Day: March 31, 2023

In Canada, a mortgage lender is an individual or institution that can provide a loan for property purchases. There are multiple types of mortgage lending entities that hold different requirements for loan eligibility, which can vary depending on the particular institution. Specifically, mortgage lenders are divided into Institutional Lenders – A-Lenders and B-Lenders; and Alternative Mortgage Lenders – Private and Monoline.

For the purposes of this blog post, Private mortgage lenders will be scrutinized, focusing on their general logistics, as well as the pros and cons of their services.

Private mortgage lenders are businesses or individuals that privately lend money in the form of short-term, interest-only loans. As they focus more on your mortgage as an investment, they tend to be less strict on credit history and background checks. Therefore, borrowers who cannot qualify with Institutional lenders will seek out the services of a Private lender.

When applying, Private lenders require borrowers to state what the money is needed for. Most borrowers will need a loan to: help consolidate existing debt like high-interest credit cards, pay tuition fees, pay for home repairs or renovations, and to cover living expenses.

For a borrower, it is important to understand and evaluate the pros and cons of a Private mortgage as it is major financial agreement. 

The pros of Private mortgage lenders are the following:

1. Flexible eligibility criteria: Borrowers who do not qualify with an Institutional lender, such as a bank, can still acquire a mortgage loan with a Private lender, as they are fairly easy to qualify for, due to the removal of the Stress Test
2. Quicker money-lending process: Compared to major banks, Private lenders can provide a faster process as they are not required to follow a comprehensive mortgage approval process

The cons of Private mortgage lenders are the following:

1. Higher interest rates: Because private lenders are not restricted to the same regulations as Institutional lenders. they can charge higher interest rates
2. Interest-only payments: Most, if not all, Private mortgages require that payments only go towards interest; thus, not contributing to your principal mortgage
3. Extra fees:  Borrowers are expected to pay additional fees, such as lender fees; broker fees; legal fees etc, that would not need to be paid If borrowing from an Institutional lender
4. Only short-term loans available: The borrower is usually expected to pay back the loan within 24 months

Due to the many complexity of mortgage lending, it may be of interest to reach out to a real estate lawyer. A lawyer will not only help you understand the terms and conditions of your mortgage loan, but they can help you determine if the transaction will benefit you. Real estate lawyers will even facilitate the entire mortgage transaction between you and your lender, ensuring that you are receiving and entering a legitimate offer.

At 6ix Estates LLP, we represent clients in mortgage financing or refinancing transactions, both with institutional and private mortgage lenders. We will meet with all borrowers before closing to review the entire transaction, sign the documents and arrange for funds.

Contact us today for a free, 30-minute, no obligation consultation.

A Power of Attorney (POA) is a legal document that provides authority to a person or persons you trust to make decisions on your behalf, should you become mentally incapable. Depending on the authority given by you – the ‘grantor’ or ‘donor’ – the acts an appointed attorney can perform includes anything from bill payments and sale of property to decisions related to healthcare.

In Ontario, there are two types of Power of Attorney documents: Power of Attorney for personal care and Power of Attorney for property.

What is a Personal Care Power of Attorney?

A Power of Attorney for personal care allows your appointed attorney to make personal decisions regarding your healthcare should you become incapacitated. Usually, your POA for personal care is a spouse, family member, or a close acquaintance that understands your wishes and can make good decisions for your wellbeing on your behalf. As this is a large responsibility with implications, a health professional will always determine that you are incapable of making these decisions on your own before your attorney can act.

What is a Property Power of Attorney?

A Power of Attorney for property allows your appointed attorney to make decisions regarding your property and finances should you become mentally incapable. Their decisions can include bill payments, investment management, benefit applications, and the collection of income. This POA ensures that your assets remain protected and can be as specific as you wish it to be.

Continuing Power of Attorney vs. Non-Continuing Power of Attorney

As both types of Power of Attorney involve a continuing power – in that the appointed attorney remains responsible for making decisions regardless of time – Ontario also recognizes non-continuing Power of Attorney. A non-continuing POA is restricted only to property. Specifically, this POA allows an appointed attorney to cover financial affairs only for a specified length of time. It is only used in instances where the grantor is travelling away from home for a long period of time and would thus need another individual to make financial decisions on their behalf. It is important to note that a non-continuing Power of Attorney becomes null should the grantor become incapacitated.

How Do I Make a Power of Attorney?

While a lawyer is not mandatory to legitimize your Power of Attorney, they will ensure that any complex wishes are addressed in your document, while providing the required legal advice.

There is a certain criterion for making a legal Power of Attorney:

1. You must be over the age of majority within the province and be of capable mind
2. The document must be signed in the presence of two valid witnesses
3. The signatures must be of wet ink (cannot be digitally signed)
4. A physical document must be stored (cannot be digitalized and stored online)

Because of COVID-19, the Ontario Ministry of the Attorney General is now permitting lawyers to virtually witness the physical signing of Powers of Attorney.

At 6ix Estates LLP, our office can prepare Powers of Attorney for Property to manage your financial affairs and Personal Care to make decisions about your health care, housing, and other aspects. We also offer all our services remotely. Our lawyers are happy to meet with you virtually or at a location of your choice, within the GTA.

Contact us today!