Experts in Complex Mortgages

What exactly is a complex mortgage?

A complex mortgage is one that can involve different income streams or non-traditional sources, multiple properties or mortgages, or outside-the-box details (personal or financial) that don't fit within traditional lending criteria.

Complex mortgages usually don't fall into the category of bad credit mortgage needs.

Depending on the lender or product, the criteria for approval for a complex mortgage can vary:

• Usually for credit scores between 660 and 500
• Mortgage balance minimum is usually 50K
• A 20% down payment or a loan-to-value (LTV) of 80% or less
• Having equity in your home allows most alternative and private lenders more flexibility in other approval criteria.
  

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.

If a bank says 'no', you could go directly to an alternative or private lender — but your options would already be limited, and you'd be unaware if a better option exists to help you save more cash and stress.

And, they may not have a team dedicated to helping you — like we do.

Here are some examples of how we helped make our clients' (mortgage) lives a lot easier.

If you don't neatly fit into these categories, worry not, we make new mortgage moulds every day. Apply with us 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 had to take possession of the new home before the sale closed 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 found a temporary loan to bridge the two-week gap, and he left his investments untouched. Problem solved.

Consolidate debt

Suddenly feel that you're paying off too many credit bills, or the interest amounts are gaining ground? Perhaps you bought a rental income property to help pay off another mortgage or started a business, and suddenly find your finances are too stretched to pay 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 consolidate 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 a lower rate.

Instead, adding a second or third short-term mortgage may make more sense, but it is not always easy to obtain from a bank. We can source this add-on for your situation, saving you money and time while providing the funds you need now.

Example

A client had a $700K mortgage with a good mortgage rate, maturing in 3 years. He needed to access $300K for a business project through a refinance, but in doing so would have to pay a hefty penalty to break his mortgage, and then pay a higher rate on a new, bigger mortgage. We helped him secure a second mortgage with an alternative lender at a reasonable rate, allowing him to keep his first mortgage untouched. Both terms will be up at the same time, and he'll renew for the entire amount without penalty. Problem solved.

Quick loan funding to save a purchase deal

Has your lender backed out at the last minute due to document issues? 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 quickly close (or save) a purchase deal with a short-term mortgage solution, reducing stress and allowing them to move on with their plans.

Example 1

Clients came to us needing a mortgage loan fast. They had to move for a job, and wanted to make a deposit on a home they were buying in their new location. Even though their current home was already listed, they wouldn't be able to sell in time to secure the house they found. They also wanted to use the loan to pay off other debts to simplify their finances as they moved. We provided a short-term fix 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 reviewed her NOA, verified her employment and income with 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 short-term solution to prevent her from losing 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 up front 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 $300K mortgage. 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 1-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 income to alimony and child support payments, traditional and non-traditional income sources don't always line up into a 'steady one-employer, two-year history' qualification that big banks prefer to see.

True North Mortgage now offers Compass Mortgage™, specifically designed to accept a broader income picture and more complex details, including high-net-worth individuals and those needing to consolidate debt or handle additional properties.

If Compass Mortgage isn't the right fit, we can offer a solution among the many lenders we deal with.

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 breaking your original mortgage.

We can assess your application details and the timing of the funds you need to determine whether 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 found a mortgage solution that provided them with the funds to begin renovations before their old home sold. Once the current home sells, they will pay down most of the loan and finish renovating their other home. Once their other home sells, this loan will be paid out in full. Problem solved.

Example 2

A longtime client with great credit owned a home and a couple of other rental properties with strong cash flow. He was renovating a separate commercial building he owned, which he planned to complete in 9 months, at which point he would sell. He wanted to borrow $600K from his home equity to help complete the renovations and repay it with the commercial sale proceeds. We found a short-term solution so that he could continue with his plans. Problem solved.

Vendor Take Back Mortgage (VTB)

A Vendor Take Back 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 find a solution to secure the funds they need to buy the home, allowing 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 saved for a down payment for such a quick turnaround. The seller came to us for a solution, and we found a short-term mortgage for the buyers. Once the buyers have built more equity, they'll refinance at renewal to pay off the loan in full. Problem solved.

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

A rent-to-own contract, intended to eventually lead to the purchase of the home, is set for a specific 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 complex. 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 saved deposit and rent, they had the required down payment. We found an alternative lender who took their steady income and credit standing into account to offer a 1-year mortgage that allowed them to buy the home with the intention of refinancing 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, especially if complicated by property damage or income disruption.

We have access to lenders who are flexible and can consider stronger details over weaker ones to assess the client's full potential 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 found an exception to the 80% LTV limit (typically, only 65% LTV is allowed) based on her other strong application details. Problem solved.

Example 2

This client had 3 properties in Toronto. She wasn't currently working, and 2 properties were vacant due to extensive water damage. With a low LTV (higher equity built up) on her properties and fair credit, we found a short-term mortgage to help her consolidate debt, complete renovations, 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 sourcing short-term funding solutions to ease payouts and title transfers for homeownership.

Example

A client was going through a contentious divorce. Her partner was supposed to pay the car loan and credit card, but didn't. She 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 her credit, even though everything else was paid on time. The home had built up equity, and we found a mortgage solution to help her quickly pay off the outstanding loans and her partner's share of the home, finalize the title transfer, and help recover her credit position. 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.

Among our suite of lenders, we can often source a tax payout solution to help clear the decks for a new mortgage loan.

Example

A client's mortgage approval for a new home was denied by a lender that insisted his CRA/property taxes be paid for the taxation year. We were able to find a short-term mortgage that allowed him to pay CRA/property taxes through his lawyer. The client intends to pay off the loan in full later through a refinance. Problem solved.

Pre-build complications

Clients who placed a deposit on a pre-build or new-build construction contract a few years ago might run into complications due to higher rates or higher final purchase prices — especially if the builder requires additional funds upon completion to seal the deal. Many banks will only lend on the original value, not the current higher one.

We may be able to find a funding solution based on the home's actual value to avoid losing the deposit and cover the shortfall to complete your purchase.

Example

Our excellent-credit clients had purchased a pre-build condo in Calgary as first-time home buyers home buyers for the purpose of renting out. They had been told by the builder that they could place 10% down, despite the rental intentions. When construction was complete, they went to close the deal, and the builder demanded 20% down instead. Not having the funds to cover the shortfall, they faced losing their deposit and even being sued. We found a lender that offered a 1-year term at 75% of the appraised value, which covered the shortfall and gave them time to reconcile their finances and refinance later at a better long-term rate. Problem solved.

What can you expect with a complex mortgage solution?

We care and work hard to customize your mortgage to your specific 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 to help you make 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 those of traditional lenders or products.

Your mortgage solution will likely come from an alternative lender, though not always, as we may find a traditional lender that offers a product that fits your needs.

Do we deal with private lenders?

Yes, we do. Sometimes, a private lender is your best option. This type of lender often charges high rates and fees and doesn't always offer a renewal term.

For homeowners with bad or challenged credit, a private lender solution can offer a homeownership lifeline. Please see our Bad Credit solution page for more info.

Complex coming in, simplified going out.

With True North, you're in good hands. As one of Canada's top brokerages for over 19 years now, we can offer you fast, personalized solutions from our suite of lenders. And our highly trained, unbiased, salaried brokers put your mortgage needs first, for a mortgage experience that breaks the mould.

Don't take our word for it. We have over 17,000 5-star reviews from happy clients (the most in the industry by far) who saved more with a simpler mortgage process.

To apply, please fill out our form — and a friendly, expert mortgage broker will get back to you!