Types of Real Estate financing for Canadians

[Bilal Kozak]

Hello, I'm brand new to the BP scene and Real estate investing. I am currently trying to educate myself and plan for my eventual start in REI.

I've read the BP ultimate starters guide and am now reading a book on flipping houses, however, it seems most of the material I've come in contact with is based on the American market.

What type of real estate financing options do Canadians have? I tried to google this but not much information regarding the Canadian market, or maybe I'm just looking in the wrong places.

EDIT: I should mention I'm looking to start investing in Montreal, Quebec if that makes any difference.

[Jacob Perez]

Hey @Bilal Kozak there are basically 4 main types of Mortgage lending options:

1. 
   Major Banks, Credit Unions, Monolines etc.- Subject to federal lending regulation, lowest interest options, can buy with as little as 5% down.
2. Alternative lending options (easier approvals for people with weaker credit or unconventional income sources) Full bank underwriting process. Requires at least 20% down, interest rates range from 3.8-5.99% depending on the file.
3. Private Lending (highest interest option but easiest to finance generally based on equity in the property) - Requires at least 20% down - Interest rates start around 9%
4. Vendor Take Back Options (this is negotiated directly with the seller where the seller will mortgage you the property for a monthly payment including interest). Often used when the property itself isn't easy to finance / sell or if the seller simply wants to earn extra interest and doesn't need a lump sum payout.

Working with a good mortgage broker (like me lol) will give you access to navigating all of this.

Jacob