Mortgage Investment Corporations offer clients a lot of solutions to their financial situation. Many self employed people claim lower than normal incomes for the purpose of deferring taxes. MIC’s allow that client to show that their income is higher through cash flow and claw backs in the business.
Business for self (BFS), No income Qualifying (NIQ) and low doc applications are but a few examples of the types of scenario’s that MIC’s will consider. Especially now that CMHC has tightened up the regulations on self employed insured mortgages.
MIC’s will look at rental properties at lower loan to value numbers especially if they cash flow. Below are some scenarios when MICs can be approached for mortgage:
Recently Out of Bankruptcy
If you are recently out of bankruptcy but have some re-established credit and a decent employment history then a MIC may consider your file. We have actually been able to help clients who are still in Bankruptcy and been able to help them purchase their homes out of the bankruptcy.
MIC’s are also used by clients in foreclosure, helping someone in foreclosure is a tricky maneuver but it may make more sense that allowing them to lose the house and any equity they may already have.
For New Home (Alongside Existing Home)
MIC’s are used quite often by people who are building houses and can’t qualify for their existing home and the new one at the same time. Many small builders will use a MIC to build the homes as the banks will only lend them so much money based on inventory. MIC’s are also used for infill construction builders as they again lack the cash flow and the banks won’t work with them until they are proven.
MIC’s come in all sizes with many of them being as small as a million dollars to some being in the 200 million a year range. The smaller MIC may take some extra risk as they would probably only really deal in their own city or surrounding areas. The bigger MIC’s feel a bigger responsibility to their members and while they will deal nationally they will only deal in major cities throughout Canada. We also have a mid size MIC that prefers to lend in small towns in western Canada at a reduce Loan to value but it is something that is hard to find.
So who would use a MIC as you can see the range is huge and people looking at different solutions to every day mortgage problems will seek us out as mortgage brokers to find them real life mortgage solutions.