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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