What is 100% pre-construction financing?
Jermaine Hinds, a mortgage broker at Matrix Mortgage Global, who helped a cab owner from losing his house in Toronto, has now revealed another newsworthy update. In this news, Jermaine reveals the details on how buyers can obtain up to 100% financing on pre-construction properties in Toronto, and the Greater Toronto Area. This product is offered by a Schedule I Bank and it is also available from private lenders who have established credibility and access with the brokerage.
Buyers who are looking for financing on their pre-construction properties can benefit from this product as they could get up to 100% financing of the Purchase Price on the Closing Day. This essentially allows buyers to take out their deposit on the Closing Day in one transaction.
For example, if a buyer bought a property in 2019 for $600,000 with a $70,000 down payment as a deposit structure that the builder asked for it. Fast forward to 2021, and the property is worth $900,000 now. With this product, the buyer is able to get financing up to the full purchase price of $600,000. This means, the buyer would be able to get back the $70,000 deposit and put it in their pocket, invest in other pre-construction properties, or use it to renovate their property and bring the value up even more.
Buyers do have to come with a deposit as required by the builder to secure the pre-construction property. This is a common requirement for many builders to ask for a deposit up-front.
What are the benefits of taking 100% pre-construction financing?
The benefits from taking this approach are two-fold:
- This allows buyers to take out their equity sooner so they can recycle the funds for any other purposes. Most buyers who take advantage of this product, recycle the funds as a deposit to another pre-construction property.
- The second benefit is the fact that buyers do not have to go through two closings to take out equity from the property.
Who would benefit from this product?
This product is mainly for investors because they can now recycle their money, put it into other pre-construction projects and repeat the same process. They can also turn that money now into an income for themselves, as in they could private lend that money out to other people.
Why is this a better approach than registering a second mortgage?
Going with this route, basically, means that buyers have fewer closing costs expenses. Without this product, buyers would have to close on the original mortgage first, and then take on the second mortgage in the future. This avoids two closings, two lawyer fees, two broker fees, and other closings costs. This product saves buyers some money by doing it all in one transaction. It’s a hundred percent pre-construction financing.
Is this product safe?
The money is coming from A bank, it is not coming from a private lender. Not saying that private lenders are bad, but this is a bank product. This is as safe as going to the top five banks. This matters for buyers who are risk-averse and prefer to work with lenders who have become household names.
Is this product accessible from any banks and mortgage brokers?
Not every bank has access to this. This is a very specific bank. It is a very specific lender. Not every broker also has access to this product either. At Matrix Mortgage Global, it is an unfair advantage to have access to this product and buyers can benefit from this to get ahead in their real estate investment.
This product may not be suitable for everyone. For those who don't qualify for this product, they can still benefit from an unfair advantage since working with Matrix Mortgage Global means buyers can gain access to an army of private lenders who do go up to 80% of the current value, as an alternative to the Schedule I Bank.
About Jermaine Hinds, Mortgage Broker:
Mr. Jermaine Hinds is a mortgage broker in Toronto with years of experience in the industry. His insight comes from his many years as an agent and lender, which gives him a broad network that offers clients more than 100 different lending partners who are ready to offer various mortgage solutions, including home equity loans, bridge loans, and other specialized mortgages products. Mr. Hinds has two children and one loving wife with who he spends most of his time when not working or spending time at the gym! His mortgage license is powered by Matrix Mortgage Global (Brokerage Lic. #11108). Those who would like more information about this topic, please call Jermaine Hinds at (647) 998-2767 or Jermaine@mmgb.ca
About Matrix Mortgage Global:
Matrix Mortgage Global is a Toronto mortgage brokerage that has been awarded 4X Broker Of The Year in 2018, 2019, 2020, and 2021. The company is led by the Chief Executive Officer, Mr. Shawn Allen who smashed the $380M mark in mortgage origination amount during the Great Financial Crisis. Mr. Allen is an international speaker and masterclass host for mortgage brokers in Canada and Australia.
