Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following statements about securing mortgage financing is true for an investor?

1. A life insurance company is not allowed to offer mortgage financing.

2. Private investors are very restricted by lending laws and not viable.

3. Pension funds provide the majority of residential mortgages in Ontario.

4. Trust or loan companies may offer more flexibility than banks.

5. Investment firms are the primary lenders for commercial properties.

6. Federal credit unions are the best source for large investments.

The correct answer is: Trust or loan companies may offer more flexibility than banks.

The selection highlighting that trust or loan companies may offer more flexibility than banks reflects the reality of the lending landscape in Ontario. This option is correct because these financial institutions often have different underwriting criteria compared to traditional banks, allowing them to accommodate a wider range of investment scenarios and borrowers. For instance, trust companies and loan companies might be more willing to consider unique property types, unconventional income sources, or non-traditional credit histories, which can be particularly advantageous for investors looking to secure financing under specific conditions that banks may not easily approve. This flexibility can be crucial for real estate investors who may find themselves in situations that don't perfectly align with conventional lending standards. As such, trust and loan companies can play a vital role in financing strategies for investors who might require more tailored solutions.