Problem Credit?

Sometimes your credit rating may not qualify you for a mortgage at a major lending institution. Maria welcomes the opportunity to help you get on track to a better credit score. In the meantime, if you need to access equity to consolidate debt and improve cash flow, call Maria, all credit situations will be considered.

You’ve got Maria on your side

Cash Back Options

There are numerous products offering cashback incentives of 1% to 5% of your mortgage. Generally, the longer the term, the more is available. This can come in handy to help with your down payment, renovations, or furniture. The rates on these mortgages are not fully discounted and early payout will mean the lender will clawback some of the cash on a pro-rated basis. Ask Maria for details.

No Down Payment Mortgage (100% Financing)

There are various mortgages on the market that require no down payment.

1. The lender comes up with the 5% down (cashback) and the mortgage is insured by GE or CMHC or the 5% can be from a qualified gift or borrowed funds:

Qualification for some lenders is dependent on your credit rating.
Minimum term of 5 years may apply.
Posted rates may apply (some discount on terms over 5 years).
You must have 1.5% of the purchase price available for closing costs.
Property must be your principal residence.
High ratio premium is 2.90% which may be added to the mortgage.
If mortgage is paid off early or assumed, a pro-rated portion of the original cashback will be clawed back.
Income confirmation required. GDS/TDS 32/40.

2. You can borrow your downpayment with repayment terms included in debt servicing. Some conditions apply.

Interest Only Mortgages

Borrow up to 90% LTV on a 25 year amortization on your owner occupied residence.
An insured product which allows interest only repayment for up to the first 10 years of your mortgage.

Ask Maria for details

Specials

From time to time different lenders offer limited time sales and special products/features. Here are some examples:

Special discounted rate for a specific term or variable product.
30, 35, (and some 40 year amortization available)
Terms longer than 10 years
Cash incentives to help with legal and closing fees
Non resident financing beyond 75% loan to value.
Open mortgages
High ratio financing for second homes
Second mortgages insured by GE/CMHC

Co-op Housing

Most financial institutions do not lend on Co-ops and those that do generally require a larger down payment even if you are a first time homebuyer.

Interest rates are negotiated on an individual basis

Property must be owner occupied.
Lender will require written consent from the co-op board prior to issuing a commitment letter.
Lender will also require an assignment of lease and hypothecation of shares.
Co-op must own the real estate clear title.

Mobile Homes

Anyone intending to purchase a manufactured (mobile / modular) home as their principal residence may be eligible for the Mobile Homes CMHC Program. It is an ongoing program and will be subject to review.
Eligible Homes

New, resale or existing units situated on owned or leased land. Market value estimates may include site servicing costs that typically make up part of the purchase price. Includes single and multiple widths certified under CSA-Z240 and CSA-A277 standards, and modular units certified under CSA-A277 standards. Existing units must meet CMHC standards and need not be certified under CSA-A277 or CSA-Z240 standards.

Loan Amounts

Maximum 95% of lending value (lesser of purchase price or appraised market value). Funds advancing procedures have been modified to be consistent with regular principal residence guidelines. Single and progressive advances are available on new construction.

Other Features

Ammortization to 25 years or “remaining life”, whichever is shorter. GDS to 32% including principal, interest, taxes, heat & pad rental TDS to 40%

New Immigrants

New immigrants with permanent resident status can qualify for high ratio mortgages. As a rule of thumb, CMHC requires one year of job stability for the 5% down payment program. Naturally, the longer the better, especially if there are weaknesses in the proposal such as a low credit score and/or gifted down payment.

The one year minimum requirement is not a hard and fast rule, however, and may be reduced at the discretion of the lender/CMHC. There are other factors that are considered. The job type is important. For example, a job as a university professor will carry more weight as compared with a person working at a fast food restaurant.

Secondly, because lenders/brokers have the ability to pull a US credit bureau, immigrants from the US may be able to qualify for a 5% down payment mortgage sooner.

If the borrower is able to increase their down payment, their chances of obtaining a high ratio mortgage increase significantly. A borrower who has been on the job for only a month, but has 15% to put down may very well qualify for a high ratio mortgage. In this case, because the borrower may not have a long credit history in Canada, the lender may require a credit reference from their bank in the country of origin to determine the customer’s paying habits.

Each individual case will be different and each lender will have different guidelines for dealing with new immigrants. Maria will be happy to provide a free consultation to a new immigrant looking to purchase their first home in Canada.

Still looking for a job?

If you do not have a job, banks have new immigrant programs. These programs generally require 35% down payment and a letter of reference from your banker overseas.

Non-Residents

There are many lenders that provide mortgages to non-residents. These lenders will generally finance a maximum of 65% to 75% of the purchase price or appraised value, whichever is lower.

Some of the documents that lenders may require are as follows:

Appraisal by a qualified, bank approved appraiser
Proof of down payment
Credit bureau from your country of origin
Reference letter from bank in country of origin

To facilitate making payments on the mortgage, it is a good idea to open a Canadian dollar bank account in Canada.

If the property is a rental property, non-resident purchasers must be cognizant of the tax implications. Non-residents are required to pay Canada Customs and Revenue Agency (CCRA) 25% of the gross income from the property. This amount can be reduced by filing a Form NR6 return which sets out the projected income and expenses on the property. In addition, non-residents will also need to file an annual tax return for income on the property. CCRA will allow you to charge expenses incurred during the past 2 years to offset your income.

It’s recommended that you consult a chartered accountant with knowledge of cross-border taxation. Maria can refer you to a qualified individual.

Self-employed

Various programs are available for self-employed and commissioned salespeople who cannot provide the traditional proof of income. Conventional and high ratio mortgages to 95% Loan to Value are available (subject to change). Some lenders require you provide proof you have been self employed for 2-3 years and confirm no personal income tax is owed. Others are more lenient with GDS and TDS requirements. Call Maria for details.

Problems Qualifying?

Commercial

Each deal is unique and requires individual assessment. Things to consider:

Broker/Lender Fees will apply
Exclusivity Agreement may be required
Apartments, Storefront, Retail, Industrial, Office Buildings, Mobile Home Parks, Hotels, Rooming Houses
Conventional, High Ratio, and Non Conforming Lending
Purchases and Refinances
Construction Mortgages
First and Second Mortgages
Institutional and Private funds available

Documentation which may be required:

Appraisal (ordered by Broker or Lender)
Environmental Assessment
Survey
Financial Statements
Rent Roll

Call Maria for more information.

Maria Dominelli - Mortgage Broker