Frequently Asked Question

Frequently Asked Question

Have you been rejected by the banks? Need help financing the purchase of your home, consolidating your debts, or investing in a new property, and you don't know where to turn? We built Rateco to help you! Rateco is a mortgage brokerage - but then again, we're not your typical brokerage. Rateco's 'reverse auction' encourages lenders to bid against each other to win your business, with full transparency. You can literally watch yourself save money as rates get pushed down!

A private mortgage is a non-bank mortgage, typically funded by investment corporations or private individuals.

As opposed to institutional lenders like banks, private lenders are not regulated by the Bank of Canada and as such can set their own lending requirements and criteria. This permits private lenders to focus more on borrowers’ assets rather than the individuals who are borrowing the money, providing more leniency in the approval process.

Private mortgages are generally set up as short-term, interest-only loans from investment corporations or private individuals. Rather than a borrower's credit history, private mortgages are approved largely based on a borrower's equity.

Private lending in Canada is designed to make the approval process easier on the borrower compared to the major banks. Provide your approximate credit score, income and employment status, and equity status and our mortgage agents will work one-on-one with you to get you approved at the lowest rate.

Unless there are specific restrictions on the use of your funds explicitly written into your loan agreement, you are free to use the funds for whatever you like!

Private mortgage lenders are generally a small company or individual who provides mortgages to borrowers for their own personal benefit. Because they are not associated with the Bank of Canada, private lenders set their own qualification standards, providing financing to borrowers that have no access to credit through more traditional lending institutions. As a result, a relationship between a borrower and a private lender can be mutually beneficial.

In one word - transparency. Rateco provides you the ability to watch lenders bid against one another in real-time. This allows you as a borrower to see all your mortgage options laid out right in front of you. We work hard to ensure you're fully informed throughout the process by providing a personal mortgage agent who will work with you one-on-one from start to finish.

Most lenders have standard due diligence requirements for all potential borrowers. This typically includes:

1. Last two pay stubs for each borrower
2. IDs for each borrower
3. Property tax statement
4. Proof of home insurance
5. Confirmation of employment letter
6. Listing on the Property (if it was purchased within the last year)
7. An appraisal
8. The Notice of Assessment for the most recent 1 - 2 years - your NOA is your composite tax filing with Revenue Canada
9. Your Credit Report - Rateco arranges for this to be pulled automatically from Equifax at the time of your submission.

Depending on the lender and the specific terms or situation of your loan, you may be asked for additional items. Your Rateco Mortgage Agent will help you to compile these documents and pass them through to your selected lender in order to conduct due diligence."
our time working with us.

With private lending the greatest factor in determining your borrowing capacity is your property value and the equity in your home. Rateco will work with you to ensure all your financing options are explored and the right product is provided to maximize your borrowing power.

Rateco will work with you to evaluate your equity, income, credit score, and property value in order to determine your mortgage rate. As each individual situation is unique, it's difficult to predict what your exact rate will be without knowing the above.

We can promise our proprietary auction system will ensure you receive the best rate on your mortgage at no cost to you. At Rateco we're looking to build transparency, trust and competition into the private lending market and become the obvious choice for borrowers fighting to save their money.

Most approvals should be formalized within 5 business days, but can be as quick as 12 hours should urgency be required.

Your dedicated Rateco Mortgage Agent will work with you to ensure all required due diligence materials are available and accurate in order to expedite your mortgage funding.

As private lenders are not regulated by the Bank of Canada their lending requirements and criteria are more lenient than major banks. This permits private lenders to focus more on borrowers’ assets rather than the individuals who are borrowing the money. In gaining an approval for your mortgage Rateco will evaluate the following:

Income & employment

A home equity loan is a loan in which the borrower uses the equity of their home as collateral to secure financing. Using your home as collateral allows for greater leniency in qualification standards, as well as greater access to larger sums of financing. In a home equity loan, once the funds are received you're free to use them however you please.

Second mortgages are a type of home equity loan allowing homeowners to borrow money from the equity in their home, without refinancing their current mortgage. Second Mortgages carry higher interest rates than first mortgages.

Home equity is calculated by subtracting the amount you still owe on your mortgage from your home's current market value.

home's market value - mortgage balance remaining = home equity

As is standard with Canadian private mortgages the borrower pays a 'broker fee' only once their deal has been completely funded.

For any mortgages under $100,000 Rateco charges $2,000 as a broker fee.
For any mortgages over $100,000 Rateco charges 2% as a broker fee.

At Rateco we pride ourselves on our complete transparency, promising no hidden fees or unexpected costs. You will find out upfront what Rateco is going to earn from your deal, and it is worked in to your APR and monthly payment calculations.

Yes! Private lenders place greater emphasis on your personal equity than your credit score. A strong credit score may help you in obtaining a lower mortgage rate, but will not be our primary focal area in determining your eligibility for a mortgage.

Absolutely! At Rateco, we often work with borrowers who are new to the country or don't yet have status here. We'll work one-on-one with you to find a borrowing solution to suit your needs.

Yes, you can! At Rateco we often work with seniors or retired Canadians who don't fit with a bank's lending model. While banks are most comfortable lending to employed individuals with regular income, private lenders base their lending decisions on your personal equity. This allows private lenders to consider applications from other types of borrowers, including senior citizens and retired individuals.

Rateco works with many borrowers who are between jobs or currently unemployed. While Canadian banks penalize potential borrowers who cannot demonstrate gainful employment, the private lending market focuses largely on the value of your home as collateral against the loan. This allows us to provide mortgages to those borrowers without traditional employment.

Yes, Rateco works with many borrowers who are self-employed. By focusing primarily on the equity in your home, private lenders have greater leniency when it comes to your personal income or employment situation. This allows Rateco to provide financing to those borrowers without traditional employment.

Loan-to-value (LTV) is an assessment of lending risk private lenders evaluate to determine the level of liability they would be taking on in providing a given loan. It will also contribute to your interest rate. A higher LTV increases the risk the lender is taking on, generating a higher interest rate.

Rateco works with loan-to-values of up to 90% on refinances and 95% on home purchases.

LTV = Mortgage Amount / Appraised Property Value

Simply divide the amount needed for your mortgage by the appraised value of your property.

Rateco works with loan-to-values of up to 90% on refinances and 95% on home purchases.

Unfortunately not at this time. Rateco will work with international borrowers but only involving Canadian properties.