|
|
|
Mortgage Options:
Listed below are some of the different mortgage options available to my client’s. Whether you are a first time home buyer, building your own home or using equity in your existing home for renovations or debt payout there are options tailored to suit your specific needs.
Various mortgage options to choose from include the following:
- New Mortgage
- Pre-approval
- Mortgage Transfers from one lender to another
- Mortgage Renewals/Refinances (Renovations, Investments)
- Second Mortgage (Debt consolidation/payout)
- Construction/Builder’s/Draw Mortgage
- Commercial Mortgage
- Blanket Mortgage (single document registered covering more than one property, also known as Inter-Alia mortgage)
Mortgage Products:
Everyone’s situation will be different. Listed below are several mortgage products that will help match your specific need to qualify you for mortgage approval.
Let me help find the right mortgage product specifically tailored to you.
Conventional Lending
High Ratio Lending
No Down Payment
Flexible Down Payment
Self-Employed/No Proof of Income
Second Homes
Vacation Homes
Purchase Plus Improvements
New Immigrant
Non-Resident/U.S Citizens
Poor Credit/Bankruptcy/No or Limited Re-established Credit
Second Mortgage
Secured Line of Credit
Conventional Lending
- Traditional mortgage financing
- Financing up to 75% of the purchase price
- Lowest interest rates available
- No default insurance premiums required
High Ratio Lending
- Financing up to 95% of the purchase price
- Allows purchaser the opportunity to buy with only 5% down payment
- CMHC and Genworth Financial default insurance premiums
- Application approval required by the default insurer prior to the lender’s commitment
No Down Payment- No available funds for down payment
- Established strong credit history
- 100% financing available
- Lender will advance 5% to solicitor on closing date on behalf of client
- Similar to a cash back option
- Rate discounts do not apply
- Genworth default insurance premium 2.9%
Flexible Down Payment- No saved funds for a down payment
- Established strong credit history
- Able to use up to 10% of funds from borrowed sources
- Funds from personal line of credits, bank/personal loans and credit cards can be used
Self-Employed/No Proof of Income
- Business owners
- Work as a consultant, on contract, receive tips or 100% commission based income
- Having issues proving total income using the traditional banks methods (ex. T4’s, notice of assessments) as they commonly will only use net/declared income
- Financing available up to 75% using a “self declared income” method, meaning no proof of income used to qualify
- Financing available up to 90% with Genworth Financial for client’s with at least 3 years self employment
- Additional default insurance premiums apply
- Application is based on other criteria’s such as strong credit, assets, strength of property and loan to value
Second Homes- Available through CMHC up to 95% financing
- Same default insurance fees apply as buying a first home
- Must be purchased and intended for occupancy at some point during the year for any period of time or purchased for a relative on a rent free basis
- Must be located anywhere in Canada and suitable for year round occupancy
Vacation Homes- Available up to 95% financing as an insured mortgage
- Certain criteria such as year round access may be required
- Appraisal likely required
Purchase Plus Improvements
- Available to complete immediate renovations or improvements which eliminates costly secondary financing after the purchase is completed
- Covers purchase price of home as well as amount to pay for improvements purchaser wishes to complete to property
- Must pay upfront for the renovation/improvements with own resources (line of credit/loan) as CMHC will holdback the plus improvement portion until inspection is completed and approved
- Minimum 5% down payment required of the total cost of purchase price plus improvements
- Cost estimates and appraisal fee likely required
New Immigrant
- Must have landed status (work permit does not qualify)
- Very limited work experience or No income, up to 70% financing is available
- With qualifying income, up to 75% financing is available
Non-Resident/U.S Citizen’s
- New to the country
- Limited work experience in Canada
- No established credit
- Some funds already saved for down payment
- Various lenders now offering different products/rates/terms targeted at non-resident’s and potential U.S. investors looking to buy property in Canada
Poor Credit/Bankruptcy/No or Limited Re-established Credit
- Lenders are offering those who have credit issues great opportunities; however major banks will simply decline without any options
- Previous bankruptcy, orderly debt payment, credit counseling? Mortgages are available without even having re-established credit
- Different rates, terms and conditions are available
Second Mortgage- Cannot qualify with traditional lenders due to weak credit history
- Unstable employment
- Can be used for debt payout, renovations, investments, purchases
- Traditionally higher rates as the criteria shifts from credit worthiness to the actual strength of the property
Secured Line of Credit
- A revolving loan that can provide funds for many uses instead of using higher interest rate loans or credit cards
- Flexible repayment options such as interest only available
- Those with good credit are offered rates at bank prime (variable)
- Use the equity in the property as security
- Legal fees and an appraisal likely required
------------------------------------------------------ How much can I afford?
Purchase Price
| Down
Payment
| Approximate Income Required
(House)
| Approximate Income Required
(Condo Strata)
| $300,000
| 25%
| $54,000
| $59,000
| $300,000
| 10%
| $64,000
| $69,000
| $400,000
| 25%
| $72,000
| $77,000
| $400,000
| 10%
| $86,000
| $91,000
| $500,000
| 25%
| $90,000
| $95,000
| $500,000
| 10%
| $110,000
| $115,000
|
Notes:
1. please call as results can vary based on your financial situation.
2. debts (loans, credit cards) will impact results.
3. calculations based on mortgage rate of prime-90bps, 25 year amortization, 0.5% property tax, $225 monthly condo strata fees.
4. examples should be used as guidelines only.
|
|
|
