Mortgage Intelligence

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Banks Restrict Borrowing Options.

One Less Way To Finance Investment Property.

In the past Investors who had good assets through registered investments had the option of lending themselves money through Self Directed RRSPs.  That meant that as long as they had enough money they could lend without explanation. It gave them the opportunity to buy investment properties that the Banks may not have considered but that they knew were profitable and added value to their portfolio.

But now that option, that personal choice, is no longer available through a Bank. At this time only three companies in Canada will allow it. They are Home Trust, Community Trust and Great Western.

The idea that a Bank will not allow mortgages through Self Directed RRSPs may cause investors to think there is greater risk than there may actually be.

No more Self Directed RRSPs

From a mortgage broker standpoint it also means we have one less option to offer our Investor clients. Keep in mind that in the past those who used this method were generally season investors in the first place, not the beginner.

We must ask the question, “Are Banks trying to eliminate the competition that the use of private funds creates or is there great risk in borrowing your own money?”

What do you think about this? Your comments are welcomed.

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