 30 days (e.g. no mortgage required at end of day, so there is no lender to provide the above bridging option).
b. Property being sold is listed (not sold) and financing is required for more than 30 days.
c. The home is NOT listed nor has a firm sale.
*Rates run from 6.99% – 7.49%. Broker and Lender fees will apply, this is quoted up front and is based on percentage of mortgage amount.

Deposit Financing is also available!
If your client has a firm sale on their home, this service allows them to access the equity before the completion. Typically this is used for a deposit on a new home, but it can be spent on any taxes, moving expenses, closing costs, or personal expenses. No appraisal • No monthly payments • No credit check • Quick funding • No income verification • No mortgage registration • Electronic signatures accepted • Direct funding to the applicant’s account
Amounts $10,000 – $100,000 Interest rate 1% monthly Processing fee 5% (minimum $1,000)

“Un-Bank-like” That’s how we do things. In the world of mortgages, common sense has become surprisingly uncommon. With 20 years of experience in lending, we understand what works best for our clients – and where to go to get the BEST deal. We are all human and we have all experienced significant life events. Rooted in expert service and human connections, we pride ourselves on creating tailored solutions. Our office can see beyond the paperwork, understand the situation and package the stories in a way that Lenders are scrambling to lend money!
Call us today to find out what we can do for your clients.
Credit issues:
• Consumer Proposal / Bankruptcy discharged 1 day
• Can Pay out Proposals, CRA, Judgements, Collections, Property Taxes with Proceeds of loan
• Limited Credit History: Alternate credit is acceptable via 12 months of bank statements showing rent or mortgage paid, along with alternate trades (no re -established credit on bureau required
• Bankruptcy / proposal documents required upfront: List of creditors, Statement of Affairs, Discharge Certificate
• Remaining in Consumer Proposal, Double bankruptcies & property involved – Private investors available
Income Verification Issues:
• Universal child care benefit
• Child tax credit
• Alimony/child support
• Foster Care
• Bank Stmt deposits
• Rental Offsets / Add Backs for suites of 100%
• Extended debt service ratios from 44%-60%