Broker FAQ
PRODUCT
WHAT LENDING PRODUCTS DOES RESCO OFFER?
We offer 1st, 2nd and bundles mortgages for RESIDENTIAL properties, typically with one-year terms that are either open or closed for repayment. They usually carry a fixed interest rate and require monthly interest-only payments.
However, we are happy to offer custom terms, such as term length of up to two years, hybrid prepayment (i.e. closed for first six months and open of the last six months), prepaid interest, etc.
We also offer bridge loans which typically have term lengths of three to six months, and are open to repayment.
DOES RESCO LEND AGAINST INDUSTRIAL OR COMMERCIAL PROPERTIES?
We offer RESIDENTIAL MORTGAGES only.
DOES RESCO OFFER BUSINESS OR COMMERCIAL LOANS?
As a mortgage lender, we only lend against real estate. So we can do an equity takeout (ETO) against your home or other residential property, which will be a much simpler process than applying for business loans with financial institutions.
UNDERWRITING
HOW CAN I SUBMIT A MORTGAGE APPLICATION TO RESCO?
We accept mortgage applications from licenced mortgage brokers and agents only, via Filogix, Velocity and email at Please include a completed and signed mortgage application along with the most recent (within 90 days) credit bureau and appraisal if available. A brief description of the purpose of the fund and the exit strategy would expedite the approval process.
WHAT IS RESCO’S MINIMUM BEACON SCORE REQUIREMENT?
We do not have pre-set minimum beacon score requirement because we understand bad credit can happen to good people. RESCO can come to the rescue and help your clients get back on track with financial situation, whether it be a costly divorce, lengthy illness, temporary job loss, business venture that went south, or simply getting overextended with expenses and credit cards. Our flexibility around a minimum beacon score also makes it easier for new immigrants and non-residents, who have yet to establish credit yet in Canada, to obtain a mortgage.
Please explain in your submission note the reasons for any extenuating circumstances, collections or late payments.
WHAT IS RESCO’S MAXIMUM GDS/TDS REQUIREMENT?
We do not have any pre-set maximum GDS or TDS ratios because our underwriting focuses on the equity and marketability of the property rather than debt servicing ratios. However, the deal still needs to make sense and the client should demonstrate affordability and the ability of making mortgage payments on time.
DOES RESCO REQUIRE VERIFIABLE INCOME?
No, we do not ask for employment letters, Notice of Assessment, payslip, etc. This removes substantial barriers from self-employed individuals and anyone on commission or cash income to qualify.
WHAT IS RESCO’S MAXIMUM LOAN TO VALUE (LTV)?
The maximum LTV we will consider is 85%. If the client has more than one property, we can blanket multiple properties to bring the overall LTV down and allow the client to borrow more.
MY CLIENT NEEDS A MORTGAGE FOR A NEW CONSTRUCTION PROPERTY. WILL RESCO ACCEPT THE APPRAISED VALUE TO CALCULATE THE LOAN-TO-VALUE?
We will use the Appraised Value up to 100% of the purchase price on pre-construction purchases! Here is a recent example:
Purchase price: $500,000
Appraised value: $600,000
Loan amount: $450,000
LTV: 75% ($450,000/$600,000)
* Please keep in mind, the loan amount cannot equal or greater than the purchase price as we want to see the client has some personal funds invested in the property.
IS RESCO WILLING TO LEND SECOND MORTGAGES BEHIND COLLATERAL FIRST MORTGAGES?
Yes, we will lend a second mortgage behind an existing first mortgage that is a collateral charge. We will use the advanced amount (not the principal amount) to calculate LTV.
Example:
If the registered amount of the mortgage is $800,000, but the mortgage balance is only $400,000 (and the mortgage is not re-advanceable), we will use $400,000 to calculate the LTV.
If there is a line of credit component with the mortgage, the limit of the LOC is $200,000 and the balance is only $120,000, we will use $200,000 the limit plus $400,000 mortgage to calculate the LTV.
IS RESCO WILLING TO LEND ON SECOND MORTGAGES BEHIND CHIP REVERSE MORTGAGE?
Yes, we will lend a second mortgages behind a first mortgage that is a CHIP reverse mortgage, up to 65% LTV if funded at the same time and up to 75% LTV if the existing mortgage is already a CHIP reverse mortgage.
Please note that there are some rules for fees when we bundle our second mortgage with a Home Equity Bank reverse mortgage as a first mortgage. For example, the total fee (lender and broker fees) cannot be more than 5% of the second mortgage amount and cannot exceed $5,000. If the fees exceed above, the APR cannot exceed 18%, and may need approval from Home Equity Bank.
DOES RESCO LEND ON TENANTED RESIDENTIAL PROPERTIES THAT ARE NOT OWNER-OCCUPIED?
Yes, we will lend on rental and tenanted residential properties.
CAN RESCO ADD MY BROKER’S FEE TO YOUR LENDER’S FEE?
Yes, we can add your broker’s fee to our lender’s, and pay it to your brokerage after closing in the usual course. However, we do not recommend that you charge your entire broker’s fee under our lender’s fee, as doing so may disqualify you from E&O coverage should a claim arise in the future. Let the underwriting team know in advance how you want to structure the broker fee.
MORTGAGE TERMS AND CONDITIONS
HOW DOES RESCO COLLECT AND ADMINISTER MONTHLY PAYMENTS?Monthly mortgage payments are collected via Pre-Authorized Debit on the first of each month by 5C Capital Inc., a provincially licenced administered Mortgage Administrator (FSRAO License #12431).
Where appropriate or if requested by the borrower, we also accept upfront monthly payments which will be deducted from the mortgage advance. That way, the borrower does not need to worry about making payments throughout the term.
We can also structure upfront payments. For example, if the monthly payment is $1,400 and the client is only comfortable making a $1,000 monthly payment. We can then collect $400x 12 months = $4,800 interest upfront from the proceeds.
Please let the underwriting team how you want to structure the interest upfront. RESCO will try to tailor a solution to suit your clients’ needs.
RESCO’S RATES ARE COMPETITIVE BUT NOT THE LOWEST, WHY IS THAT?
A lower rate certainly sounds better than a higher rate. However, that is not the only thing you should be considering when shopping around for your client’s mortgage. Some mortgages that appear to have a lower rate can sometimes cost your clients more compared to mortgages that come with a higher rate. There could be other fees that will all add up to the total cost of borrowing. At RESCO, we do not charge any administration fees, commitment fees, underwriting fees, etc. So the rate we disclosed on our commitment is truly what your client is going to pay.
CAN RESCO INCREASE THE LENDER FEE TO OFFER A LOWER INTEREST RATE, ALLOWING MY CLIENTS TO HAVE A MORE AFFORDABLE MONTHLY PAYMENT?
Yes, we can. We can also do this the other way around as well. Sometimes the clients want to get more money from the proceeds for investment purpose and they do not mind making a larger monthly payment. In this case, we will increase the interest and lower the lender fee.
WHAT IS YOUR EARLY OR LATE PAYOUT PENALTY?
RESCO offers 5-days grace periods before and after the maturity date to help borrowers avoid early or late payout penalties.
Our OPEN mortgages have no prepayment penalty if one-month notice of the payout is provided.
Our CLOSED mortgages have prepayment penalties of three months interest.
We understand it is very difficult to arrange funding for a refinance or closing for a sale to be on the exact maturity date. At RESCO, all clients have 10 days before and after maturity to discharge without any prepayment or late payout penalty. If your clients are still unable to discharge the mortgage within the 20-day window, we may have other flexible solutions to help your clients.
We also offer custom tailored terms at funding to help you find the best fit solution for your client. So, if your client only requires a 3-6-month term, because they are selling their home, we can offer the reduced term so the lender fee will be lower, and the client will avoid penalty.
HOW CAN I FIND OUT MORE INFORMATION OR PROMOTIONS FROM RESCO?
Visit our website at www.RESCOMIC.ca for the general guidelines, lending areas, approved appraisers list etc.
Send us an email at deals@rescomic.ca and we will add you to our distribution list for future promotional emails.
Contact one of our underwriters via email or phone call to discuss any potential deals that you are working on. Our underwriters will be here for you to discuss, help package or structure the deals and provide the best solutions for your clients.