When Ringo So went to renew his mortgage, he was told his rate would jump from three to six percent, and his monthly payments were to rise around 60%, a sharp increase and an example of what many Canadians are currently facing with their finances.
But So knew there were other options as he is a mortgage agent and managing partner of 360Lending in Ontario, however, he and others are worried that Canadians across the country do not know there are other choices that do not involve large banks.
"There are going to be thousands of Canadians going into their banks in the next few months to look for a solution to keep their payments affordable or to seek an approval for refinancing … many of them will be turned away, but there are mortgage brokers who can offer advice and solutions to these very real problems," explained So in a news release.
“Brokers have access to special rates that are better than the banks' posted rates. Brokers are incentivized to help their clients save money whereas banks only want to sell you more of their products by cross-selling and up-selling."
A point that So and Adam Mitchell, also a managing partner at 360Lending, want to get across to Canadians.
“What's more common is for them (homeowners) to get renewal paperwork with pricing that doesn't fit their budget and then… essentially they don't have a choice,” Mitchell said to NowMedia.
“It's either sign it back and then struggle. I think really the message we want to put out there is there are other solutions.”
The solutions they want people to know about are that mortgage brokers can help homeowners qualify for lending from “b space” and “c space” banks, institutions that are lesser used but still federally regulated as they “take on a little more risk,” explained Mitchell.
Mitchell added that alternative lending methods generally do carry higher interest rates, but “at the end of the day, it’s a solution, and we like to call it common sense lending.”
“It's that band-aid to get them (homeowners) over this hump so that when rates do start to decrease, more options become available to them,” explained Mitchell.
The duo from 360Lending urges homeowners in a bind to speak to a professional before a problem gets too big to handle, something that Tracy Jennings did when she got in contact with So.
Jennings, a contract teacher, found herself in a situation where she “couldn't get anything from the bank” and was “getting further and further in the hole.”
“I've never reneged on any mortgage payment ever. And that didn't count for anything. It's just, ‘Oh, but she doesn't meet the ratios. She doesn't meet the ratios,’” said Jennings.
“In that case, I was really up against it, there was never…there was nothing they could do for me.”
Jennings reached out to 360Lending and So began to work with her, stating that Tracy’s situation “was difficult.”
Eventually So helped Tracy come to terms with a solution through Home Trust, a mortgage lender, who saw Jennings as a “competent borrower.”
“Tracy, I would say is a success story because she was able to speak to a professional in the industry, speak to a broker and able to get help,” explained So.
“And a lot of Canadians should take a look at her example and also try to do the same thing if they are stuck in a situation where they feel like they have no hope.”
Watch the above interviews for more information about 360Lending, as well as the interview with Jennings about her situation.
