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Looking to buy your next home? The latest mortgage financing available

By
Real Estate Sales Representative with Berkshire Hathaway HomeServices Toronto Realty

 












As of September 2012, these are the Mortgage Financing for what's available through some lenders. The information is provided by Rosanna Younan -Mortgage Agent at Premiere Mortgage Centre.

 

Amortizations:

  • Insured mortgages: maximum 25 years
  • Conventional mortgages: maximum 35 years
 
Minimum down payment:
 
  • 5% for owner-occupied properties  (maximum 2 units)
  • 10% for owner-occupied properties (3-4 units)
  • 20% for rental/investment properties (up to 5 units)
  • 20% for properties over $1 Million
 
Maximum refinance:
 
  • 80% of property value
 
Debt Servicing Ratios for Insured Mortgages:
 
  • Both gross debt servicing (GDS) and total debt servicing (TDS) ratios are used to qualify borrowers
          -for credit bureau beacon scores <680 GDS/TDS maximums: 35%/42%
          -for credit bureau beacon scores>680 GDS/TDS maximums: 39%/44%
 
Debt Servicing Ratios for Conventional Mortgages:
 
  • Lender policies vary - for borrowers with beacon scores >680, most lenders will allow a maximum 42% -44% TDS and not use the GDS ratio.
New to Canada borrowers:
 
  • Up to 95% financing (permanent resident)
  • Up to 90% financing (non-permanent resident)
  • Definition of "new" to Canada varies...some say under 36 month- others will allow under 60 months
  • Maximum 1 property (owner- occupied)
  • Alternate forms of credit documentation accepted (foreign credit bureau, bank statements, letter of reference from recognized foreign bank...)
  • Work permits, status documentation
 
Business For Self (Stated Income)
 
  • Stated income: (also referred to as "non-income qualified")
         -the income "stated" must meet lender reasonability test
         -lender will request Notice of Assessments and possibility T1 General
         -lender may request copies of contracts or invoices
         -business license or GST return
         -income taxes must be paid and up-to-date (no balance ownin on NOA)
  • Insured: see attached chart
  • Conventional: up to 80% is still available with a small select number of lenders;   
          - majority of lenders have a maximum of 75% LTV with stated income & many are cutting back to 50-60%
 
 
Cash Back Mortgages:
 
  • Available thorugh several lenders
  • Cash Back funds can no longer be used towards down payment if the lender is federally regulated (ie:banks)
          -currently, provincially regulated lenders can still allow use of cash back funds to go towards downpayment...virtually a "zero-down" purchase (credit unions fall within this group of lenders)
 
 
Home Equity Line of Credit (HELoC):
 
  • Maximum Loan to Value: 65%
 
Investment Properties (residential - max. 5 units)
  • Minimum down payment 20% -some lenders require mortgage insurance if down payment is between 20-35%
  • Down payment from own resources (not gifted)
  • Maximum amortization 35 years (most lenders allow maximum of 25 yrs)
  • Rental income: anywhere from 50-80% is used in debt servicing ratios
  • Registration in Company Name: many lenders allow registration under a Holding Company
 
Alternate lending solutions (low credit bureau scores)

  • Interest rate: quoted with approval
  • Lender fees: quoted with loan proposal
  • Lenders willing to go up to 70% financing with borrowers beacon as low as 500 (or even lower!)
  • Bankruptcy scenarios: must be discharged (some require re-established credit; others are good with a 1 day discharge)
  • Income documentation: for self employed: stated income will be accepted.
 

 

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Contact me to find out more about Toronto Design-focused Real Estate Solutions for your needs.

 

Anne Lok, Real Estate Broker

Berkshire Hathaway HomeServices Toronto Realty Inc. Brokerage

287 Davenport Road Unit 1
Toronto ON M5R 1J9

direct: 416-799-9632

office: 416-504-6133 

 

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