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Mortgage and insurance for fixing and flippin?

Discussion in 'Real Estate Discussion' started by KhoaN, Jan 29, 2018.

  1. KhoaN
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    KhoaN Inspired Forum Member REIN Member

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    Hi,
    I just secured a deal to do fixing and flipping and it is my first one. I had contacted my previous mortgage specialist at the bank but haven't told her that it will be a fix and flip incase she doesn't want to do it, however I will tell her since I don't want to burn any bridges and hope she will be ok.

    My question is which banks or brokers out there that easy to work with fixing and flipping?
    Also, do I just go with my insurance broker to insure it and then cancel the policy when the house is sold?

    Thanks,
     
  2. CorySperle
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    CorySperle Senior Forum Member REIN Member

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    Whether you are fixing and flipping or buying and holding, the criteria to qualify for a mortgage is the same, except of course you cannot use existing rental income in your TDS calculations. The main distinction is you will want to get an open mortgage, typically variable, in which you will pay a higher rate however penalties are a minimum when you go to sell. Yes talk to a few different mortgage brokers and insurance ones, prior to going after projects, something tells me insurance criteria is different, and likely much more expensive for flippers.
     
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  3. ThomasBeyer
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    ThomasBeyer Senior Forum Member REIN Member

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    Ideally the loan is secured on another asset, say your house with ample equity, at prime or prime plus 1/2%. Tough to get an open mortgage repeatedly that you discharge after 2-3 month.

    Those with cash at hand, for example via their own home, will find ample opportunity as mortgage qualification is (unduly) tightened across Canada by eager, uneducated politicians.


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  4. KhoaN
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    KhoaN Inspired Forum Member REIN Member

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    Thanks Cory and Thomas! What I concern is due to the short duration that could affect their pay or commission clawback so that makes it not attractive to the mortgage specialist.
    By the way, i told my MS at TD and she's fine with it.

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  5. nsalama
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    nsalama New Forum Member REIN Member

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    It is great practice that you fully disclose and are keen on building the relationship with your team. This will go a long way in building a successful portfolio. Keep it up!

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