What Is A Monoline Lender?
As the largest independent mortgage brokerage in Canada, we partner with “Tier A” lenders which include major banks and Monoline lenders. The lowest rates we advertise are often offered by Monolines, like THINK Financial. This is because they have simple business models with low overhead and focus strictly on residential mortgage clients.
You may wonder if there are any risks with using a Monoline; there really aren’t any. They are in the business of lending money, not taking it, so they are holding onto all the risk. Monolines are also regulated by the government just like the major banks so they must follow similar disclosures and lending guidelines. In fact, many Monolines receive their funding from major banks.
What if a Monoline terminated their business operations? Another financial institution would take over their mortgages. For example, this happened twice in the last four years when Scotiabank acquired Tangerine (formally known as ING Direct) along with FirstLine who is still in the process of transferring their mortgages over to CIBC. All of those mortgages stayed as-is with virtually no impact to the borrower.
There are more benefits to using a Monoline than just a low rate, such as, smaller penalties in the event you have to break your mortgage, pre-payment options that are typically better than the banks, and turn around times for approvals that are much faster.
Every client has a unique situation and has different mortgage needs, but all deserve the best rate. It is our duty to assess each circumstance thoroughly to determine which lender best suits them and quite often, it’s a Monoline lender that we recommend.
For more information visit www.truenorthmortgage.ca