Most Important Step to CMHC MLI Select

Summary

In this episode of the Prus Scot Podcast, Makan Pusco discusses the importance of vetting your mortgage broker or lender before committing to a CMHC MLI Select multifamily purchase. He emphasizes that many mortgage brokers lack the expertise and experience necessary for these intricate loans, potentially leading to costly mistakes. Pusco advises buyers to thoroughly investigate the qualifications of their broker to avoid issues like delays, financial loss, or legal complications. With insights on the CMHC MLI Select program's complexities, this podcast is a must-listen for those navigating real estate investments in Edmonton.

Takeaways

• 😀 Properly vetting your mortgage broker or lender is crucial when pursuing a CMHC MLI Select multifamily purchase.
• 😀 Not all mortgage brokers have the required experience or expertise in handling CMHC MLI Select loans, even though they might be licensed to do so.
• 😀 Always ask your mortgage broker about their personal experience with CMHC MLI Select loans and their rate of success in securing approval.
• 😀 Some mortgage brokers may not respond to these specific questions, which can be a red flag for their level of expertise in this area.
• 😀 Many buyers are unfamiliar with the complexities of CMHC MLI Select and might trust a broker who helped them with residential properties, but this doesn't guarantee success with multifamily transactions.
• 😀 CMHC MLI Select is an intricate program with many layers, and it’s constantly changing. Knowledge of these changes is essential for a smooth transaction.
• 😀 CMHC's communication is often delayed, and changes to the program may not be released until after they’ve already impacted transactions.
• 😀 Without the required Certificate of Insurance (COI) for a CMHC MLI Select loan, lenders won’t provide funding, which could result in significant consequences for the buyer.
• 😀 If your COI is missing on closing day, you could lose your deposit or be sued by the seller for not fulfilling the purchase agreement.
• 😀 In some cases, missing COI could lead to the need for a larger down payment (25%) or a bridge loan, which can be expensive and messy.
• 😀 Always interview and thoroughly vet mortgage brokers or lenders before proceeding with a CMHC MLI Select purchase to avoid costly issues and ensure a successful transaction.

Q & A

What is the main topic discussed in the podcast episode?

The main topic of the podcast episode is the importance of vetting your mortgage broker or lender before entering a CMHC MLI Select multifamily purchase.

Why does the speaker believe vetting your mortgage broker is critical?

Vetting your mortgage broker is critical because it ensures they have the specific expertise to handle CMHC MLI Select loans, which are complex and constantly changing. A poorly chosen broker could lead to major financial issues or delays in the transaction.

What are some red flags when dealing with mortgage brokers who claim to handle CMHC MLI Select loans?

Some red flags include receiving vague or unresponsive answers when asking about the broker's experience with CMHC MLI Select loans, or when the broker cannot provide specific examples of their past success in getting these loans approved.

What specific questions does the speaker recommend asking a mortgage broker before proceeding with a CMHC MLI Select loan?

The speaker recommends asking the broker how many CMHC MLI Select loans they have personally facilitated, how many deals they are working on currently, and their success rate in turning applications into approved loans.

Why does the speaker emphasize the importance of having boots on the ground for CMHC MLI Select loans?

The speaker emphasizes this because CMHC MLI Select is a complex and intricate program that requires up-to-date knowledge of its constantly changing rules and regulations. A broker who is not actively working with these loans could miss critical details and cause delays or mistakes.

What can happen if a CMHC MLI Select application is not processed correctly?

If a CMHC MLI Select application is not processed correctly, the buyer may not receive the Certificate of Insurance (COI), which is required for the loan to close. This could lead to losing the deposit, being sued by the seller, or needing to pay a larger down payment or use a bridge loan, causing significant financial and legal problems.

What is the consequence of not obtaining the Certificate of Insurance (COI) in a CMHC MLI Select transaction?

Without the COI, the transaction cannot proceed as planned. The buyer could lose their deposit, face legal action from the seller, or be forced to come up with a much larger down payment, complicating the deal and potentially causing the buyer to back out.

What is the importance of interviewing a mortgage broker when using CMHC MLI Select?

Interviewing a mortgage broker is important to ensure they have the specific experience and expertise needed to handle CMHC MLI Select loans. A knowledgeable broker can make the process smoother and help avoid costly mistakes or delays.

Why does the speaker recommend Andrew Galler for CMHC MLI Select loans?

The speaker recommends Andrew Galler because they believe he is highly skilled and knowledgeable in handling CMHC MLI Select loans. The speaker emphasizes that this recommendation is not a paid sponsorship but based on Galler's competence and track record.

How does CMHC’s communication affect the processing of CMHC MLI Select loans?

CMHC’s poor communication can cause delays and confusion. For example, a change in the program was announced late, which affected many transactions, including the speaker's own, causing frustration and delays in processing.