Experts in Complex Mortgages

What exactly is a complex mortgage?

A complex mortgage often involves different income streams or non-typical details (personal or financial) that need to be considered to arrive at a cost- or time-saving mortgage solution. Some banks may not have the flexibility you need from their assembly line of mortgages. Or, they may not have a team dedicated to helping you (like we do).

Your 'complex' mortgage application still needs to meet certain requirements:

• A minimum mortgage loan of $10K
• You live in a centre with a population of at least 25K or just outside of a major centre
• You have a credit score of at least 600 or above
• An LTV (loan-to-value) of not greater than 75% (you have at least 25% equity in the home)
• For a home purchase, you have a down payment of at least 20%

Note: LTV is calculated by dividing your mortgage loan by your home's market value.

Think you're complex? Here are some mortgage scenarios we've aided.

Your situation is unique. Yet, it may fall in line with problems we often see.

Read these examples below to get an idea of how we helped make our clients (mortgage) life a lot easier.

If you don't neatly fit into these categories, worry not, we make new mortgage molds every day. Fill out our form or give us a call today to see if we can help you.

Bridge financing

A bridge loan is a short-term loan that helps you transition between buying and selling a home when the closing dates overlap — not all lenders provide them.

This type of complex mortgage allows you to temporarily borrow the down payment from your home for the new purchase. We can offer a seamless, fast fix that meets deadlines and saves both deals while providing peace of mind.

Example

A client bought a house and sold his old home, but he has to take possession of the new home before the sale closes on his old one. His lender couldn't provide a bridge loan, and he thought he might have to cash in his investments to cover the funds. We provided a temporary loan to bridge the two-week gap, and he left his investments untouched. Problem solved.

Consolidate debt

(Mortgage) life can get complicated. Perhaps you bought a rental income property to help pay off another mortgage or started a business, and suddenly find your finances too stretched paying off various debts.

We help many of our clients consolidate their debt into a short-term mortgage solution that improves their credit score and simplifies the details so they can focus on their goals.

Example

Our good-credit client was living with his mom so he could rent out his condo while he started a new business. His property had a low LTV, and we helped him with a full refinance to bring all his debts and mortgage into one lower-interest payment. Once he gets his business off the ground, he'll be able to qualify for another refinance for a longer-term mortgage. Problem solved.

Second or third mortgage for extra funds

Refinancing before your renewal to borrow from your home equity means breaking your term, which can incur costly penalties, plus, you may have to give up your lower rate.

Instead, adding a second or third short-term mortgage may make more sense, but is not always easy to obtain from a bank. We have the flexibility to consider these add-ons for your situation, saving you money and time while accessing the funds you need now.

Example

A client has a $700k mortgage with a 2.0% 5-year fixed rate, maturing in 2025. He needs $300K now and wants to refinance, but in doing so, he would lose his low contract rate and pay a hefty penalty to break his mortgage. So instead of a new bigger mortgage of $1M at 5.39%, we're providing a smaller second mortgage for $300K on a 1-year term. Both terms will be up at the same time, and he'll renew with us for the entire amount without penalty with a cost-saving long-term mortgage. Problem solved.

Quick loan funding to save a purchase deal

Has your lender backed out at the last minute because of document difficulty? Are you moving locations?

When you think your mortgage funding is in place and find out it's not, or you suddenly need to buy so that you can move, the complexity involved can be stressful.

We often help clients save a purchase deal quickly with a short-term mortgage fix that reduces stress or allows more freedom to move on with their plans.

Example 1

Clients came to us needing a mortgage loan fast to make a deposit on a home in a location they were moving to soon. Even though their home was already listed, they wouldn't be able to sell in time to secure the home they had found that was in the right area, at the right price, and that suited their time frame. They also wanted to use the loan to pay off other debts to simply their finances. We provided a 3-month term that allowed them to buy their new home with enough time to sell their old one. Problem solved.

Example 2

For a new build, this client with good credit and a low debt load had lined up approval with a lender but was delayed at the last minute due to questions about her NOA (Notice of Assessment tax document). We looked at her NOA, verified employment and income from the accountant, and everything matched. The builder would not grant an extension in time for the original lender to approve, so we facilitated a quick close for her with a 3-month term so that she didn't lose her deposit. Problem solved.

Need time to find a new home before selling current home

Buying and selling a home at the same time can be stressful. There are times when a client wants the funds upfront to buy first for peace of mind before listing their home.

A short-term loan that is paid out with the sale of the home can simplify the complexities of upsizing, downsizing, or moving to a new city.

Example

A client came to us with a fair credit score and owned a $1.5M home with a small mortgage of $300K. A recent widow, she wanted to downsize to a condo for less maintenance but needed time to grieve and find the right place. We helped her refinance with a one-year term so she could have money to buy a condo as a cash purchase while keeping her current home until she was ready to sell. Problem solved.

BFS and non-traditional income sources

From self-employment income (Business For Self) to contract or commission-based to alimony and child support payments — complex income sources don't always line up into a 'steady one employer, two-year history' qualification that big banks prefer to see.

And, sometimes, you run into a tough spot, and you need a short-term mortgage solution to help see you through.

If your credit is in good standing and you have home equity, we can consider your whole financial picture, including your varied income sources or recent changes.

Example 1

Our client started a graphic design business 2 years ago, but her son was in an accident, which affected her work schedule as she cared for him. She had a private second mortgage for a rental property up for renewal and wanted to pay it out because they kept charging excessive renewal fees. She had good credit, and we provided a one-year mortgage solution to allow her time to increase her work contracts to re-qualify for a full refinance in a year (which she did, with us at a great long-term rate). Problem solved.

Example 2

This borrower was BFS and semi-retired. He was looking for a second mortgage to pay off debts while renovating his house and to place a deposit on a condo to move into so he could sell his property. He gave a timeline of 6 months, but we provided a one-year mortgage solution to allow enough time to get it done. Problem solved.

Investment and minor upgrade funds

Your funding needs may fall outside the bank's 'traditional' comfort zone and require a more flexible approach. For example, if you own more than one home and want to complete minor upgrades to boost equity for a future sale, or you'd like to take advantage of an investment opportunity (e.g. buy a rental property) without redoing your original mortgage.

We can assess your application details and the timing of the needed funds to see if a short-term solution works for you.

Example 1

These clients, with excellent credit and 65% LTV, put their newly renovated home up for sale. They found a new home and bought it (will be their primary home) but wanted to start renovating right away with the intention of selling it in a year. We provided a mortgage loan solution that gave them the funds to start renovations before their old home sold. Once the current listed home sells, they will pay down most of the loan and finish the renovation on their other home. Once their other home sells, this loan will be paid out in full. Problem solved.

Example 2

A long-time client with great credit owned a home and a couple of other rental income properties that had strong cash flow. He was renovating a separate commercial building he owned to be completed in 9 months, at which point, he'll sell. He wanted to borrow $600K from his home equity to help complete the renovations and pay it back with the commercial sale. We provided a 9-month mortgage loan so that he could continue with his plans. Problem solved.

Vendor Take Back Mortgage (VTB)

This type of mortgage allows a seller to lend money to the buyer for the home purchase instead of going to a bank.

The seller provides the 'financing,' which can simplify the process for the buyer, especially if they're having difficulty meeting the down payment or income requirements needed for a typical mortgage approval.

However, in these cases, we can often help the buyer get the funds they need to buy the home (due to our more flexible criteria), which allows both the buyer and seller to close the deal.

Example

A client recently wanted to sell their home, pressured by an upcoming job move. They found friends of the family they wanted to sell to, but as first-time buyers, they didn't have enough down payment saved up for such a quick turnaround. The seller came to us for a solution, and we were able to provide the buyers with a short-term mortgage that allowed them to buy the home. Once the buyers have a chance to build more equity, they'll refinance at renewal to pay out the loan in full. Problem solved.

Going from a rent-to-own contract to a mortgage

A rent-to-own contract, with the intention of eventually buying the home, is set for a certain time period. The home needs to be purchased at the end of the contract or the potential buyer risks losing both their initial deposit and rent amounts saved.

Rent-to-own mortgages are considered a complex mortgage situation. Depending on the original contract, many traditional lenders decline these types of mortgage loans outright, especially if the contract wasn't registered on the mortgage title at the start.

We may be able to customize a solution that works for you now and allows you to refinance with a bank later.

Example

A couple came to us panicked about their rent-to-own contract. It was expiring soon, but they hadn't found a lender that would approve them for the mortgage. They had good credit and with their deposit and rent amounts saved, they had the required down payment. We took their steady income and credit standing into consideration to offer a one-year mortgage that allowed them to buy the home with the intention to refinance with a bank at renewal (they ended up coming back to us for a long-term mortgage at a great rate). Problem solved.

Rental property financing solutions

Owning more than one property can sometimes lead to complex financing issues if life gets in the way, like property damage or income disruption.

Unlike a big bank, we have more flexibility to consider some stronger details over other ones to see the whole potential of the client to pay their mortgage, whereas a big bank might decline on principle.

Example 1

Our client purchased a Calgary new-build condo as a rental property and was looking for a second mortgage on her existing rental to cover the budgeting shortfall and fees owed. We made an exception for the 80% LTV (usually only 65% LTV is allowed) based on her other strong application details. Problem solved.

Example 2

This client has 3 properties in Toronto. She's not currently working and 2 properties are vacant due to extensive water damage. With a low LTV (higher equity built up) on her properties and fair credit, we provided a short-term mortgage to help her consolidate debt and allow her to complete renovations to sell the properties and pay back the loan. Problem solved.

Divorce payout to keep the home

Dealing with a divorce can get even more complex when homeownership and mortgage finances are involved. During this stressful time, we often help clients by providing short-term funding to ease payouts and homeownership title transfers.

Example

One of our clients was going through a contentious divorce. Their partner was supposed to pay the car loan and credit card but didn't. They received advice from a friend not to pay it on their partner's behalf because it would make things worse — this advice reflected badly on their credit, even though everything else was paid on time. They had a lot of equity built up in the home and wanted funds quickly to pay out the outstanding loans and their partner for the share of the home to finalize the title transfer, which would also help recover their credit position. The location was a bit out of the way, but we made an exception based on their details. Problem solved.

Pay taxes owed before switching or home purchase

If you owe federal taxes to the CRA (Canada Revenue Agency) or property taxes, most lenders, including big banks, won't approve a mortgage loan until the taxes are shown to be paid — and they won't allow the mortgage funds to be used for payment.

We may be able to provide a short-term payout solution that helps you clear the decks for a larger mortgage loan.

Example

This client's mortgage approval for a new home was held up because the lender insisted his CRA/property taxes be paid for the taxation year. We were able to provide a short-term loan that allowed him to pay CRA/property taxes through his lawyer. The client intends to pay out our loan in full through a later refinance. Problem solved.

Pre-build complications

Clients who placed a deposit on a pre-build or new-build construction contract a few years ago are running into complications from higher rates and raised purchase prices — when the builder comes back to them upon completion requiring more money to seal the deal. Many banks will only lend on the original value, not the current higher one.

We may be able to offer a funding solution based on the actual home value to avoid losing your deposit, covering the shortfall to complete your purchase.

Example

Our excellent-credit clients had purchased a pre-build condo in Calgary as first-time home buyers for the purpose of renting out. They had been told by the builder that it didn't matter that it was a rental and they could place 10% down. When construction finished a few years later, and they went to close the deal, they were told they indeed needed 20% down as a rental. Not having the funds to make up the shortfall (and not able to use gifted funds from family toward a rental), they faced losing their deposit and even being sued. As we were able to lend based on the current value vs. the original value, we provided a one-year term for 75% of the appraised value, which made up the shortfall and allowed them time to reconcile their finances and refinance later with us at a great long-term rate. Problem solved.

What can you expect with a complex mortgage solution?

We customize your mortgage based on your details. You can expect to provide and fill out different paperwork than with a big bank, and you may see different rates and fees compared to traditional mortgage products.

Your broker will outline your options with complete transparency for your clearer decisions — and so you know what to expect moving forward.

What is an alternative lender?

The alternative lending space is pretty much any lender or mortgage product with more relaxed qualification requirements than the stricter ones required by 'traditional' lenders or products.

Your mortgage solution will likely be with an alternative lender, but not always, as some 'traditional' lenders provide products that may fit your needs.

Do we deal with private lenders?

We don't use private lenders for your mortgage solution with good credit.

This lender type is often considered a last resort, as many charge high rates and fees and don't always offer a renewal term.

For homeowners with bad or challenged credit, a private lender solution may be a viable option — please read more here.

We handle complexity with the greatest of ease.

With True North, you're in good hands. We're one of Canada's top brokerages, for over 17 years now.

We can offer you fast outside-the-box solutions because we're innovators in the mortgage lending space (always have been).

Our highly trained, unbiased, salaried brokers have access to several traditional and alternative lenders and mortgage products.

Plus, our over 15,000 5-star reviews from happy clients (the most in the industry by far) can attest to our ability to find the right solutions for your needs while saving you time and money.

Can we help you break the mortgage mold? Please fill out our form or give us a call — and a friendly, expert mortgage broker will get back to you.