Pillar Financial SVP on the huge opportunity available to brokers looking for deals in more remote areas
This article was produced in partnership with Pillar Financial
Fergal McAlinden of Canadian Mortgage Professional spoke with Pillar Financial’s senior vice president Agostino Tuzi on what mortgage brokers need to keep in mind when it comes to rural and off-grid lending
It’s a common misconception among many mortgage brokers that when it comes to rural or remote locations, there simply aren’t any lenders that are willing to provide financing in those areas.
That’s a perception that Pillar Financial is eager to change, with the Ontario-based lender’s senior vice president Agostino Tuzi (pictured) telling Canadian Mortgage Professional that its expertise and track record in rural locations across the province has made it a sure-fire hit among the broker community.
The company, which bills itself as a versatile and agile solution for Ontario mortgage brokers, offers customized financing for building and construction projects and flexible options on the residential side, servicing borrowers across the entire province.
Tuzi said significant opportunity existed for Ontario mortgage professionals across more rural areas, and that they should keep in mind that lending in those locations is readily available through Pillar.
“Brokers shouldn’t assume that because a property is remote, or off-grid, or on an island, that it can’t be done,” he said. “There’s a deal there for you, so don’t think you can’t get a deal done because it’s a construction project too far out of the way.”
One of Pillar’s key differentiators, according to Tuzi, is that unlike many lenders based predominantly around urban and city centres, the company has an excellent record putting together deals in rural areas that other institutions might not consider financing.
“We have rural expertise, number one, and we have construction expertise,” he said. “Our underwriters are very well versed in putting a deal together for construction financing and rural construction. We’ll do log homes, we’ll do islands, we’ll do off-grid – we do what other lenders won’t do.”
In recent years, the skyrocketing cost of housing in Ontario’s city centres and most populated urban areas has led many residents to turn their attention toward other parts of the province, with average Toronto house prices having recently passed the $1.3 million mark.
That so-called “urban exodus” from busy city centres is a trend that’s only been accelerated by the COVID-19 pandemic and the realization that remote work can be carried out effectively from anywhere.
Over 64,000 people left Toronto for other parts of Ontario between mid-2020 and the same period in 2021, according to Statistics Canada, spurred by the pandemic and the ability to access more spacious housing in rural areas.
Those are factors that will contribute to even further opportunity in remote financing, Tuzi said, with a thriving alternative market already springing up in off-grid parts of the province because of Ontarians’ desire to move out of the city.
“As housing affordability continues to erode, more and more people are moving further away from city centres and urban areas, with the ability to work from home – and increased broadband strength in rural locations – making that possible,” he explained.
“There’s just a lot of opportunity for brokers to pick up this type of market share. Most brokers are chasing alternative deals, and there’s a whole untapped market in the rural space. They’re leaving money on the table by not taking advantage and trying to get these deals placed.”
The potential that exists for brokers in the niche, Tuzi said, means it would be a mistake to assume that financing in rural areas can’t be secured just because many institutional lenders don’t offer mortgage solutions or construction options in those locations.
In fact, even if some lenders will facilitate rural construction, Tuzi noted that their LTV (loan to value) is often capped at 65%, while Pillar will go as high as 80% in many locations across Ontario.
“If your traditional lender says no due to the location, don’t assume there’s not a lender to assist,” he said. “Pillar can help.”
Agostino Tuzi is senior vice-president of Pillar Financial, an alternative mortgage lender in Canada.
