For clients with credit scores over 620 that meet all lender parameters for Income, GDS/TDS ratios, Credit & Property location – The prime lender pays a fee when the credit score is over 600 and the client does not have to pay a fee as long as the quality of the house, the strength of the income and all the other factors meet the guidelines of prime lenders. In the event the client does not meet prime lender guidelines due to a GDS/TDS ratio that is higher than allowed, income that is not-verifiable or insufficient, equity take-out(increase of mortgage) amount requested that exceeds the $200,000 maximum allowed by insurers in a refinance or location that is not desirable to the lender due to the low total population within 50 kilometers, the guidelines of applicants with non-prime credit profiles that follow come to effect. Any of the preceding very important factors can disqualify an application with a prime lender. In this case, the guidelines for clients with bruised credit or a non-prime credit profile or a beacon score under 600 apply. If an applicant meets all of the Lending Parameters except for one such as Debt Ratios or Credit and we need to use an Equity Program via an A Lender the Guidelines that follow for Alternative Mortgages apply.
Residential Mortgages – For clients with bruised credit or a non-prime credit profile or a beacon score under 600 or for those that use a Pure Equity Program of a Prime Lender Alternative Mortgage Guidelines Apply – B Lenders pay a referral fee and private lenders do not pay a referral fee depending on the term selected. In such a case the standard fee is $3,500 for residential loans up to $232,500 and 1.50% of the loan amount for residential loans over $232,500. For the sake of transparency, in the event a B or Private lender pays a referral fee, I will only charge the difference to arrive at the standard fee of $3,500. For example, on a $200,000 loan where the lender pays a 1% fee of $2,000, I will only charge the difference of $1,500 to arrive at the standard fee of $3,500. A Broker Agency Agreement along with FICOM Form 10 will be completed in order to provide full details and transparency on each transaction.
Commercial Mortgages – Commercial Lenders do not pay a fee. In such a case the standard mortgage broker fee is $3,500 for commercial loans up to $232,500 and 1.50% of the loan amount for commercial loans over $232,500. Please bear in mind that a Retainer(Consulting) fee independent of the mortgage broker fee is charged on every commercial mortgage that is subtracted from the brokerage fee in the event it funds successfully. The main reason a Retainer(Consulting) Fee is charged is that in many cases commercial loans fail to fund due to Location, Weak Financials, Appraisal Concerns, Environmental Concerns etc. The consulting fee varies on a case by case basis. For clients with bruised credit, I do have the ability to negotiate with creditors/collection agencies a favorable settlement for an additional fee of $2,000. My guarantee is that you will save at least $4,000 with your creditors or there will be no additional fee of $2,000 charged. For the sake of transparency, in the event a lender pays a fee, I will only charge the difference to arrive at the standard fee of $3,500. For example, on a $200,000 loan where the lender pays a 1% fee of $2,000, I will only charge the difference of $1,500 to arrive at the standard fee of $3,500. The standard Retainer fee for a Commercial Mortgage is $3,500.
Financial Hardship Cases – The standard fee of $3,500 can be adjusted downwards in the following situations on a case by case basis: a) In a near-foreclosure or pre-foreclosure mortgage application to address the likely lack of equity b) In a mortgage application where the client lacks sufficient equity due to an extraordinary amount of total debt or due to lack of equity based on an appraisal that came in at a much lower than expected value c) For a single mother, father or family that experience a very difficult transition financially due to a number of unexpected financial events including the loss of a job, the loss of a family member or a permanent disability that does not allow them to return to work. d) In the event you experience a financial hardship not included under cases a-c, you should let me know so that we discuss how I can help. The objective is to help a fellow Canadian and to find a solution that improves her/his life in the long-run while forming a long-term relationship.
High Net Worth Program: Most lenders(99%) provide a loan of 80% of the FMV of a home up to 1 to 1.5 million and 50% of the balance. In this unique program, we have the ability to borrow up to 80% of the value of the home for properties valued up to 8 million as long as we qualify based on strong income. The normal broker fee is 1.50% and there is no lender fee. If the lender pays for a 5-year term a referral fee of 0.70% the net broker fee becomes 0.80% in this case as I will subtract the lender referral from the total.
Construction Mortgages : A fee applies that is paid by the client and can be included in the mortgage amount. The fee applies both to prime and non-prime clients as lenders do not pay a fee for construction mortgages. The standard fee is $3,500 for residential and commercial loans up to $232,500 and 1.50% of the loan amount for residential and commercial loans over $232,500. The recommendation is to go directly to a lender to be able to avoid the fee involved in a construction mortgage.
Business Loans: There is loans up to the amount of $150,000 available for start-up and existing businesses via government and non-government entities. The standard fee to prepare a complete loan package and receive approval is $3,500 and is included in the amount of the loan. The fee is only paid at the conclusion of a successful loan application.
Appraisal & Title Search – They are both the responsibility of the borrower. The cost of an appraisal is between $300-$600 depending on the location for residential properties and anywhere from $3,000-$10,000 for commercial properties. A title search costs between $25-$30 and is a requirement with a lender approval to confirm that there is no other liens on a property by a Builder, Canada Revenue or any other third party. The appraisal and the title search can be ordered at the same time from the selected appraisal firm. Note that Appraisal Reports can be released to a client at the conclusion of a mortgage. The client can contact the Appraisal Firm at the closing of the mortgage to officially request it. The Appraisal Firm will request my permission. My permission will be granted and the Appraisal Firm will release it upon confirmation that the financing has been completed successfully or unsuccessfully. The release takes between 24-72 hours upon request from the Appraisal Firm.
Fees when a client has a non-prime or bruised credit or a beacon score under 600 are paid when the mortgage funds and never in advance. The mortgage broker fee is covered by loan proceeds when there is sufficient equity in a property. Alternatively, it is covered from client’s personal funds in the event of a purchase,refinance or construction mortgage where there is no extra equity in the property.