Welcome to Close More Deals – For REALTORS® , the no-BS podcast that turns stalled real estate deals into signed contracts and flaky buyers into loyal clients. I'm your host, Scott Dillingham, a battle-tested Mortgage Expert who's closed over $1B in real estate.Each week, we unpack proven lending programs, negotiation hacks, mindset shifts, and insider tools from top producers – so you close faster, earn bigger, and crush your goals.Ready to dominate? Hit play and let's seal the deal. Subscribe now!
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In this episode of the Close More Deals Podcast, host Scott Dillingham takes a deep dive into private mortgage lending in Canada and reveals how realtors and their clients can avoid overpaying on private loans. Scott explains that while private mortgages are an essential tool for borrowers who don't qualify through traditional lenders, many mortgage brokers default to the path of least resistance — calling up the one private lender they know without shopping around for better rates and terms. The result is clients locked into first mortgages at nine to twelve percent interest when competitive options exist at significantly lower rates, sometimes as low as 5.99% with minimal fees.
Scott breaks down why rate and term should matter just as much as simply getting an approval. When a borrower is placed into a high-rate, interest-only private mortgage, they may build little to no equity during the loan term. This can become a serious problem if the property is meant to be a temporary stepping stone — a common scenario for first-time buyers or clients relocating between provinces. If there's no equity growth and the client needs to sell, the realtor's ability to close a future transaction is also compromised. By advocating for better private lending terms, realtors can protect their clients' financial positions and strengthen their own reputations.
The episode highlights several creative uses of private lending that go beyond the typical bad credit scenario. One powerful strategy involves clients relocating from one province to another who haven't yet secured employment. Using tools like Glassdoor and AI-based income research, brokers can estimate a realistic salary based on the client's profession in the new market and structure a private mortgage around that figure. Once the client lands a job, the private loan transitions to a conventional mortgage — a seamless and safe approach. Bridge financing is another major use case. When a client wants to buy a new home before selling their current one, a private blanket loan or bridge loan can cover both properties temporarily, giving the homeowner time to sell without the pressure of carrying two traditional mortgages.
Scott also discusses renovation financing for investors who need capital to improve a property before refinancing, as well as helping homeowners who've been laid off and need short-term financial support while they secure new employment. In every scenario, the key principle remains the same: always plan the exit strategy. A responsible mortgage broker evaluates whether the client can realistically transition from a private loan back to a traditional lender. Scott emphasizes that LendCity never sets clients up for failure, even if it means declining a deal — as he shares the example of turning down a client with a large down payment who simply couldn't afford the ongoing payments. The client's realtor fully supported that decision, understanding that protecting the buyer's financial health builds long-term trust and referrals.
On the topic of fees, Scott is transparent about LendCity's approach: a maximum broker fee of two percent on private deals, scaling down to as low as one percent depending on the loan size. He notes that some lenders pay the broker directly, which can reduce or eliminate the borrower's fee entirely. This stands in contrast to brokers who exploit the private lending space with inflated fees, knowing the client has limited options. For realtors looking to differentiate themselves and provide genuine value to their clients, partnering with a broker who prioritizes rate shopping, transparent fees, and clear exit planning is a significant competitive advantage.
Key Takeaways
Shop Around for Private Mortgage Rates: The average private lending rate in Canada sits between nine and twelve percent, but competitive options can be found as low as 5.99% on first mortgages — working with a broker who actively shops multiple lenders can save your clients thousands.
Rate and Term Matter as Much as Approval: Getting a client approved at any cost can backfire if high interest rates and interest-only payments erode their equity position, limiting future selling and refinancing options.
Creative Private Lending for Relocations: Clients moving between provinces can secure a private mortgage based on estimated income in their new market, then transition to a conventional lender once employment is confirmed.
Bridge Loans Keep Deals Moving: Private bridge financing or blanket loans allow homeowners to purchase a new property before selling their current one, avoiding the stress of carrying two traditional mortgages simultaneously.
Always Plan the Exit Strategy: A responsible broker ensures every private mortgage has a clear path back to conventional lending — whether that means improving credit, filing two years of strong tax returns, or waiting for employment verification.
Transparent Broker Fees Build Trust: LendCity caps broker fees at two percent on private deals and reduces or eliminates them when the lender pays a finder's fee, unlike brokers who exploit clients' limited options with inflated charges.
Links to Show References
LendCity Mortgages (Book a Call for Private Lending): lendcity.ca
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Residential Mortgages - Rental Worksheets
Episode 13
Monday, February 2, 2026 • Duration 06:37
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
In this episode of the Close More Deals Podcast, host Scott Dillingham explains how rental worksheets can dramatically increase borrowing power for real estate investors who have been told their debt ratios are too high. Most lenders in Canada only use 50% of rental income when calculating mortgage qualification, which can create a misleading picture of an investor's true financial position. This restrictive calculation method often results in investors being declined for financing even when their properties are cash flowing positively.
Scott breaks down the math with a clear example: if you rent a property for $3,000 per month with basic expenses of $2,200, you might assume you have $800 in monthly cash flow. However, when lenders apply the 50% rental income rule, they only count $1,500 of that rent, showing a loss of $700 on paper despite the property generating real profit. This discrepancy between actual cash flow and calculated income is what causes many investors to hit artificial walls in their mortgage applications.
The rental worksheet solution changes everything for portfolio investors. Rather than using the standard 50% add-back method, specialized lenders with rental worksheets can use closer to 100% of rental income in their calculations. The worksheet compiles all properties in an investor's portfolio, calculating the true surplus or deficit across the entire portfolio. When there is positive surplus income, it gets added to the borrower's regular employment income, significantly boosting qualification amounts.
Commercial Mortgages - NOI - Net Operating Income
Episode 12
Monday, January 26, 2026 • Duration 05:32
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
In this episode of the Close More Deals Podcast, host Scott Dillingham breaks down one of the most critical calculations in commercial real estate financing: net operating income (NOI). Whether your clients are purchasing a business, acquiring commercial property, or investing in real estate, understanding NOI can mean the difference between loan approval and rejection. Scott explains how this fundamental metric helps lenders determine maximum loan amounts and why working with a specialized commercial mortgage team can dramatically increase approval success rates.
Net operating income is calculated by taking a property or business's total income and subtracting all operating expenses. This straightforward formula becomes the foundation for determining debt service coverage ratio (DSCR), which most commercial lenders require to be at least 1.2 or 20% surplus over expenses. Scott walks through exactly how lenders use this coverage ratio to calculate the maximum loan amount a borrower can qualify for when purchasing a business or commercial building.
One of the most valuable insights Scott shares involves how amortization periods dramatically impact loan sizing. Using a real client example involving a trucking facility purchase approaching four million dollars, Scott demonstrates how one bank offering only a 15-year amortization could not provide enough funding for the deal to work. However, another lender offering a 25-year amortization on the same property with the same DSCR requirement resulted in a significantly larger loan amount that made the acquisition possible. This real-world example highlights why comparing multiple lenders is essential for commercial transactions.
Residential Mortgages - Debt Ratios
Episode 11
Monday, January 19, 2026 • Duration 07:24
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
Understanding debt ratios is one of the most powerful yet overlooked tools real estate agents can use to close more deals and help clients secure properties at higher purchase prices. In this episode of the Close More Deals podcast, host Scott Dillingham breaks down the complexities of debt-to-income calculations and reveals how different lenders evaluate these critical numbers in dramatically different ways.
Most agents know that banks typically use a 44% debt-to-income ratio as their benchmark. This means for a client earning $100,000 annually, approximately $44,000 can be allocated toward total debt payments including mortgage, credit cards, and lines of credit. However, what many agents don't realize is that this 44% figure carries completely different meanings at different financial institutions, creating opportunities for savvy agents who understand these nuances.
Scott reveals how certain banks apply hidden handicaps to their debt ratio calculations. Some lenders take credit card limits and calculate payments as if the cards were maxed out, using 3% of the total limit as a minimum payment regardless of actual balances. This seemingly small difference can significantly impact a client's qualification, turning an approval into a denial without the client ever understanding why.
The episode explores how various income sources receive dramatically different treatment across lenders. Child tax benefits, maternity leave income, rental income, and self-employed earnings are all evaluated using different methodologies depending on which lender processes the application. For agents working with first-time homebuyers carrying student debt, understanding how different lenders calculate student loan payments can mean the difference between closing a deal and losing a client.
Commercial Mortgages - Finance Multi-Family With As Little As 5% Down
Episode 10
Monday, January 12, 2026 • Duration 05:22
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
In this episode of the Close More Deals Podcast, host Scott Dillingham breaks down the essential differences between conventional bank financing and CMHC-insured programs for multifamily properties with five or more units. For real estate professionals and investors working with apartment building purchases, understanding these financing options can mean the difference between a deal that works and one that falls apart at the numbers stage.
Scott explains that conventional bank financing for commercial multifamily properties typically limits borrowers to 25-year amortizations and 75% loan-to-value ratios, with some exceptions reaching 30 years and 80% LTV. These restrictions significantly impact how much investors can qualify for because commercial lenders calculate loan amounts based on the property's cash flow rather than personal income. When that cash flow is analyzed over a shorter amortization period, the resulting loan amount is substantially lower than what could be achieved through alternative programs.
Understanding CMHC MLI Standard and MLI Select Programs
The episode focuses on two powerful CMHC programs that transform multifamily financing possibilities. The MLI Standard program offers up to 85% loan-to-value with amortizations extending to 40 years, providing significantly better terms than conventional options. However, the MLI Select program takes these benefits even further by introducing a points-based system that rewards investors for meeting affordability, energy efficiency, and accessibility criteria.
Residential Mortgages - How To Maximize Your Primary Home Purchase Price
Episode 9
Monday, January 5, 2026 • Duration 04:42
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
In this episode of the Close More Deals Podcast, host Scott Dillingham reveals a powerful mortgage qualification strategy that most bank clients never hear about. When homeowners decide to keep their current property as a rental instead of selling, traditional lenders typically only allow 50% of the rental income to count toward qualification—creating an artificial shortfall that limits purchasing power. Scott explains how specialized rental worksheet programs available through select mortgage brokers can use up to 100% of rental income, dramatically increasing what buyers can qualify for when purchasing their primary residence.
The rental worksheet approach fundamentally changes how lenders calculate debt service ratios. Rather than treating half the rental income as a loss on paper, these programs allow brokers to input actual rental figures and subtract real expenses, resulting in a much smaller—or even positive—cash flow calculation. This difference can mean tens of thousands of dollars in additional purchasing power for qualified borrowers. Scott shares a compelling case study where a client was initially approved for only $250,000 through their bank, but after applying the rental worksheet program, qualified for $450,000—nearly double the original amount.
This strategy is becoming increasingly relevant as Canadian real estate markets experience longer selling times and more homeowners choose to hold onto their properties as investments rather than sell. With the ability to purchase a new primary residence with as little as 5% down payment while keeping an existing property as a rental, homeowners can build wealth through real estate without depleting their current equity position. The key distinction is that this program specifically applies when purchasing an owner-occupied primary residence while converting an existing home to rental property—a scenario that major banks simply cannot accommodate with competitive qualification amounts.
In this episode of the Close More Deals Podcast, host Scott Dillingham breaks down one of the most misunderstood challenges in Canadian mortgage lending: financing properties with agricultural zoning or large acreage. Many borrowers and even some mortgage professionals assume that if a property is zoned agricultural, it automatically requires a commercial mortgage or cannot be financed at all. Scott debunks this myth and reveals that multiple residential lenders across Canada will finance these properties when they meet certain criteria.
The key to successfully financing an agriculturally zoned property lies in understanding how lenders assess risk. When a borrower defaults on a mortgage, lenders need to repossess and sell the property to recover their funds. Properties zoned agricultural present a unique challenge because foreclosure timelines differ significantly from residential properties. For agricultural land, foreclosure processes in Canada typically require a full crop cycle waiting period of approximately 12 months, compared to just 3 months for standard residential foreclosures. This extended timeline increases lender risk and explains why many institutions decline these applications outright.
Scott explains that the property's physical surroundings play a critical role in financing approval. A single-family home that is wedged tightly between active farming operations with silos, barns, and agricultural equipment in close proximity will present the most difficulty for financing. However, properties that are simply zoned agricultural but situated with adequate space from intensive farming activity have significantly more financing options available. The distinction between agricultural zoning on paper versus actual agricultural use in practice is crucial for mortgage approval.
Residential Mortgages - Probation
Episode 7
Monday, December 22, 2025 • Duration 04:05
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
In this episode of the Close More Deals Podcast, host Scott Dillingham tackles one of the most common challenges mortgage professionals face: helping clients who are on probation or have less than one year at their current job get approved for a mortgage. Many buyers assume they need years of stable employment to qualify for financing, but Scott reveals the lending solutions that exist beyond traditional bank requirements.
Scott explains that while many major banks require at least one year of employment history, this requirement is not universal across all mortgage providers. When clients receive a decline from their bank due to probationary status or limited job tenure, it should immediately signal an opportunity to work with a mortgage broker who has access to more flexible lending options. The key distinction Scott makes is between clients who simply have a new position versus those with inconsistent employment patterns jumping between roles every few months.
For borrowers on probation, Scott shares that numerous A-lenders will approve mortgage applications regardless of probationary status. This flexibility proves especially valuable for individuals relocating for work, changing careers for better opportunities, or starting positions in new employment categories. The approval process works through CMHC-insured products as well as alternative and private lending channels, giving mortgage professionals multiple pathways to find solutions for their clients.
Scott highlights the role of monoline lenders in providing these flexible mortgage solutions. Unlike traditional banks that offer multiple financial products, monoline lenders focus exclusively on mortgage lending. This specialization allows them to develop more nuanced underwriting guidelines and take a closer look at each application rather than applying rigid policies. Their reduced overhead costs from operating without physical branches also translates to competitive rates for borrowers.
Residential Mortgages - Stated Income / Self Employed Borrowers
Episode 6
Monday, December 15, 2025 • Duration 03:47
This Weeks Rates:
Insured:
5-year fixed: Starting at 3.99%
Variable: Starting at 3.54%
Insurable:
5-year fixed: Starting at 4.09%
Variable: Starting at 3.75%
Conventional:
5-year fixed: Starting at 4.19%
Variable: Starting at 3.95%
CMB:
5-Year: 3.24%
10-Year: 3.75%
In this episode of the Close More Deals Podcast, host Scott Dillingham breaks down two powerful mortgage programs designed specifically for self-employed borrowers and those with non-traditional income. These alternative mortgage solutions help clients who struggle to qualify through conventional lending channels secure the financing they need. Scott explains the 10% down insured stated income program and the 20% down bank statement program—both proven strategies for closing more deals with clients who face income verification challenges.
The first program Scott discusses is the insured stated income mortgage option, which requires just 10% down. This program works through mortgage default insurers including CMHC, Sagen, and Canada Guaranty, allowing mortgage lenders to approve borrowers based on reasonable stated income rather than tax returns alone. Scott shares a recent success story involving a truck driver whose tax return showed only $13,000 in declared income but was approved for $70,000 stated income—a figure validated through industry income tools. The insurer verified this was reasonable compensation for a truck driver and approved the mortgage, enabling a purchase that traditional lenders had denied. This approach is particularly valuable for self-employed individuals, contractors, and commission-based workers who write off substantial business expenses, resulting in artificially low net income on their notice of assessment.
The second program focuses on bank statement mortgages for borrowers with 20% or more down payment. Rather than relying solely on what clients report to the Canada Revenue Agency, this alternative income verification method examines 12 months of business bank statements to calculate actual income. Lenders review all deposits and intelligently subtract legitimate business expenses—like fuel costs for the truck driver example—to determine net available income for mortgage qualification. This bank statement program proves especially effective for cash-based businesses, gig economy workers, and entrepreneurs whose business financials don't fully reflect their capacity to service mortgage debt. Both programs fall under B lender mortgage solutions, which means slightly higher interest rates and lender fees (typically around 2% of the mortgage amount), but they provide critical pathways to homeownership for those with strong income but non-traditional documentation.
In this episode of the Close More Deals Podcast, host Scott Dillingham dives deep into rental property investing strategies, revealing how brokers can help clients qualify for unlimited rental properties without hitting the dreaded debt wall. Many investors start strong with traditional A lenders, but soon face limits on debt-to-income ratios and the number of financed properties, leading to stalled growth in their real estate portfolios. Scott breaks down common pitfalls, like shifting to B lenders for higher debt allowances or resorting to costly private lending, and explains why these options often fall short for long-term rental property financing.
Scott introduces a game-changing approach: leveraging special commercial lending programs that apply commercial underwriting to residential rental properties. This method focuses on the property's cash flow—using debt service coverage ratio (DSCR) principles—rather than personal credit or income, allowing clients to secure loans for as many properties as they can cash-flow positively. With rates typically ranging from 4.5% to 7%, plus a modest 2% fee, this option often undercuts B and private lenders while enabling unlimited scaling. Ideal for investors eyeing duplexes or multi-family units, it emphasizes buying stronger cash-flowing assets to maximize loan-to-value (LTV) ratios up to 65% or more, turning potential weaknesses into opportunities for smarter real estate decisions.
Whether you're a broker guiding first-time rental investors or a seasoned landlord expanding your holdings, this episode equips you with actionable tips on financing multiple rental properties through innovative DSCR loans and commercial lenses. Scott stresses structuring deals in corporations for flexibility and highlights how this strategy supports endless portfolio growth without the high fees or restrictions of traditional paths, making it a must-listen for anyone serious about investment property mortgage rates and sustainable wealth building.
Scott shares a real client example where the rental worksheet approach made all the difference. This client was easily approved for a mortgage through LendCity's specialized program but was subsequently declined for a simple credit card because the credit card company used traditional debt ratio calculations. This demonstrates how powerful the rental worksheet approach can be compared to standard underwriting methods used by most financial institutions.
Not all lenders offer rental worksheets, and those that do each have their own proprietary formulas and expense calculations. Some lenders will use more favourable calculations than others, which is why working with a mortgage broker who specializes in investment property financing matters. A broker experienced in rental property mortgages can match investors with the lender whose worksheet provides the best qualification outcome for their specific portfolio.
For realtors working with investor clients, understanding the difference between standard rental income calculations and rental worksheet programs is essential. When clients come to you frustrated because they have been told their debt ratios are too high or they have too many properties, connecting them with the right mortgage professional can turn a dead deal into a closing. LendCity Mortgages specializes in investment property financing and has access to multiple lenders with rental worksheet programs designed specifically for portfolio investors.
Key Takeaways
50% Rental Income Rule Creates False Shortfalls: Most lenders only count half of your rental income when qualifying for mortgages, which can show paper losses even on profitable properties and artificially limit borrowing capacity.
Rental Worksheets Use Up to 100% of Rental Income: Specialized lenders with rental worksheet programs can calculate your true portfolio performance, adding surplus income directly to your qualification and dramatically increasing purchasing power.
Each Lender Has Different Worksheet Formulas: Not all rental worksheets are created equal, and different lenders apply their own expense calculations and income percentages, making lender selection critical for optimal qualification.
Bank Property Limits Can Be Bypassed: Many banks cap investors at five financed properties, but mortgage brokers can access lenders with higher limits and more favourable rental income treatment for portfolio investors.
Debt Ratios Are Not the Final Answer: Being told your debt service ratios are too high does not mean you cannot qualify. The right lender and the right calculation method can completely change your approval outcome.
Investment Property Specialists Make the Difference: Working with a mortgage professional who focuses on real estate investor financing ensures access to programs and lenders that general mortgage agents may not utilize.
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Scott emphasizes the importance of pre-qualifying deals before investing significant time in offers and showings. For realtors working with commercial buyers, having clients consult with a dedicated commercial lending team first can save countless hours and dramatically improve close rates. The LendCity commercial team offers complimentary phone consultations where they run NOI calculations in real-time, giving buyers immediate clarity on maximum loan amounts for specific properties or businesses.
Beyond the numbers, Scott addresses the emotional component of commercial purchases. Some buyers become attached to properties that simply do not make financial sense based on their NOI analysis. The debt coverage ratio requirement acts as a protective filter, preventing buyers from acquiring underperforming businesses or properties that could become financial burdens. This disciplined approach to commercial lending ultimately protects both the borrower and the lender.
For real estate professionals, understanding how commercial lenders evaluate deals provides a significant competitive advantage. By incorporating NOI analysis into your client consultation process, you position yourself as a knowledgeable advisor who helps clients make informed investment decisions rather than emotional purchases that may not qualify for financing.
Key Takeaways
Net Operating Income Formula: NOI equals total income minus operating expenses, forming the foundation for commercial loan qualification and determining maximum borrowing capacity for business and property acquisitions.
Debt Service Coverage Ratio Standard: Commercial lenders typically require a DSCR of 1.2, meaning the property or business income must exceed debt payments by at least 20% to ensure adequate cash flow coverage.
Amortization Period Impact: Longer amortization periods significantly increase maximum loan amounts; a 25-year amortization can qualify borrowers for substantially larger loans than 15-year terms using identical DSCR requirements.
Industry-Specific Lending Challenges: Certain sectors like trucking facilities and office space currently face tighter lending criteria with some banks scaling back programs, making broker relationships essential for finding willing lenders.
Pre-Qualification Benefits for Realtors: Running NOI calculations before showing properties or submitting offers saves time, increases closing success rates, and prevents clients from pursuing deals that cannot be financed.
100% Financing Possibilities: Depending on loan size, location, business type, and overall income profile, some commercial deals may qualify for up to 100% financing through specialized programs.
Emotional Decision Prevention: The debt coverage ratio requirement acts as a financial safeguard, preventing buyers from acquiring underperforming properties or businesses based on emotion rather than sound investment fundamentals.
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Scott introduces B lenders as a powerful alternative for clients who don't fit traditional banking criteria. These alternative lenders typically accept debt ratios ranging from 50% to 60%, but more importantly, they evaluate income and debts using more favorable methods. B lenders can incorporate guarantor income without attaching to the guarantor's credit bureau, use actual credit card payments instead of the 3% rule, and assess self-employed income through bank statements rather than tax returns.
For situations where even B lenders cannot provide solutions, private lenders offer yet another pathway to deal closure. Private lenders focus less on strict debt-to-income numbers and more on the overall financial story and exit strategy. Whether clients need financing for properties in poor condition, are between jobs, or have other unique circumstances, private lending can bridge the gap that traditional financing cannot cross.
The key message for real estate agents is clear: when a bank tells your client their debt ratios are too high, that's not the end of the conversation—it's just the beginning. By partnering with experienced mortgage brokers who understand the full spectrum of lending options, agents can rescue deals that would otherwise fall through and help clients achieve homeownership goals they thought were out of reach.
Key Takeaways
Debt Ratio Variations: The same 44% debt-to-income ratio means different things at different lenders due to varying calculation methods for credit cards, student loans, and income sources
Credit Card Calculations: Some banks use 3% of your total credit limit as a payment, even if balances are zero, significantly impacting qualification
Income Treatment Differs: Child tax benefits, maternity leave, rental income, and self-employed income are evaluated differently by each lender
B Lender Advantages: Alternative lenders accept 50-60% debt ratios, use actual payments instead of calculated minimums, and allow guarantor income
Private Lender Options: When traditional financing fails, private lenders focus on the overall story and exit strategy rather than strict ratios
Never Accept First No: If a bank declines based on debt ratios, consult a mortgage broker who can explore all available lending options
Links to Show References
LendCity Mortgages: https://lendcity.ca
(00:00) - Introduction to Close More Deals Podcast
(00:34) - Why Understanding Debt Ratios Helps Close More Deals
(01:14) - The 44% Debt-to-Income Ratio Explained
(01:30) - How Banks Calculate Total Debt Payments
(02:13) - Hidden Credit Card Calculation Methods
(02:34) - Student Debt and First-Time Homebuyer Considerations
(03:08) - Income Source Variations Across Lenders
(03:14) - Self-Employed Income Treatment Differences
(03:44) - Why Clients Shouldn't Apply Randomly to Lenders
(04:10) - Introduction to B Lenders and Alternative Financing
(04:30) - How B Lenders Use Rental and Guarantor Income
(04:49) - B Lender Payment Calculation Advantages
(05:18) - Self-Employed Approval Differences with B Lenders
(05:40) - Private Lender Options for Unique Situations
(06:07) - When Private Lending Makes Sense
(06:26) - Closing Remarks and Call to Action
Show Resources:
We would love to partner with you for your referrals.
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Under MLI Select, projects earning at least 100 points can access financing at 95% loan-to-value with amortizations stretching to 50 years. This represents double the amortization period available through traditional bank channels. The program evaluates three key areas: the proportion of units with rents at or below 30% of median income, energy efficiency improvements, and the percentage of accessible units within the property. Higher scores translate to better financing terms, including reduced insurance premiums.
Why CMHC-Insured Financing Changes the Game
Scott emphasizes that the mathematical impact of these differences cannot be overstated. A property analyzed under a 40 or 50-year amortization will qualify for substantially more financing than the same property evaluated under a 25-year period. This means investors can either purchase larger properties or put less money down on their acquisitions. Current interest rates for CMHC-insured multifamily mortgages are running in the low to mid-three percent range, which compares favorably even to residential variable rates.
The trade-off involves a CMHC insurance premium that gets added to the loan amount, similar to how residential mortgage insurance works. However, the combination of lower interest rates, longer amortizations, and higher loan-to-value ratios typically makes this premium worthwhile for most multifamily investors.
The Critical Role of Mortgage Brokers
A key takeaway from this episode is that most banks do not offer CMHC-insured multifamily programs. They only provide conventional financing options, which means investors who go directly to their bank may be limiting their purchasing power without realizing it. Working with a mortgage broker who specializes in commercial and multifamily financing ensures access to the full range of available programs and helps investors maximize their qualification amounts.
For realtors working with multifamily buyers, understanding these financing differences positions you to add significant value to your client relationships. Guiding investors toward the right financing solutions before they start shopping can help ensure deals actually close rather than falling apart during the qualification process.
Key Takeaways
Conventional bank financing for 5+ unit properties typically offers 75% LTV and 25-year amortizations, significantly limiting how much investors can qualify for compared to CMHC-insured options
CMHC MLI Standard provides up to 85% LTV with 40-year amortizations, while MLI Select can offer 95% LTV with 50-year amortizations for projects meeting affordability, energy efficiency, and accessibility criteria
Commercial multifamily loans are calculated based on property cash flow, meaning longer amortization periods directly translate to higher qualifying loan amounts
Current CMHC-insured multifamily rates are in the low to mid-three percent range, often better than residential variable rates
Most banks only offer conventional commercial financing, making mortgage broker relationships essential for accessing CMHC programs
MLI Select uses a points system where projects earning 100+ points qualify for the best financing terms, with points awarded for affordable rents, energy improvements, and accessible unit design
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Scott emphasizes that these rental worksheet programs are not available through traditional banks and require working with mortgage professionals who have access to specialized lenders. For realtors, understanding this program creates a significant opportunity to help clients who might otherwise be stuck renting or unable to find suitable properties within their bank-approved budget. The episode underscores the value of seeking second opinions on mortgage pre-approvals, particularly when clients are navigating the transition from homeowner to landlord-investor.
Key Takeaways
Traditional lenders use only 50% of rental income when qualifying borrowers who are converting their home to a rental property, creating an artificial debt shortfall that limits purchasing power
Rental worksheet programs available through mortgage brokers can use up to 100% of rental income, potentially doubling qualification amounts compared to bank approvals
Homeowners can purchase a new primary residence with as little as 5% down payment while keeping their existing property as a rental investment
A real case study showed a client's approval jump from $250,000 at a bank to $450,000 using the rental worksheet program—an $200,000 increase in purchasing power
This program is specifically designed for primary residence purchases where the borrower is renting out their previous home, not available through major banks
Realtors can significantly increase deal closings by referring clients for second-opinion pre-approvals when rental conversion is involved
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The episode also addresses acreage limitations and how they impact mortgage financing. Most residential lenders will finance properties with up to 10 acres without issue. Some lenders extend their policies to accommodate 15 acres or more, though options become progressively limited as acreage increases. For properties exceeding these thresholds, lenders typically value only the home and a portion of the land, requiring borrowers to fund the remaining acreage through additional down payment. This means a buyer purchasing a property with substantial land may need to bring significantly more cash to closing than anticipated, as the excess acreage value will not be included in the mortgage amount.
Scott emphasizes that being told agricultural zoning requires commercial financing is simply incorrect in many cases. Working with a mortgage professional who has access to multiple lenders specializing in rural and acreage properties can make the difference between approval and denial. LendCity maintains relationships with lenders across Canada who understand these unique property types and can structure financing solutions that work for buyers seeking rural properties with agricultural zoning or large acreage.
Key Takeaways
Agricultural zoning alone does not automatically disqualify a property from residential mortgage financing, as many lenders evaluate intended use and property characteristics rather than zoning classification alone
Properties surrounded closely by active farming operations including silos, barns, and agricultural equipment face the most significant financing challenges due to marketability concerns
Most residential lenders will finance properties with up to 10 acres, with some extending to 15 acres or more, while properties exceeding lender acreage limits require additional down payment for excess land value
Foreclosure timelines for agricultural properties typically require 12 months compared to 3 months for residential properties, which drives lender risk assessment and approval criteria
Appraisers may exclude outbuildings, excess land, and agricultural improvements from property valuation when determining the mortgage amount a lender will approve
Working with a mortgage broker who has access to specialized rural and acreage lenders is essential for finding financing solutions when mainstream lenders decline applications
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The episode emphasizes the importance of mortgage professionals understanding that each client file requires individual assessment. While Scott maintains realistic expectations about approval possibilities, he encourages agents and brokers to explore all available options before telling clients they cannot qualify. Working with the right lending partners can transform what appears to be an impossible situation into a successful mortgage approval.
Key Takeaways
Traditional banks often require one year of job tenure, but many monoline lenders and alternative providers will approve mortgages with less employment history
Probationary status does not automatically disqualify borrowers when working with lenders who have flexible employment guidelines
Inconsistent job history with frequent position changes creates approval challenges, while a single recent job change typically does not
CMHC-insured mortgages, alternative lenders, and private lending all offer pathways for probationary borrowers
Monoline lenders specialize exclusively in mortgage products and often provide more flexible underwriting than traditional banks
Mortgage brokers should assess each client situation individually rather than applying blanket rules about employment requirements
Clients relocating for new positions or advancing their careers benefit most from understanding these flexible lending options
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Understanding self-employed mortgage requirements is essential for real estate professionals and mortgage brokers working with entrepreneurial clients. Traditional mortgage qualification criteria penalize business owners for smart tax strategies, but these stated income and bank statement alternatives recognize the reality of self-employment income. The insured 10% down program offers the best mortgage rates available since it's backed by mortgage insurance, making it an attractive option for first-time buyers and those with limited savings. Meanwhile, the 20% down bank statement program provides more flexibility for established business owners with substantial equity. Scott emphasizes that lenders use tools similar to employment websites to verify that stated income aligns with industry standards—ensuring reasonable income claims while avoiding the rigid requirements that cause traditional bank rejections.
For real estate professionals, mastering these alternative mortgage programs means being able to serve a much broader client base. Self-employed mortgage lenders who understand these products can help contractors, freelancers, real estate investors, and small business owners achieve their homeownership and investment goals despite showing lower taxable income. The key is recognizing when clients need these specialized solutions: multiple bank declines, high write-offs reducing net income, cash income streams, or less than two years in business. By positioning these mortgage loan options as solutions rather than last resorts, mortgage brokers can close deals that competitors miss while building lasting client relationships. Scott's practical examples demonstrate how understanding income verification alternatives transforms challenging files into successful mortgage approvals, ultimately helping more Canadians access home financing regardless of how they earn their income.
Key Takeaways
Insured Stated Income Program (10% Down): Work with CMHC, Sagen, or Canada Guaranty to approve borrowers based on reasonable stated income verified through industry standards—ideal for self-employed clients whose tax returns don't reflect true earning capacity; offers best available mortgage rates since it's insured.
Bank Statement Mortgage Program (20% Down): B lenders review 12 months of business bank statements, analyzing deposits minus business expenses to calculate qualifying income—perfect for cash-based businesses and entrepreneurs with strong actual income but lower reported income on their notice of assessment.
Income Verification Alternative: Both programs solve the common challenge where self-employed borrowers face mortgage rejection despite strong income; lenders subtract reasonable business expenses from bank deposits to determine net income for qualification purposes.
Real-World Example: Truck driver with $13K reported income qualified for mortgage using $70K stated income (validated as reasonable for the profession), demonstrating how these programs overcome traditional lending barriers for self-employed individuals.
B Lender Mortgage Fees: Expect approximately 2% lender/broker fees on the mortgage amount plus slightly higher interest rates compared to A lenders; the 10% down insured program offers better rates than the 20% down bank statement option due to insurance backing.
Target Clients: These programs serve contractors, commission workers, gig economy professionals, cash-based businesses, and anyone with less than two years of documented business history or significant tax write-offs reducing net income.
Links to Show References
LendCity Mortgages (for Pre-Approvals and Alternative Programs): lendcity.ca
Close More Deals Podcast: For more episodes on creative mortgage solutions and closing strategies
(00:00) - - Introduction: Two Programs That Go Hand in Hand
(00:45) - - Stated Income Program Overview: 10% Down Insured Option
(01:15) - - Real Example: Truck Driver Case Study ($13K to $70K Income)
(01:45) - - How Insurers Verify Reasonable Stated Income
(02:05) - - Bank Statement Program: 20% Down Alternative
(02:25) - - How Bank Statement Income Calculation Works
(02:40) - - Subtracting Business Expenses from Deposits
(02:55) - - Comparing Both Programs: Rates and Fees
(03:10) - - When to Use These Programs for Your Clients
(03:20) - - Resources and Getting Started with Alternative Lending
Show Resources:
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Key Takeaways
Avoid the Debt Wall in Rental Investing: Traditional A lenders cap properties based on debt-to-income ratios, but shifting early to cash-flow-focused options prevents portfolio stagnation and bad deals.
B Lenders for Expansion: These allow higher debt ratios and more rental income consideration than banks, serving as a bridge for investors needing beyond four financed properties.
Private Lending Pitfalls: While flexible, expect rates up to 15% and fees from 2-6%, making it a last resort—explore better alternatives first for cost-effective growth.
Commercial Underwriting for Residential Rentals: Use special programs to qualify for unlimited properties by evaluating each asset's income vs. expenses, often ignoring personal credit for DSCR-based approvals.
Cash Flow Drives Loan Limits: Lenders cap LTV at levels ensuring positive cash flow (e.g., 65% on weaker properties), signaling the need for stronger investments to unlock higher financing.
Cost Comparison for Scaling: Commercial rates (4.5-7%) and 2% fees beat B (5-7%, 2-3% fees) and private options, enabling nonstop rental property portfolio expansion at A-lender-like pricing.
Links to Show References
LendCity Mortgages (for Pre-Approvals and Rental Financing Guidance): lendcity.ca
Close More Deals Podcast (Subscribe for More Investing Tips): Search on your favorite platform or visit LendCity resources
(00:00) - - Introduction to Qualifying Clients for Unlimited Rental Properties
(01:12) - - How B Lenders Help Overcome Property Limits in Real Estate Investing
(01:29) - - The High Costs of Private Lending for Multiple Rental Properties
(02:04) - - Unlock Endless Growth with Commercial Underwriting on Residential Rentals
(03:11) - - Debt Service Coverage Ratio (DSCR) Explained: Cash Flow Over Personal Debt
