FAQ
General Questions
Here are the answers to the most popular questions brokers ask us. If you have a new question, feel free to post it below.
No, we only fund private residential 1st and 2nd mortgages.
No. See Question #1.
No. See Question #1.
Yes, as long as the improvements are cosmetic in nature and there is no construction element. We evaluate these on a case-by-case basis.
We’ll lend anywhere in Ontario as long as we feel the subject property is marketable enough to be sold in a reasonable period of time should the borrower default.
Yes.
That’s ok, as long as the bankruptcy has been discharged and you have a good plan for how a private mortgage with Switch is going to help improve your current financial circumstances. We are counting on you to explain that part to us, so tell us everything.
Just because you have bad credit now, doesn’t mean you'll have bad credit forever. The whole idea of private money is to help borrowers avoid having to sell their home by accessing equity in their home that can help them change the circumstances that are currently making it impossible for them to get financing from a bank. As long as you can help us see your vision for how a private mortgage can help you repair your credit, we want to be the lender that gives you the opportunity to bring that vision to life.
Income is income. Our focus is to ensure that every borrower is able to demonstrate a reasonable ability to pay the required amount of interest each month. There are many ways that borrowers can demonstrate this ability and we know that in today's world income is generated in a variety of ways, so we try to be as flexible as possible in assessing it.
Switch will lend an approved borrower up to 80% of the value of the property that secures the loan. In some cases, an exception can be made to exceed 80% but we prefer to stay under 80% so that our borrowers always maintain a nice piece of unencumbered equity in their home.
No, but we are very supportive of our broker partners and encourage all borrowers to hire a broker to represent them in the negotiation of their private mortgage with us. Our broker partners set their own fees and we ask that borrowers sign a letter of direction with their broker authorizing us to pay them their fee from the proceeds of the loan so we can remit funds directly to their brokerage immediately after formalizing the loan.
We use Value Connect services to arrange all appraisals.
Yes. We offer this feature on a case-by-case basis to make our mortgages more affordable and reduce payment risk when necessary.
The greater of 3.00% of the loan amount or $4,000.
No. All of our mortgages are 1 year terms. However, if the Borrower fulfills all of its obligations to the loan throughout the 1st year, they may be eligible for a renewal that would extend the term for a 2nd year.
No. Since rates on a private mortgage are already higher than bank rates, amortizing the loans only drives our borrower's monthly payments up. By charging interest only each month, we are able to keep those payment obligations as low as possible.
Terms and conditions for subsequent years after year 1 do not change. The interest rate and fee is the same in year 2 as it is in year 1.
Yes. The standard penalty for early repayment is 3 months interest, but we do make exceptions on a case by case basis to lower the early repayment penalty to as little as 1 month of interest.
You can submit your application via Filogix, Velocity, Scarlett, Newton and other popular broker submission portals. For faster approvals, please ensure you submit with detailed notes and a copy of a recent credit bureau for each borrower. You can book a call with an underwriter to discuss your deal through the website.
Once we understand your situation, we’ll either approve it or decline it usually on the same day. If we approve it, we’ll send you an approval by email with the terms and conditions so you can think it over and compare it to other offers you're seeing. You'll have 3 business days to decide whether you like the terms, can satisfy the conditions and want to accept the offer.
Once you indicate to your underwriter that your client would like to accept our offer and is able to satisfy the conditions included in it, your underwriter will send you a formal commitment package via email. The package you receive will include (1) detailed instructions regarding how your client can remit the legal retainer that is required so we can instruct our lawyers to prepare for funding, and (2) a complete list of conditions your client is required to satisfy prior to funds being advanced.
If, for any reason, (other than a condition not being satisfied by the borrower) Switch chooses to back away from a deal, we will happily refund the legal retainer to your client.
Our policy is to advance funds within 5 business days of the date when all conditions of the mortgage are satisfied, so really it’s up to you how fast things move.
Time is of the essence with every private mortgage so at Switch rushing is standard. We move as quickly as we can and don't charge extra for it.
No more than $1,750 plus disbursements and HST, sometimes less. It depends on the firm
we use to represent us, which usually depends on the size and the complexity of the mortgage.
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