Canadian BRRRR still available?

[Ghassan Alsayyed]

I have some cash that I'm interested to invest in real estate here in Ontario Canada and last week I went to a mortgage broker to discuss potential mortgage + improvement deals that I can qualify for so I can start looking. She informed me that banks don't do the 3 months refinancing deals anymore!

Is that true? If not what are the lending options for a mortgage + improvement in Canada? 

Thanks so much

[Brandon P.]

Most banks will do a purchase plus improvements mortgage if you obtain a high ratio insured mortgage through genworth or CMHC. I believe the max they will loan for renovations is a maximum of 20% of the purchase price. I included a link for more information about genworth's program.

This is the best option if you are wanting to rent the property out afterwards because when you apply for another mortgage on a different property, the next lender will calculate your debt service ratios including 100% of the rental income, usually making it just as easy to qualify as when you purchase your first property.

You can BRRRR with a conventional mortgage(20% down payment) as well, there are lenders which will do 6 month or 1 year terms, then you could refinance at the end of the term. It is a bit more difficult to scale up at first with conventional mortgages because if you go to purchase additional properties later, the lender will only include 50% of the rental income when they calculate your debt service ratios.

I recommend finding a mortgage broker who has experience dealing with rentals(not all of them do) and also speak with a mortgage advisor at a local credit union. The credit unions in Canada are subject to provincial legislation, they operate under a separate set of rules than the national banks do, so its worth exploring your options with them.

http://genworth.ca/en/products...