Solution-Based Mortgages for Ontarians during the Pandemic

Blog-Date-1Jun 12, 2020

Our day-to-day lives have changed a lot recently, but not everything has come to a standstill. Across Ontario, homeowners and hopeful buyers are still seeking mortgages to purchase new homes or refinance existing ones.

At Pillar, we continue to work closely with mortgage brokers to provide your clients with solution-based mortgages. While many banks and other lenders are tightening their lending criteria or putting new loans on hold, we are continuing to support Ontarians with flexible mortgages and short-term financing.

Mortgage lending during COVID-19

Home ownership during the pandemic

Stay-at-home orders and other government restrictions have caused a significant slowdown in the real estate market. Nonetheless, there are still deals moving ahead and borrowers in need of financing.

We continue to provide mortgages in Pillar’s four key segments: rural residential, construction, self-employed and debt consolidation. Two areas in particular where we can provide flexible solutions are:

  1. Quick closing and short-term lending. With some borrowers being squeezed out of the bank channel currently, we can help with quick closing for purchases of residential homes or vacant land. A typical Pillar mortgage has a one-year or two-year term, but we can also provide short six-month terms for borrowers who plan to switch to a bank mortgage as soon as the mortgage market begins to normalize.
  2. Financing for residential construction. Restrictions on new building permits have been lifted recently throughout Ontario. Pillar offers mortgage financing for residential construction projects. Speak to a member of the Pillar team to discuss your construction needs.

Maintaining a smooth process

Mortgage documentation Ontario COVID-19

The pandemic has added some constraints to the typical mortgage application process, but we are working hand in hand with our broker network to keep things moving smoothly.

We continue to assess every mortgage application independently and take the time to understand your client’s situation. This common-sense approach allows us to help you with difficult files that might not meet all the tick boxes for a bank mortgage.

As usual, the more documents you gather and due diligence you complete before submitting an application to Pillar, the faster we will be able to process your request. Meanwhile, there have been two important changes recently in our lending policies:

  • Lower LTV depending on the type of appraisal. Typically, we go up to a maximum loan-to-value (LTV) ratio of 80% when there is a full appraisal. However, some appraisers are currently doing only external appraisals, which are supplemented with photos and videos of the inside of the home provided by the homeowner. In these situations, we are capping the LTV at a maximum of 75%.
  • New requirement for updated salary letters. If your client is currently employed, we are requiring an updated salary letter with details about where they are working, how long they have worked there and what they are earning at the moment.

Here to help

Navigating challenging times is easier with flexibility and collaboration. Amid the ongoing pandemic, Pillar is committed to supporting Ontarians with solution-based mortgages and helping brokers secure financing for their clients.

If you have a deal you’d like to discuss, please contact our business development team.

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