When it comes to making any significant financial decision, it’s important to conduct the proper research regarding the institution you plan to fund your investment and the method you intend to use. Buying a home is no different. In fact, purchasing a home may be one of the most significant financial investments you will ever make. As such, deciding where to apply for a mortgage is a choice that should be carefully weighed and considered. In Canada, there are two main sources for mortgages: banks and mortgage investment corporations, or alternative mortgage lenders. Let’s review how these options are different.
1. Mortgage Investment Corporations Do Not Conform With Federal Lending Guidelines
Unlike banks, which are federal institutions, the structure of MICs allows them to be provincially regulated. As such, they fall outside of the often burdensome lending guidelines that banks are required to adhere to. It’s important to note that although MICs fall outside of some federal guidelines, they are well regulated by both federal and provincial legislation; they are not un-regulated entities.
2. Mortgage Investment Corporations Offer Flexible Lending Terms
Without having to abide by the same federal policies as the banks, mortgage investment corporations, or alternative mortgage lenders, are able to offer greater flexibility when it comes to loan terms. This flexibility means they can cater to the individual needs of the borrower with tailor-made loans and terms.
3. Mortgage Investment Corporations Allow For Faster Loan Approval
Regardless of what the loan is for, whether you’re applying for a first-time-buyer mortgage or a home renovation loan, the chances are your loan will be approved faster through a MIC or a private mortgage lender. Borrowers of banking institutions are subject to undergo stress tests and an extensive qualification process; oftentimes, loan approval can take months. MICs, on the other hand, are able to structure plans and approve loans in as little as two weeks.
Which Type of Mortgage Lender Should I Choose?
Depending on your situation, it may be advantageous to borrow from a private mortgage lender over a bank. MICs and private mortgage lenders are the best options for individuals who require quick approval or have already been turned away from the banks due to the inability to qualify.
Whether you’re looking to borrow or invest, Alta West Capital can help. We offer several lending solutions for first time buyers, individuals and families that are new to Canada, self-employed business owners, real estate investors and more. Alta West loans are fast and flexible to fit your needs. Visit our website to apply online or contact us directly — call (403) 254-9075 or email info@awcapital.ca.