About lender
RFA (Realty Financial Advisors) was founded in 1996 to provide Canadians with real estate investment products. Initially, it was an investment firm offering customers debt financing transactions, REITs, retirement homes, and direct investments in office, retail, industrial and multifamily residential properties. However, in 2018 RFA expanded into the mortgage lending market, and since then, it has offered different mortgage solutions. Today the RFA mortgage lending business is operated by RFA Mortgage Corporation and RFA Bank of Canada. The first specializes in Prime Lending (insured, insurable and uninsurable), while the second is a balance sheet-based alternative mortgage lender. The company doesn’t have many products and services. Instead, they have two main directions of financial solutions: mortgages and investment tools (GICs).
Fixed Rate Mortgage
The company offers two types of mortgages, and the first is the mortgage with fixed rates. Generally, customers use it for a new home purchase. Fixed rates mean their mortgage payments will be the same month to month, so they do not need to worry about the company’s prime rates. Even if RFA raises its rates, customers will not be affected. Customers will have the security of a fixed payment but won’t be able to take advantage of any dips in the prime rate. Fixed Rate Mortgages are given for a term between 1 and 5 years, and rates start from 4,59%. However, RFA Bank of Canada posted rates are provided for information only and are not guaranteed for any particular product.
Variable Rate Mortgage
The company also offers mortgages with variable rates, meaning customers’ mortgage payments can change monthly depending on the Prime Rate. As a result, if the prime rate falls, customers will pay less, but if it rises, they will have to make larger payments. As a result, customers can save money or end up paying more for their mortgages.
Cashable GICs
This tool can be a smart investment for short-term goals. Customers will have a guaranteed rate of return and will be able to save on significant purchases, living costs, or retirement. The company offers a one-year Cashable GIC, redeemable after 90 days, and allows customers to access their funds easily. After the end of the period, GIC can be easily cashed out at any time without fees and penalties.
Non-Redeemable GIC
This tool provides customers with a fixed rate of return for a specific term, with both principal and interest guaranteed. Customers can choose different terms and repayment frequencies. Terms vary between 1 and 5 years and can be cashed out after the end of the term.
Features
The company was initially founded as a real estate investment firm, but in 2018, it expanded into the mortgage lending market. It operates through RFA Mortgage Corporation and RFA Bank of Canada. Both specialize in different ways of mortgage lending.
RFA provides customers with two financial products: residential mortgages and investment tools (GICs). Fixed-rate mortgages and variable-rate mortgages represent residential mortgages. Customers can adjust the payment date and repayment frequency, make additional payments of 20% to their mortgages annually and increase their payments to up to 20% of the principal and interest payments annually. These options apply to all types of mortgage products. The company offers customers terms starting from 1 year to 5 years, and rates depend on the terms. Customers get more flexibility with such short terms; they can switch mortgage plans, switch providers, make a larger payment on their mortgage, or pay off their mortgage entirely. Moreover, the company allows customers to refinance and renew their mortgages. Finally, the company works with mortgage brokers, and if customers already have a broker, it will be easier for them to get approved for a mortgage.
Customers are also offered to open an investment account to save and grow their money for a short period. The company provides two variations of GICs: Cashable GICs and Non-Redeemable GICs. Rates depend on terms of GICs and mortgages but also a type of GIC. For example, customers can open a Cashable GIC only for one year and will have a rate of 0,20%. It isn’t high, but after 90 days, customers will have access to their funds.
On the other hand, customers have a non-redeemable version available from 1 to 5 years. Rates are also higher: 4,17% - 4,52%, but they depend on terms and repayment frequency. In addition, the company offers customers different investing ways: laddering deposits by different maturity dates and diversifying by term.
The company is a member of CDIC, so their GICs are eligible for deposit insurance protection. Also, they offer Guaranteed Investment Certificates through a national network of Investment Industry Regulatory Organization of Canada (IIROC) regulated deposit dealers, so all their investment products are secured.
Pros and cons
Pros
The company offers two types of mortgage rates;
Terms and rates are flexible;
Customers can make changes in repayment frequency, date of payment, etc.;
The company works with brokers;
Customers can track and manage their mortgages online;
Application is less strict than in banks;
Customers can pay off their mortgages early.
Nevertheless, the company still has several disadvantages that can impact customer decisions.
Cons
The list of provided services is small;
There are no pre-approval options;
Adjusting variable rates can be delayed;
Relatively high rates;
The company doesn’t provide any commercial solutions.
Loan conditions
If customers already have a mortgage broker, the application will be more accessible. Their broker can introduce them to RFA’s products, or customers can contact RFA’s customer service to speak with a representative. However, there are no online application options. Still, several forms can be required for application, such as authorization to disclose information form identification verification form, mortgage application, and third party information form. Customers can fill out the required one and send it to the company’s representative. Also, they may use online calculators to realize how much they can afford. Requirements are not very clear, but typically, the company requires customers to be over the majority, be Canadian citizens, and provide personal information like name, address, phone number, email, and ID. Also, they may ask to provide employment details like their current job, income, employment history, and financial details like assets and liabilities.
The company provides two types of mortgages: variable rate and fixed rate. Fixed rates vary between 4,59% and 4,89%, depending on the mortgage term. The company provides mortgages with terms from 1 to 5 years with fixed mortgages and only 5-year mortgages with variable rates. Repayment options are flexible. Customers can pay monthly, semi-monthly, bi-weekly, or weekly.
Methods of loan funding
Funding methods depend on mortgage brokers that the company works with.