Mortgage Terms
Get a Better Understanding of Mortgages!
Collateral vs Standard Mortgage
When securing a mortgage in Canada, most borrowers focus on interest rates, amortization periods, and lender terms. However, an often-overlooked distinction—whether a mortgage is registered as a collateral charge or a standard charge—can have significant implications...
Closing a Mortgage
Closing a mortgage is a bit like the final stretch of a marathon. You’ve put in the miles—finding the property, securing the offer, getting your approval—and now you’re eyeing the finish line. But between that final “yes” from the lender and moving into your new home (or getting those refinance funds), there’s a whole lot of behind-the-scenes action operating within a ‘black box’ that most buyers and realtors never see.
Commercial vs Residential Rates
Commercial vs Residential Rates: So you’ve got a few rentals under your belt, things are going smoothly, and now you’re eyeing your next big play—maybe a sixplex or a mixed-use building. You reach out to your lender, expecting the same ol’ mortgage experience, and then it hits you:
“Sorry, this is a commercial deal. The rate will be higher.”
Higher? How much higher? And why?
Surviving Deep Due Diligence
If you’ve ever had a mortgage deal that felt like it was sailing smoothly through underwriting, only to suddenly slow to a crawl with more questions, more documents, and more back-and-forth than you thought possible, you may have run into deep due diligence.
From Residential to Commercial
So you’ve been picking up rental properties over the years—maybe it started with a duplex, then a triplex, and next thing you know, you’re sitting on a healthy portfolio under your holding company. You’ve figured out the tenant game, you’re cash-flowing, and the equity’s stacking up nicely.
But then one day, you’re applying for financing on property number six, and your lender says:
“Sorry, this now falls under commercial lending.”
Divorce Documents & Mortgages
So let’s walk through what lenders are actually asking for, why it matters, and what you can do if you don’t have formal divorce paperwork.
Using a Holding Company
You’ve been steadily growing your real estate portfolio, collecting keys and cash flow along the way. You’ve got the landlord rhythm down, maybe even set up a joint venture or two. But then someone at a networking event leans in and asks:
“So… are you holding those properties in a company yet?”
It’s a loaded question—and one that might leave you scratching your head. What is a holding company? And should you be using one?
Get Your Lender’s Permission
If you already have a mortgage on your home—especially with a bank or a prime lender—adding a second mortgage without getting their blessing can create a legal mess you don’t want to deal with. This is one of the most common mistakes homeowners and even realtors make when dealing with short-term financing.
What Is a POTL? And Why You Should Care
That “freehold” might actually come with something called a POTL—a Parcel of Tied Land—and it’s something every buyer, realtor, and mortgage agent should understand before signing on the dotted line.
Paying Out a Private Mortgage
You’ve probably heard the mantra: “Get out of your private mortgage as soon as you can—move to something cheaper!” And it’s true—most mortgage professionals (myself included) spend our days helping clients transition from private to alternative to prime lending. It’s what we call the mortgage ladder.
Are You a “First-Time Buyer?”
Buying your first home is one of life’s big milestones, but here’s the kicker: being a “first-time buyer” isn’t as cut-and-dry as it sounds. Depending on the program, you might be considered a first-time buyer even if you’ve owned a home before. Crazy, right?
Subject and Non-Subject Properties
If you’ve ever worked with a mortgage agent or lender, you know the paperwork can feel endless. But one topic that often catches people off guard is this: lenders don’t just look at the property you’re buying—they want to know about all the real estate you own. Whether it’s your cottage, a rental condo, or a student house in your kid’s university town, these “other” properties matter.
The Costs of Getting a Mortgage
Most people focus on one thing when thinking about a mortgage—the interest rate. And yes, your rate matters, but it’s not the whole picture. Whether you’re buying, refinancing, or switching lenders, there are other costs directly tied to getting a mortgage. Some are mandatory for every borrower, while others only apply in special situations.
When Is a Full Appraisal Required?
If you’ve been through the mortgage process a few times, you’ve probably noticed that not every deal requires the same level of scrutiny. Sometimes lenders are perfectly happy with an automated valuation or a quick drive-by. Other times? They want the full treatment—a boots-on-the-ground, inside-and-out, full appraisal.
Deposit Essentials
When you think about getting a mortgage, your mind probably jumps straight to rates, payments, and maybe legal fees. But there’s another set of costs that often catches people by surprise—home insurance and utility deposits. These aren’t massive costs, but they’re essential. Without them, your lender might not release funds, and your home might stay dark and cold when you move in.
Property Tax and Interest Adjustments Explained
When you’re arranging a mortgage, most people focus on the big-ticket items: interest rates, down payments, and legal fees. But there are two smaller line items that can catch you off guard if you don’t know about them—
Why Your Mortgage Might Have a Brokerage Fee
Brokerage Fees. When it comes to mortgages or anything else, nobody loves fees. You’re already thinking about interest rates, closing costs, and moving expenses, and then your mortgage agent (that’s me) mentions a brokerage fee. Your first reaction might be, “Wait, why am I paying you when the lender pays you too?” That’s fair—it’s a question I hear a lot.
Mortgage Fees Uncovered
When you’re arranging a mortgage, the words “lender fee,” “brokerage fee,” or “commitment fee” can feel like a foreign language. And if you’re thinking, “Why are there so many, and who’s pocketing what?” you’re not alone. These fees aren’t random add-ons; each one serves a different purpose, and knowing what they mean can save you a lot of confusion (and maybe a bit of stress).
Mortgages: Consumer Proposal & Bankruptcy
In Ontario, Canada, when a mortgage lender mentions that a “pricing adjustment may apply to price to risk for bankruptcy/proposal in the last 12 months,” it means that the lender is considering the increased risk of lending to someone who has declared bankruptcy or made a consumer proposal within the last year. To compensate for this higher risk, the lender may adjust the pricing of the mortgage. This typically results in a higher interest rate or additional fees for the borrower.
What is a ‘Switch’?
In the context of mortgages in Ontario, a "switch" (also known as a "transfer") refers to the process of moving your existing mortgage from one lender to another without changing the remaining balance or term of the mortgage. This can be done for various reasons, such...
Who’s Buying Real Estate Right Now?
If you’ve been chatting with clients or colleagues lately, you’ve probably noticed that the question on everyone’s mind is: Who’s actually buying real estate right now? It’s a fair question. The headlines are full of doom and gloom about affordability, interest rates, and a supposed ‘market freeze’ — yet deals are getting done.
The Consequences of Walking Away
Trees don’t grow to the sky; and neither do real estate prices. Sometimes, real estate prices go down. This can be particularly troubling when it comes to new construction. There is a time lag between when the home is ‘purchased’ and when the home is completed and the deal can ‘close’. During this lag time, substantial changes can occur in the real estate market that causes home prices to fall; sometimes meaningfully. When that happens, does it make sense for a new home buyer to close the deal, or should you walk away?
Featured Publications
Articles
- Extended Amortizations and Hypothetical Calculations
Office of the Superintendent of Financial Institutions (OSFI) - Minimum Qualifying Rate for Uninsured Mortgages
Office of the Superintendent of Financial Institutions (OSFI) - Residential Mortgage Underwriting Practices and Procedures
Office of the Superintendent of Financial Institutions (OSFI) - Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances Financial Consumer Agency of Canada
Book: “The Program”
- Part 1 – Building Your Down Payment
- Part 2 – Mortgage Payoff Strategies
- Part 3 – Building Wealth Through Real Estate