BCBusiness

March 2015 BCBusiness 53 While housing options out- side the standard real estate categories (single-family detached home, town- house/condo, co-op) continue to be limited, the decidedly unsexy area of financing has, in recent years, become surprisingly diverse. Traditional avenues like banks and parents still dominate, but alternative choices are increasingly pop- ular with new, first-time buyers. Here's a look at five: 1. The Brokered Deal Arranging and funding over $13 billion in mortgages last year alone, B.C. brokers play an important role in the local real estate market. Brokers—whose compen- sation is via lender commissions—have access to options not available to the aver- age homebuyer, whether she decides to go through a financial institution directly or try to research the market on her own. Because of their relationships with a variety of lenders, brokers can negotiate a mortgage tailored to a buyer's needs. "One of the biggest benefits to hiring a broker, says Ajai Soni, senior mortgage broker with Invis and president of the Mortgage Brokers Association of B.C., "is that a mortgage broker shops the market and makes sure the mortgage is the best fit for your particular situation." Often it's the people without a good credit history who realize the great- est benefit in working with a broker. "Most of the time, this type of client will get declined at the major banks," says Sherlock Yam, business develop- ment manager for the Win Lui Group, a Vancouver-based mortgage broker. "But we have access to credit unions, trust companies and other lenders that will approve these clients, through a type of lending often referred to as 'alternate lending.'" With these agreements, mort- gages are usually for a shorter term (i.e., one to two years), and lenders charge a higher rate and sometimes a fee, due to the high risk involved. Think of it as corrective surgery: once the credit is re-established, Yam says, the client can renegotiate the mortgage, this time with a major bank for the best rates. 2. The Mixed Mortgage Despite recent media interest surround- ing this type of arrangement, the mixed mortgage is not a new idea, says Ryan McKinley, mortgage development man- ager for Vancity. "People have always been able to co-own together—what we've tried to do is formalize [the process] so that people can co-own responsibly." While there's no limit to how many people can be included in Vancity's "Mixer Mortgage"—McKinley recently did one where eight couples bought a prop- erty together—usually it's two couples or two individuals or parents and a child, he says. Mortgage terms can be negoti- ated for the agreement as a whole—or, if requested, Vancity will negotiate sepa- rately with each person or couple (for example, if there are two couples listed on the mortgage, one might have a vari- able rate over 20 years and the other, a fixed rate over a 30-year amortization). Ultimately, however, as McKinley notes, "everyone is responsible for the overall debt, but this makes it easier psy- chologically to earmark what's yours and what's theirs." McKinley also thinks that part of the success of the "Mixer Mortgage" can be measured by the number of people who decide against it, after consulting various checklists and scenarios provided by the credit union. "We designed it so mem- bers understand exactly what they're getting themselves into, and they have the conversation before they get into a co-ownership arrangement that isn't actually going to work out for them." 3. Rent to Own Launched in the fall of last year, "Bosa- equity," a program from one of B.C.'s My Kingdom for a House how you pay for your real estate can end up being the most interesting part by Alix Drabek Real Estate 2015 while there's no limit to how many people can be included in vancity's "Mixer Mortgage," usually it's two couples or two individuals or parents and a child

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