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.
You can arrange an appraisal from any AACI appraiser that is on the approved list of Hometrust or Equitable Bank or you can use the NAS or Value Connect services. If you need help arranging an appraisal, our underwriting team can provide assistance so don't stress.
Yes. We offer this feature on a case-by-case basis to make our mortgages more affordable and reduce payment risk when necessary.
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. A standard 3 month penalty applies for early repayment (in full). Partial repayment is not permitted. We also offer a fully open 1st mortgage product at 0.75% per month that functions like a 30 day loan which can be extended up to 11 times so that borrowers who want a short open term can go month to month at a very affordable cost. For second mortgages, the rate for this fully open mortgage is 1.00% per month. Fees for our open product are based on the RATEScore for the application similar to our closed product.
Very soon you'll be able to submit directly to Switch through Filogix and other popular submission platforms. For now, simply send an email to [email protected] and provide us with a paragraph or two telling us as much as you can about your client and their circumstances. Within 24 hours, one of our underwriters will call you directly to discuss it over the phone and try to work out a solution that fits your client's needs. You can also book time to talk to an underwriter on your schedule through the website or call us directly.
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.
Every offer from Switch is electronic and comes with step by step acceptance instructions. It's very easy to accept right from your client's phone, tablet or computer. In addition to electronically signing to accept the terms and conditions, your client will also have to provide Switch with a (non-refundable) legal fee retainer of $500 so that we can instruct the file and get funds into your client's hands as quickly as possible.
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.
Fill out the form below and submit your question. We'll respond to your directly and publish the answer on this page within 24 business hours.
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