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What is a Monoline Lender and How is it Different from a Bank?
November 27, 2023 | Posted by: Bailey Simner
I frequently come across questions regarding monoline lenders, particularly in relation to who they are, their advantages, and the process of accessing their services.
Let's delve into it:
To start, the term 'mono' signifies 'one,' indicating that a monoline lender specializes exclusively in mortgage lending. Unlike traditional financial institutions, they refrain from offering additional banking services or promoting investments. Instead, their exclusive focus lies in activities related to mortgages. Within the Canadian mortgage market, they play a pivotal role in expanding consumer options and fostering competitiveness among banks.
Now, the question arises: How can one secure a mortgage with a monoline lender?
My primary duty is to secure the optimal mortgage for you—a combination of favorable interest rates and features that ensure comfortable living with long-term savings. In pursuit of this objective, I collaborate with major banks, credit unions, private lenders, and various monoline lenders. Opting for a monoline lender can prove advantageous for several reasons:
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1. Lower Penalties: Monoline lenders typically impose significantly lower penalties for breaking a fixed-rate mortgage compared to banks. In the event of a change in your circumstances requiring a mortgage exit, this could lead to substantial savings.
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2. Ease of Transfer: Mortgages with monoline lenders are registered as 'standard charges' on title rather than 'collateral charges.' This differentiation simplifies and reduces the cost of transferring your mortgage to another lender at renewal, facilitating a better deal.
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3. Competitive Rates: Monoline lenders, lacking physical branches, maintain lower overhead costs, enabling them to focus on offering competitive interest rates.
It's crucial to note that most monoline lenders are accessible exclusively through mortgage brokers, contributing to the increasing trend of Canadians turning to brokers for their real estate transactions. Feel free to reach out for a comprehensive review of your lender options for your next mortgage.
Some of the monoline lenders in our portfolio include Merix, First National, MCAP, RMG, RFA, Radius, and CMLS.
Bailey Simner
INVIS Mortgage Professional
YOUR MORTGAGE BEGINS HERE
204-346-2357
