Custom Mortgage Solutions Will Granleese M.B.A. Business Development Manager

Agenda  q  Added  Value  in  Custom  Mortgage  Solu4ons  

q  Learn  by  Example:    q      Self  Employed  q      New  Immigrants  q      Commercial  q      Prepaid  q      Draw  q      Construc4on  q      Land  Loans  

q  Custom  Terms  

q  Ques4ons          

Why Antrim  

q  1  Lawyer  for  Refinances  –  Save  Hundreds  on  closing  costs  

q  1  Page  Commitment  –  Mul4  page  commitments  are  for  Bank  deals  

q  OPEN  Terms  Standard  

q  Speed  

q  Size  –  Can  handle  25K  –  5million  

q  No  good  faith  Deposit  Required    

Characteristics of Bank Deals  

q  GDS/TDS  in  Line  

q  Provable  Income  

q  Rate  and  Terms  are  Not  Nego4able  (  Everyone  Gets  the  Same  Package)  

q  You  Can  Adjust  your  commission  which  might  change  rates  a  bit  but  in  General  it’s  a  Mass  Consump4on  Product.  

q  If  you  can  check  all  the  Box’s    your  approved…  Comfor4ng…  but  not  that  flexible  

Characteristics of Private Deals: Let’s Find a Solution!

q  Flexible  GDS/TDS  q  Self  Employed  No  Problem  q  Stated  Income  q  Low  Beacon  q  Full  Rental  Income  

q  Each  Deal  is  Unique  and  Underwri`en  with  the  specific  needs  of  each  Client  

q  Not  the  one  size  fits  all  approach  of  the  Banks  

q  Custom  Terms,  Payment  Schedule,  Security  

q  The  Rate  might  be  higher  than  the  Banks…  but  the  added  value  in  custom  terms  goes  a  long  way  to  make  the  rate  increase  less  important.  q    For  Short  Term  Borrowing  Rate  Should  be  much  less  important  than  

 Convenience  

q  Don’t  be  afraid  of  doing  Private  Deals…  Easiest  Applica4on  Process  you  will  ever  have  and  underwriters  trained  to  help  you  deliver  a  solu4on…  

Opportunity: To Create Value A Custom Mortgage Tailored to the Borrowers Needs

q  Allows  the  Lender  to  Secure  more  than  one  Property  in  the  Same  Mortgage  

q  Banks  Don’t    Secure  Against  Several  Proper4es  but  Private  Lender  Do!  

q Many  Individuals  own  more  than  one  property…  especially  self  employed  individuals…  

q  Always  ask  if  the  Client  owns  other  proper4es…    

q  The  key  to  Lower  Rates,  Be`er  Terms,  and  Higher  LTV’s  

The Most Valuable Tool You Have: Interalia / Blanket Mortgage

Purchase  of  Rental  Property  $800K    Looking  for  80%  $640,000  Stated  Income,  low  Beacon    Problem:  No  Lender  will  go  80%  on  these  Clients    However:    Principal  Residence  worth  $800K  with  $300  1st  mortgage  (37.5%  LTV)    Combined  Mortgages  $940K  Combined  Assets  $1.6M        (  58%  LTV)    Approved  with  LOW  rate  and  Favorable  Terms  

Example: Interalia / Blanket Mortgage

q  Client  can  sell  either  property  in  the  future…  does  not  hold  them  hostage.  

q  If  they  sell  one  of  the  proper4es  they  simply  have  to  paydown  the  mortgage  to  an  agreed  upon  LTV.  Typically  the  Funding  LTV.  

q  For  Example…  In  the  Previous  example  Let’s  say  they  sold  their  Principal  Residence  and  Moved  Into  the  Renal.    q    Lender  May  Accept  75%  LTV  so  paydown  mortgage  by  $340,000  from  Sale  

 Proceeds  

Notes: Interalia / Blanket Mortgage

When Interalia Looks Good But…  Example:    Principal  Residence  worth  $1million…  $800k  Exis4ng  1st  Mortgage  Looking  to  Purchase  $500K  Rental  to  80%  Has  $100K  Down  Payment  /  Reques4ng  Interalia    Although  $200K  equity  in  Principal  Residence,  Lender  will  Most  Likely  see  no  value  as  already  over  75%  LTV    If  the  Secondary  Property  does  not  lower  the  Overall  LTV  then  Generally  Interalia  has  li`le  Value  

Beacon Score:  q  No  minimum  Beacon  

q  Higher  the  Beacon  the  be`er  the  terms  and  LTV  

Self Employed:  q  Require  1st  and  2nd  mortgages  for  Purchase  or  Refinance  q Write-­‐off  expenses  and  claims  low  income  (  So  not  Bankable)  q  Low  Beacon  as  using  credit  cards  and  personal  loans  to  finance  business  q  Have  Substan4al  equity  in  home  and  may  also  own  Commercial  Real  Estate  

associated  with  the  Business.  

q  1st  Mortgage  to  Purchase  should  have  no  problem  going  to  75%  so  long  as  beacons  are  in  the  600+  range.  Stated  income  OK  

q  2nd  mortgages  no  problem  to  75%...  open  an  easier  approval  than  1st  mortgage  

Self  Employed:  

q  Sliding  Scale  over  $1million  Common.    q    For  Example,  75%  1st  million  and  60%  over  $1million  

q  On  Purchases  try  puqng  a  Bank  1st  to  max  equity  lending  program  amount  then  come  to  private  lender  for  top-­‐up  2nd  to  complete  the  deal.    q    Open  this  results  in  lower  interest  costs  than  simple  private  1st  mortgage  

New Immigrant:  q  Two  General  Types:  

q    Very  Recent  q    Been  in  the  Country  a  Few  Years  

q  Good  News…  They  Buy  in  Areas  of  High  Demand…  Good  Security  For  Lender  q  Non  MLS  Purchase  is  a  Problem…  Poor  Loca4on  is  a  Problem  q  Lower  of  Appraised  Value  of  Purchase  Price      

New Immigrant: Very Recent

 q  Characterized  by:  

q    Beacon  Reject,  No  Canadian  Income,  POA?  

q  Lender  will  be  Conserva4ve…  most  will  look  at  65%...  but  few  going  to  75%  q    Lower  Priced  Proper4es  Lender  May  be  very  Aggressive  

q  Important  what  they  are  buying…  loca4on  is  key  as  the  lender  has  very  few  keys  to  ability  to  pay.  

q  Explain  their  Business  Overseas…  why  they  have  moved  to  Canada,  explain  clearly  how  they  are  going  to  make  their  payments.  

q  Going  to  need  a  Canadian  Bank  Account  for  payments  

New Immigrant: In the Country a Few Years

 q May  have  a  few  trade  lines  on  Credit  Bureau  q May  be  high  credit  score  or  low…  or  s4ll  reject  beacon  q  Should  have  Income  but  may  s4ll  be  very  low…ie  Overseas  Income…    q  POA?  q  Generally  get  a  higher  LTV…  should  have  income  now…  established  banking  

rela4onship  

New Immigrant: Example  q  High  End  Home:    $1  –  3million.  q  Lender  going  to  be  looking  for  35  –  50%  down.  q  No  Income  confirma4on  q  Beacon  Reject  q  All  about  loca4on  and  down  payment  q Must  have  CDN  Bank  account  q  POA  can  work…  if  signing  by  POA  then  the  lawyer  that  draped  the  POA  must  sign  

the  mortgage  docs  as  they  can  verify  their  iden4ty  q  Rates….  Will  be  compe44ve  due  to  low  LTV  Required  

New Immigrant: 2 More Examples  Middle  Market  Home  Purchase:  

q  Lender  going  to  be  More  Aggressive  q  Should  be  able  to  get  75%  LTV  q  Not  quite  as  compe44ve  rate  as  higher  LTV  q  If  Lower  LTV  then  more  compe44ve  rate  

   Refinance:  

q  Typical  Refinance  being  done  to  pull  money  out  to  purchase  another  property  

q  Refinance  will  be  more  conserva4ve  than  purchase…  say  max  70%  q  The  More  Proper4es  the  Lower  the  LTV.  

Commercial:  q  Large  Scale  Commercial…  Over  $1million  should  send  Applica4on  to  Commercial  

Private  Lender  q  Up  to  $1million  Many  Residen4al  Lenders  will  look  at  it  

q  Typical  Property  Type  q  Strata  Office  Space,  Warehouse,  Detached  Building  q  Should  not  have  a  problem  finding  65%  LTV  with  private  lender..  over  this  

much  more  difficult.  q  Purchases  much  be`er  than  Refinances  q  Interest  Only  an  Op4on  

Commercial: Example of Easy Deal

 q  Purchase  of  1500sqp  Strata  Office  or  Retail  Space:  q  Purchase  Price  $500,000  q Metro  Vancouver  

q  Outside  Lower  mainland  can  be  a  Problem  q  Average  Credit  q  Stated  Income  q  Easy  Approval  to  65%...  a  li`le  harder  to  70%....  75%  a  stretch  q  Favorable  Terms  (  Interest  Only  for  lower  LTV)  

Commercial: Example of Difficult Deal

 q  Purchase  of  ½  Acre  Raw  Land  in  New  Westminster  q  Purchase  Price  $1million  /  Looking  for  65%  LTV  q  Banks  Won’t  Touch  due  to  Self  Employed,  Stated  Income,  Raw  Land  q  Generally  Very  Hard  Deal  to  Put  Together…  regardless  of  LTV  given  Raw  Land  

q  So  you  have  to  ask?  Do  they  Own  Any  Other  Proper4es?  q  Principal  Residence  worth  $800K  with  $200K  1st  mortgage  

Commercial: Example of Difficult Deal Continued

 Solu4on:  q $650,000  1st  mortgage  on  Raw  Commercial  Land  with  interalia  2nd  Mortgage  over  principal  Residence  .  q LTV  47%  -­‐  Deal  Approved  with  Favorable  Terms  

q When  looking  at  commercial  Deals…  Always  ask  the  status  of  their  Principal  Residence…  Will  allow  higher  LTV  and  Lower  Rates  if  Client  is  willing  to  put  up  home  as  addi4onal  Security.  

Prepaid Mortgage:

 Example:    q Older  individual  looking  to  stay  in  their  principal  res  for  a  few  more  years  before  they  move  to  a  care  home…  exis4ng  1st  mortgage  with  BMO  $150,000.  Looking  for  60K    equity  takeout  to  live  on  but  no  ability  to  make  payments.  q CHIP  a  good  op4on…  but  may  not  provide  enough  cash…  q Prepaid  2nd  mortgage  a  good  alterna4ve  for  the  short  term  q Fund  70K  2nd  Mortgage,    q $11K  back  to  lender  in  prepayment  q Net  Funds  to  Client  $59K….  No  Monthly  Payments  Made…  Mortgage  Accrues  to  $70K  in  2  years  q Low  LTV  

Estate Mortgages

 q  First  Thing….Expressed  Right  for  Executor  to  Borrow  in  the  Will  q  Probate  must  be  Granted  q  Reason  for  Borrowing  must  be  sound  q  Expect  Low  LTV  

Land Loan  

Example  q Developer  Purchasing  Land  q Purpose…  For  Re-­‐Development  or  change  in  Zoning  q Generally  Lender  will  want  appraised  “as-­‐is”  without  value  associated  to  Development  Poten4al.  q Loca4on,  Loca4on,  Loca4on  q Low  LTV  is  the  Norm…  Max  65%  (  based  on  as  is  value  ).  q Opportunity  for  Prepaid?  If  municipality  is  close  to  issuing  development  permit.  

Draw Mortgage  Example:  q Client  does  not  need  en4re  mortgage  proceeds  at  this  4me…  or  wants  the  op4on  for  more  funds.  q Client  Purchasing  Rental.  May  or  May  not  want  to  renovate  in  the  next  2  years.  q Purchase  price  $800K.  Has  $400K  down  payment  but  wants  75%  LTV  (  $600K)  

q 1st  Draw  $400K  to  complete  purchase,  $200K  s4ll  available  q Only  pays  interest  on  Drawn  Amount  q Only  pays  once  for  legal  fees  

Custom Terms: Your Opportunity to Add Value

 q  Ask  for  it!  q  Client  only  needs  funds  for  6  months?  Ask  lender  for  a  6  month  term.  q  Lender  does  not  have  a  6  month  term?  Ask  lender  for  1  year  term  with  first  6  

months  closed  and  last  6  months  open.  

q  Ask  for  OPEN  terms  q  2  year  terms  are  doable…  any  more  than  2  years  is  very  rare…  but  ask  anyway  q  The  lower  the  LTV  the  be`er  you  can  nego4ate  payment  schedule.  q  50%  LTV  prepayment  is  an  op4on…  interest  only  a  given  q  Perhaps  you  want  no  payments  for  6  months  then  payments  begin  

Custom Terms: Your Opportunity to Add Value

 q  65%  interest  only  an  op4on  or  40  year  amort  q  75%  depends  on  the  property…  desirable  security  may  s4ll  be  able  to  have  

interest  only  q  Generally  not  charged  for  lump  sum  payments  q  Annual  renewal…  Discuss  if  $  amount  or  Fee  q  For  Interalia  deals…    nego4ate  how  much  needs  to  be  paid  down  to  release  one  of  

the  proper4es  from  the  start.  q  For  Construc4on  Deals…  ask  for  lower  rate  when  occupancy  permit  issued  and  

home  complete…if  not  sold.  

Quick Quote  

q  Antrim  Mobile  App  

q  Instant  pre  approvals  

q  A  1st  in  the  Private  Lending  Market  

q  Quickquote.antriminvestments.com  

Current Rates 1st Mortgage  

q  <60  

q  <65  

q  <70  

q  <75  

LTV  

6.49%  OPEN    INT  ONLY  

6.95%  OPEN  INT  ONLY    7.49%  OPEN  INT  ONLY  

7.95%  OPEN  40  Yr  Amort  

Current Rates 2nd Mortgage  

q  <50  

q  <60  

q  <65  

q  <70  

q  <75  

LTV  

7.95%  OPEN  INT  ONLY    8.95%  OPEN    INT  ONLY  

9.95%  OPEN  INT  ONLY    10.49%  OPEN  INT  ONLY  

10.95%  OPEN  40  Yr  Amort  

Questions