Full Spectrum Financing is a concept that is gaining ground in the mortgage business. It is particularly suited to non-institutional lenders that have greater latitude in terms of the type of lending they can participate in, particularly non-bank out-of-the-box lending. The few lenders that have the depth of experience to handle full spectrum lending are becoming more popular amongst borrowers and mortgage brokers.
A full spectrum lender typically provides a wide array of mortgage financing:
- 2nd as well as 1st mortgages
- large as well as small mortgages ($10,000 to $10 million+)
- short-term (3 months) as well as long-term (5-year) mortgages
- commercial, industrial and residential mortgages
- new construction mortgages for commercial and residential projects
- land development mortgages for commercial and residential projects
- renovation mortgages for home or commercial property
- bridge financing for the borrower who has bought a property but has not yet sold his or her property
- mezzanine financing for builders and developers who need short-term start-up financing to get a construction or development project to the point where they can obtain conventional financing
- inventory financing for builders and developers who want to use their existing stock of real estate products to secure mortgage capital
- equity takeout financing for property owners who want to free up equity they have in property to do something else; in the case of a homeowner this might be to renovate the home, buy a second home, revenue property or resort property, take a vacation, help the kids with college education, help the kids buy a home, or ???
The full spectrum mortgage lender is able to consider a wide range of mortgage situations, and is therefore a valuable resource for borrowers of all types - the one-stop shop for the wise borrower.
Historically a construction/developer borrower who wants to buy a piece of land, develop it into a subdivision, build homes on the finished lots and sell the finished homes would have to deal with many lenders:
1) First, the borrower would have to find a lender to finance the purchase of the land (a mezzanine mortgage).
2) Then the borrower would have to find a lender to finance the development (plans, permits, subdivision, servicing, bonding, etc).
3) Next, the borrower would have to find another lender to finance the construction of the new homes in the subdivision.
4) Next, to facilitate home sales, the borrower would likely want to identify another more conventional lender to finance the purchase of the finished homes for the prospective buyers of the new homes.
There could be multiple lenders in a simple purchase-develop-construct-sell residential development. At each stage of the process the borrower could face a new set of broker fees, lender fees, appraisal fees, legal fees, mortgage discharge fees; in short, a maze of costly and time-consuming red tape and paperwork.
The full spectrum lender such as Fisgard is capable of handling all these mortgage situations. This is important to the borrower, as the saving can be substantial not only in fees but in the time it takes to deal with several lenders instead of one lender. When the borrower can deal with one lender for all stages of the project (purchase, development, construction, sales) the saving in time and money is significant enough to make or break a project.
At Fisgard we can handle this type of multi-phase mortgage financing not only because we lend our own money and do not rely on leverage borrowing or securitizing our mortgages, but also because we have experienced mortgage underwriters to handle this type of lending. It’s not only about money; it’s about experience. Fisgard’s background experience in real estate marketing, property management, valuation, land development, new construction, renovation, project management and administration dates back to 1968. It is this experience that allows Fisgard to offer brokers and borrowers the benefit of multi-phase mortgage lending.
Most of Canada’s lenders focus on residential property, often insisting that these mortgages are insured by one of three of Canada’s mortgage insurance companies, the largest being Canada Mortgage and Housing Corporation (CMHC). Many of these lenders rely on securitizing their mortgage portfolios, selling their portfolios to institutional investors, and picking up a fee. They don’t lend their own money; they basically arrange mortgages, and then sell them. They are essentially brokers, not lenders.
Fisgard lends its own money, and does not securitize its mortgages or leverage its mortgage portfolio. We meet the growing demand of thousands of qualified borrowers who neither need nor want an insured mortgage (which can carry an insurance fee of anywhere from 2% to 5%) and are undertaking quality projects that require the expertise of professional underwriters who have been lending to Canadian homeowners, new construction builders, renovators and developers since 1968.
To speak to a Fisgard mortgage underwriter call 250-382-9255 in Victoria or toll free 1-866-382-9255. It may be the only call you have to make.
If you are dealing with a professional mortgage broker, please have your broker call us.
Fisgard Underwriters:
Rafer Strandlund
Hali Strandlund
Jason Strandlund
Corrie White
Jen Scharien
Dawn Paniz
Wayne Strandlund
