Having several hundred thousand dollars on hand to purchase a home is pretty uncommon... Which is why most home buyers require financing to purchase a home.
But what are the options for buyers when it comes to funding their mortgage?
Let's look at Mortgage Funding Options.
Chartered Banks
The big banks like RBC, TD, CIBC, and Scotiabank all offer mortgages. They're a go-to for many first-time home buyers because they're a household name and they offer a wide range of products, from variable-rate mortgages to fixed-rate mortgages and even special programs for first-time home buyers. The big banks may be able to offer lower interest rates than some other lenders. While they may be the most commonly used they aren't your only option.
Trust & Loan Companies
These are companies like Equitable Bank and First National Financial. They're regulated by the federal government, which means they have to follow certain rules. They often have more flexible lending criteria than the big banks. So if you don't fit the typical mold of a borrower, they may be a good option.
Life Insurance Companies
Some life insurance companies, like Manulife and Sun Life, offer mortgages. And they're often willing to work with people who don't have perfect credit.
Pension Funds
Your pension fund may be willing to lend you money to buy a house under certain conditions. But you'll likely need a down payment of at least 20%. And the interest rate may be higher than what you'd get from a bank.
Credit Unions
Credit Unions are organizations that give people with good credit an opportunity to borrow money. They work similarly, but they have less strict lending criteria than banks. Credit unions typically pride themselves on excellent customer service, so you can expect quality service.
Private Sources
If you know somebody who has money to lend, they may be willing to give you a loan. This is usually in the form of friends, family or an acquaintance. But be prepared to pay a higher interest rate than you would with a bank or other traditional lender.
