Below are the several steps, documents and timing required in order to set up an Arm’s Length Mortgage. The fastest way to get your money working for you is to have your RRSP funds in a cash position in a self directed RRSP account that supports Arm’s Length Mortgages (see #5 below).
1- Fill out an Investor Expression of Interest Form
This allows us to get to know a little more about you and what you are looking for in an investment.
Timing: 15 minutes
Form: Expression of Interest
2- We conduct a brief telephone interview
We like to get to know our potential investors, so we like to follow up with a brief call.
Timing: 15-20 minutes
3- We send you the Investment Package
4- Fill out an Investor Mortgage Commitment Letter
Timing: 15 minutes
Form: Mortgage Commitment
5- Sign up for a Self-Directed RRSP account
All RRSP mortgages must be held in a registered (RRSP, TFSA, RRIF, LIRA, etc) self-directed account by a Trustee who supports Arm’s Length Mortgages. You can set one up at one of these financial institutions:
Either of these institutions will work, however, I recommend Olympia Trust as I know their processes in and out. Please note that it can take up to 3 days to get the account up and running.
Timing: 2-3 days
Form: Olympia Trust RRSP Application
6- Liquidate existing investments to “cash”
If you’re RRSPs are invested in Mutual Funds or another instrument like GICs, then you must liquidate them in “cash” form. This DOES NOT mean to withdraw them from the RRSP umbrella.
Timing: 1-2 weeks (depending on financial institution)
7- Transfer “cash” to the new Self-Directed RRSP account
Timing: 2-6 weeks
Forms: Olympia Transfer Form
8- Negotiate the terms of the mortgage
Timing: 1-2 days
Forms: ASP Canada Mortgage Worksheet
9- Get independent legal and accounting advice
We always recommend that you get independent legal advice on any type of investing.
10- Sign Arm’s Length Mortgage Package
We will pre-populate the following documents and email them for you to sign and return. You can return signed documents via fax (or scan and email).
- Letter of Direction
- Arms Length Declaration
- Arms Length Mortgage Agreement
11- Submit all documents and register the mortgage
Our lawyer will submit all the required documents to the Trustee and register the mortgage. Once the mortgage is registered, you will get a copy of all the documentation for your records, including:
- Mortgage (verifies your security on the investment)
- Appraisal (verifies the Loan-To-Value)
12- You’re Done!
You will receive quarterly payments and watch your investments grow in a consistent, predicable manner. As always, if you have any questions regarding your investment, we are only an email (or phone call) away.
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