Click on the link below for more detail https://www.volitionprop.com/quickstart/

1. Richard Tartaglia
Mortgage Agent, VINE Group
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
WORKING WITH A
LENDER IN 2020
Richard Tartaglia
Mortgage Agent, VINE Group
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
WORKING WITH A
LENDER IN 2020

2. Regulations?
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
The What if’s?

3. Strategic Investors adjust
with changes in the market
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

4. • Choosing a Financing Partner (Bank vs Broker)
• Canadian Lending environment
• DNA of a mortgage application
• Strategic Mortgage Financing - BLUEPRINT
• Making your mortgage application a success
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
AGENDA

5. CHOOSING A FINANCING PARTNER
BANK VS. BROKER?
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

6. • Financing is the most important part of the real estate process
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
BANK VS. BROKER

7. CANADIAN
LENDING ENVIRONMENT
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

8. • 5 year Canada bond yield is a leading indicator to the 5 year fixed rate
• Yield & Bond Price are inversely related
• Variable rates and the Bank of Canada (BoC)
• Fiscal Policy & BoC
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDING ENVIRONMENT

9. • Big Banks (A)
• Monoline Lenders (Insured/Insurable) (A)
• Credit Unions (A)
• Alternative Lenders (B)
• Private Lenders
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDER OPTIONS

10. BIG BANKS
• Scotia, TD, RBC, CIBC, BMO & National Bank
• Familiarity or brand
• Typically use their own funds, so it’s easier for exceptions when
needed
• Competitive pricing
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDER OPTIONS

11. MONOLINE LENDERS
• Non-bank lenders
• First National, MCAP, RMG, RFA, etc.
• Can only access via 3rd party providers (brokers)
• Better pricing (lower overhead)
• Unique solutions
• Use investors for financing (pension funds, etc.)
• Can have lower penalties than banks
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDER OPTIONS

12. CREDIT UNIONS
• Meridian, DUCA, Desjardins etc.
• Service local communities very well
• Able to get exceptions (own funds)
• Provincially regulated – different rules
• OSFI (office of the superintendent of financial institutions) – Federal (Stress Test)
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDER OPTIONS

13. ALTERNATIVE LENDERS (B LENDERS)
• Equitable Bank, Home Trust, Optimum ETC.
• Being used more often in today’s environment as it’s now harder to qualify
• Common sense lending
• Rates typically 1% - 1.50%+ higher
• Fees are 1% on average
• Accept lower credit scores
• Larger portfolios
• Self-employed friendly
• Bank account statement vs. T1’S/NOA’S
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDER OPTIONS

14. PRIVATE LENDERS
• Lending on asset
• Up to 80% LTV (sometimes 90-100% with cross collateral)
• Rates 8%+ with fees est. 3%+
• Interest only payments
• Low doc requirements
• Construction financing/Flips
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
CANADIAN LENDER OPTIONS

15. DNA OF A
MORTGAGE APPLICATION
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

16. INCOME:
• Salary employed (T4’s, paystubs)
• BFS/Commission Employed (Last two-year T1’s + NOA’s)
• Part-Time
• Investments/Rental Income
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

17. RATIOS – GDS/TDS
• TDS (Total Debt Servicing)
 All expenses divided by all income
 Ideally 40-42%
• GDS (Gross Debt Servicing)
 Subject property expenses divided by all income
 Ideally 35-39%
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

18. GDS
MAX 35%
Verifiable Employment Income
+
50%-75% of rental income
 Mortgage payment
 Taxes
 Condo Fees
 Heat
TDS
MAX 42%
Verifiable Employment Income
+
50%-75% of rental income
 All other debts
 Credit cards
 LOC’s
 Other mtgs
 Car loans
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

19. EXAMPLE (Primary Residence Financing)
• Client earns $100,000 or $8,333.33/month verifiable income
• Has car loan of $500/month
• Needs $300,000 mortgage: stress tested payments of $1,635/month
• Subject Property Taxes + Utilities: $400/month
• Total Subject Expenses: $2,035/month
• Total Expenses: $2,535/month
• GDS: 24.4% ($2,035/$8,333.33)
• TDS: 30.4%($2,535/$8,333.33)
• Max mortgage is around $500K (39% GDS/44% TDS)
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

20. DOWN PAYMENT
• Minimum 20% down payment
• Show 30-90 day source history
• Consolidate if possible prior to commencing process (simplify statements)
• Bring overseas funds to your Canadian account yesterday
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

21. CREDIT
• Credit scores range from 300-900
• Reported by Equifax and Trans Union
• A Credit score above 680 is ideal
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

22. ASSET TYPE
• Where is the property located?
• Is it in an area of less than 50,000 people?
• What is the condition of property?
• Are they legalized units or self-contained?
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

23. NET WORTH
• Lenders have a net worth requirement for RE investors
• General rule of thumb is 10% for EACH rental property owned (in addition to
to the down payment)
• Equity in a primary residence counts
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
DNA OF A MORTGAGE APPLICATION

24. BLUEPRINT
BEING STRATEGIC WITH
YOUR FINANCING
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

25. 1 2 3 4 5 6 7 8
Non-Bank
Scotia
TD
National/CIBC
RBC
Home Trust
PLAY IT LIKE A CHESS GAME
1 2 3 4 5 6 7 8 Doors/properties
Multi-Family
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

26. 1-5 PROPERTIES:
• Most lenders have a “Global Limit” of 4 rentals
• Monoline lenders for less than 20% down payment
• Preferred pricing and solutions
• Consider a refinance to optimize ratios
• HELOC’s for rentals
• Split mortgages
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
BLUEPRINT - STRATEGIC FINANCING

27. 6-10 PROPERTIES:
• Reduced lender options & restrictions posed by lenders that are available
• Up to 75%-80% LTV
• 25-35 year amortizations available
• Competitive rates (possible rental premiums)
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
BLUEPRINT - STRATEGIC FINANCING

28. 6-10 PROPERTIES:
• Full portfolio should have DCR of 1.10+
• (DCR) Debt Coverage Ratio = (Expenses + Mortgage) / Rental income
• Credit unions (NO global limit)
• Consider a refinance before you buy the 5th or 6th property to maximize lender
options
• More options beyond 10 properties!
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
BLUEPRINT - STRATEGIC FINANCING

29. MAKING YOUR MORTGAGE
APPLICATION A
SUCCESS
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

30. • Doc requirements and Rules are now harder, so you must be organized!
• Create cloud storage for:
 Recent mortgage statements, tax bills, leases for all properties, etc.
 Updated T1 generals + NOA’s (last two years)
 Updated savings/investment statements
• Updated Paystubs + Letter of employment
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.
MORTGAGE APPLICATION SUCCESS TIPS

31. SUCCESS
doesn’t just happen,
it’s planned for.
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.

32. THANK YOU!
www.vinegroup.ca
richard@vinegroup.ca
416.629.8896
WE’RE IN THE PEOPLE BUSINESS, WE JUST HAPPEN TO DO MORTGAGES.