Sheldon Brown Mortgage Broker Canada

Traditional‎ Bank / Prime Mortgages

Typically lower interest rates when comparing to the other types of lending. The applicant would normally have established credit in good standing.

Mortgage options for Self-Employed

With nearly 20% of all income earners in Canada being self-employed (at least part-time), we often wonder why it is so difficult for this growing demographic to obtain a mortgage. The first issue is the fact that income is not always easy to prove. Also, many business owners are motivated to expense as much as possible in order to minimize their taxes payable, which is something many lenders do not recognize. In order to obtain a self-employed mortgage, most lenders require that personal tax Notices of Assessment from the past 2-3 years be included with the mortgage application. Those who are able to provide this proof of income can generally access the same mortgage products and rates as traditional borrowers, while those who cannot must at least have a good credit history and provide a minimum down payment of 10%.  

Vendor take-back (VTB) mortgage

In this low-climate rate this type of mortgage isn’t all the prevalent, but there was a time when it was sellers would offer this type of mortgage option as an incentive to buying their home. A VTB mortgage allows a buyer to purchase a property with the help of the sellers, who lend the buyer a portion of the purchase price. This type of loan can often come with favourable or flexible terms, such as being able to pay off the balance of the loan without penalties. These types of loans were once quite common when interest rates, and subsequently mortgage rates, were in the double digits—thereby producing a much slower buy and sell housing market. To entice buyers, a seller would offer a VTB with the purchase of their home, often at a slightly lower rate than what was offered in the market. Since interest (and mortgage) rates are currently history low and markets across Canada are either hot or stable, you won’t find many VTB mortgages, unless the seller needs to entice buyers (such as a poor location, hard to sell property or a property in bad condition).

Reverse Mortgages

A reverse mortgage is a loan secured against the value of your home. Unlike a loan or a regular mortgage, with CHIP you are not required to make payments. You only repay the loan when you move or sell your home. You’ve worked hard to own your home. Now get your home working for you to:
  • Pay off debts
  • Renovate or make your home more accessible
  • Handle unexpected expenses
  • Help your children or grandchildren
  • Improve your day-to-day living standard
  • Make a special trip or purchase

Blanket Mortgages

These mortgages are registered against an entire property and are typically restricted to housing co-ops but can sometimes be found on condominiums. With a blanket mortgage, the owners of the units will assume their portion of the mortgage—either by qualifying for their portion of the blanket mortgage (as with a co-op) or by qualifying and obtaining their own mortgage. If the condo developer has obtained a blanket mortgage on the property, they will use the mortgage funds to build the condo and then remove individual portions of that blanket mortgage as each unit is sold.

Portable mortgage

If you have a portable mortgage you can transfer that mortgage from one property to another without penalty and without having to re-qualify with that lender. Not all lenders offer portable mortgages and there are restrictions, so read the fine print.

Private Home Loans

Although the loan structure is similar, a private lender doesn’t work like a bank. They don’t have compliance departments and red tape. They are able to assess a loan very quickly, therefore private lenders have a faster closing schedule and funding time. A private lender can close a deal within a couple of days while a bank must process your files through different departments before approving you (you know how that goes!).