Tel. 416 873 6660
Fax 905 785 3675
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Brokerage # 10500
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CMHC-Canada Mortgage and Housing Corporation
With a strong emphasis placed on reasonability of income type, amount, and durability, Self-Employed borrowers and Commissioned Sales people that cannot provide traditional income verification may now qualify for a high ratio mortgage for purchase or refinance purposes.
Acceptable loan purpose:
Purchase, Purchase Plus Improvements
Progress Advance
Refinance for repayment of existing mortgage debt, home renovations, debt consolidation, or asset enhancement
Equity takeout limited to $200,000
Where the loan purpose is to consolidate existing first and second mortgages, the maximum LTV will apply
Loan-to-value ratio limits:
Purchase 1-2 Units: 95% LTV
Purchase 3-4 Units: 90% LTV
Progress Advance (Max. 2 Units): 95% LTV
Refinance 1-4 Units: 90% LTV
Maximum Loan Amounts:
Do not apply with the exception of the following loan purposes:
Secondary Homes (Type A):
Metro Toronto, Metro Calgary & Metro Vancouver: $700,000
Rest of Canada: $600,000
HELOC (maximum credit limit):
Metro Toronto, Metro Calgary & Metro Vancouver: $700,000
Rest of Canada: $600,000
Eligible properties:
Owner-occupied properties: maximum 4 units where at least 1 unit must be occupied as the principal residence
Secondary home: maximum 2 units. Property may not be used for rental purposes. Only Type A properties are eligible (for more details, please refer to the Secondary Home overview )
Existing and new construction
Readily marketable residential dwellings, located in markets with demonstrated ongoing re-sale demand
Older homes (pre 1950) must have been substantially modernized and the estimated remaining property (economic) life must be at least 25 years
New construction must be covered by a Genworth approved New Home Warranty Program
Occupancy:
Owner occupied primary residence or secondary home. All applicants used to qualify must occupy the property.
Spousal guarantors acceptable provided they occupy the subject property
Non-occupant co-borrowers or guarantors not permitted
Amortization options:Up to 40 years
Terms/qualifying interest rates:Fixed, standard variable, capped variable, or adjustable rate mortgages are permitted
Borrower qualification:
Income declared by the borrower must be reasonable for the industry and occupation/type of business
Strong credit and credit score (for recommended bureau score requirements see the premium matrix below)
For HELOC applications, a minimum 650 bureau score is recommended up to 90% LTV; 700+ bureau score is recommended for 90.01-95% LTV
Genworth will average the scores pulled from both credit bureaus for each borrower, and the minimum score requirement will apply to all borrowers on the application
No mortgage, installment or revolving credit delinquencies appearing on the credit bureau in the past 12 months
No reported defaults on residential mortgages for the past 7 years
No previous bankruptcy
No gifted / borrowed down payment allowed
Lender to ensure borrower(s) have no tax arrears (recent NOA or a signed affidavit by the borrower(s) will suffice)
Maximum two (2) Genworth-insured Alt. A mortgages
GDS/TDS Guidelines
Self employed borrowers:
2-years self-employed tenure is recommended, however will consider borrowers with less than 2-years BFS tenure depending on the length and type of previous employment.
One (1) form of written third party documentation confirming self-employment tenure must be on file
Lender is required to capture the borrower's "Stated" income and submit to Genworth as part of the application.
The "Stated" income should be reasonable based on the type and size of the business, and should be able to service the required mortgage as per the GDS/TDS Guidelines above
Reasonableness of the income is a critical factor in the approval of the loan as is the borrower�s ability to service the loan and all other obligations
Commissioned sales:
A commissioned sales applicant is defined as someone who derives 100% of their income from a commissioned source
The lender is responsible for ensuring that the borrower is a commissioned sales applicant as defined above, with a minimum of two years tenure, for example by way of letter of employment, T1 Generals or T4's
Lender to ensure borrower(s) have no tax arrears (recent NOA will suffice)
Commissioned sale applicants who are paid a salary plus commission are NOT eligible under this program and must qualify in the usual manner (e.g. GDSR/TDSR and income confirmation will be required)
Lender is required to capture the borrower's "Stated" income and submit to Genworth as part of the application.
The "Stated" income should be reasonable based on the type and size of the business, and should be able to service the required mortgage as per the GDS/TDS Guidelines above
Reasonableness of the income is a critical factor in the approval of the loan as is the borrower�s ability to service the loan and all other obligations
Premium rates:
Premiums must be paid in full at closing, and may be capitalized into the mortgage balance.
Where the first and second mortgages are insured concurrently, the total premium will be equal to the amount that would be required if insured as a single first mortgage
Premium matrix:
Portability:
Mortgage default insurance is portable under the following conditions;
1) When porting from an ALT. A to another ALT. A mortgage, the premium will be the lesser of:
The increase in the loan amount multiplied by the top-up premium rates defined in the table above, or
The new loan amount multiplied by the full premium rate
2) When porting from an ALT. A loan to an existing standard Genworth insured loan, the premium will be the lesser of:
The increase in the loan amount multiplied by our standard premium top-up rates as described in our Portability feature Product Overview, or
The new loan amount multiplied by the full standard premium rate
3) When porting from an existing standard Genworth insured loan to an ALT. A loan, the premium will be the lesser of:
The outstanding mortgage balance multiplied by 1.5% + the top-up amount multiplied by the top-up premium rate, or
The new loan amount multiplied by the full premium rate
Example for Scenario #3:
Outstanding mortgage balance = $100,000; Top-up mortgage amount = $80,000; New Loan Amount = $180,000 (90% LTV)
1. ($100,000 x 1.5%) + ($80,000 x 7.0%) = $7,100
2. ($180,000 x 4.75%) = $8,550
Premium Payable is $7,100
When porting with a top-up mortgage amount, the blended amortization option is available
Assumptions/assignments:Mortgages issued under this program may be assumed. We will continue to provide insurance coverage if the mortgage is sold to an investor, provided servicing continues with a Genworth approved lender in compliance with Master Policy terms.
Ineligible loan purpose/type:
- New to Canada
- Family Plan
- Cashback Equity
- Vacation Homes
- Homebuyer 100
- Investment Property Program
Documentation/information requirements:Sole Proprietorship
A one-owner operation where the owner directs all the activities of the business, assumes all authorities and obligations, and is liable for its business debts. The sole proprietor income is reported to revenue Canada on the standard tax return (T1 General) together with Revenue Canada's required statement of business or professional activities.
Documentation requirements - Any one of the following:
Business License
Business Credit Report
GST/HST Return Summary
T1 Generals with statement of business activities attached for a minimum 2 years
Audited Financial Statements for the last 2 years, prepared and signed by a CA
Plus a recent Notice of Assessment or a signed affidavit by the borrower(s) to confirm no income tax arrears
Partnerships
Partnerships are businesses owned by two or more individuals who share the profits or losses of the business operation. The partnership income is reported to Revenue Canada on the standard tax report (T1 General) together with Revenue Canada's required statement of business or professional activities, which reflects the percentage of the NET income or loss for each partner of the enterprise.
Documentation requirements - Any one of the following:
Business License
Business Credit Report
GST/HST Return Summary
T1 Generals with statement of business activities attached for a minimum 2 years
Audited Financial Statements for the last 2 years, prepared and signed by a CA
Plus a recent Notice of Assessment or a signed affidavit by the borrower(s) to confirm no income tax arrears
Corporations
A limited company or corporation is a legal entity, separate from the persons (all shareholders) who own it. The business can own assets, enter into contracts and conduct business transactions in its own capacity. The company is called limited because the liability of the shareholders is limited to their investment. All provincial Corporations must obtain articles of incorporation from the province in which they are registered or may be federally incorporated. The applicant's personal income will be reported by T4 from the corporation.
Documentation requirements - Any one of the following:
Articles of incorporation
Business Credit Report
Audited Financial Statements for the last 2 years, prepared and signed by a CA
Plus a recent Notice of Assessment or a signed affidavit by the borrower(s) to confirm no income tax arrears
Genworth will now be providing mortgage insurance on an innovative new program accessible to qualified homebuyers with no down payment.
Acceptable loan purposePurchase transactions
Loan-to-value ratio limits
Maximum 100.00% LTV
Insurance premium can be capitalized into the mortgage.
Eligible properties
Owner occupied, primary residences
Maximum two units
New construction or existing properties
Secondary homes - Type A (please refer to the Secondary Home Product Overview for eligible properties)
Terms/qualifying interest rates
For terms less than 3 years, the qualifying interest rate is the greater of three-year posted rate or contract rate
For terms of three years or more, the contract rate is used
Amortization optionsUp to 40 year amortization available
Coverage100%
Premium rates*
Borrower qualification
Strong credit and credit score (Recommended for credit scores of 680 or greater)
Two trade lines with at least two years credit history is recommended
No prior bankruptcies
Non-residing guarantors are not permitted. Non-residing co-borrowers are acceptable (must be an immediate family member and on title)
Closing costs should be from own savings
Documentation requirements
Standard documentation requirements apply
Genworth may request that the lender provide a copy of the required documentation on a case-by-case basis
Portability
Mortgage default insurance is portable under this program
The premium will be calculated using the lesser of the Premium on the Total Loan Amount less applicable Premium Credit or the Premium on the Top-Up Portion
Top-Up Premium is only applicable if the original mortgage was insured at 95.01-100% LTV. Premium Credit may still apply.
For complete details, please refer to Genworth's Portability Feature Product Overview
Assumptions/Assignments
Mortgages issued under this product may be assumed
Insurance coverage will continue in the event of a sale of the mortgage to an investor provided servicing continues with a Genworth approved lender in compliance with Master Policy terms
Eligible Products **
First Mortgage Owner Occupied 1 & 2 units
Extended amortizations up to 40 years
Insured Progress Advance
Purchase Plus
Secondary Homes (Type A)
** For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview
Ineligible Products
Alt A
Cashback Equity
Cash - Out refinance
CreditAssist
Family Plan
HELOC
New to Canada
Second mortgages
Vacation Homes (Type B)
Investment Property Program
Now qualified homebuyers who have immigrated or relocated to Canada can qualify for Genworth default mortgage insurance with as little as a 3% down payment.
Acceptable loan purposePurchase transactions
Loan-to-value ratio limitsMaximum LTV ratio - 97.00%
Eligible properties
Maximum two units where at least one unit must be occupied as the principal residence
New construction or existing properties
Terms/qualifying interest rates
For terms less than 3 years, the qualifying interest rate is the greater of three-year posted rate or contract rate; for terms of three years or more, the contract rate is used
Premium Rates
CMHCOverview
For most people, the hardest part of buying a home - especially a first home - is saving the necessary Down Payment.
If you have less than 25% of the purchase price to put down, you will be required to purchase Mortgage Insurance through your lender. Mortgage insurance protects your lender against payment Default.
By providing Mortgage Loan Insurance to lenders, CMHC enables you to finance up to 95% of the purchase price of a home. This means you can buy a property with as little as 5% down. So if the cost is $125,000, you would need a down payment of just $6,250! CMHC Mortgage Loan Insurance has made home ownership possible for millions of Canadians.
How do you qualify?
Once the following conditions are satisfied, you are eligible for CMHC Mortgage Loan Insurance:
The home which is to be occupied as your Principal residence is located in Canada.
You have a down payment of at least 5% of the purchase price of the property. See Just 5% Down .
Your home-related expenses do not exceed 32% of your gross household income.
Your total monthly debt load does not exceed 40% of your gross monthly household income.
You are able to pay Closing costs equivalent to at least 1.5% of the purchase price. See Just 5% down?
Yes, you can buy a home with a down payment of less than 10%:
Single-family dwelling: 5%
Two-unit dwelling: 7.5%
Minimum Equity of 5% from your own resources is required. Gifted down payments from an immediate relative are acceptable.
INSERT
Mortgage Brokers have access to various types of mortgage products and services. Some of these offer options where CMHC insurance is not necessary. For more information, contact The Mortgage Store Tel. 905-282-9009
For most people, the hardest part of buying a home - especially a first home - is saving the necessary Down Payment.
If you have less than 25% of the purchase price to put down, you will be required to purchase Mortgage Insurance through your lender. Mortgage insurance protects your lender against payment Default.
By providing Mortgage Loan Insurance to lenders, CMHC enables you to finance up to 95% of the purchase price of a home. This means you can buy a property with as little as 5% down. So if the cost is $125,000, you would need a down payment of just $6,250! CMHC Mortgage Loan Insurance has made home ownership possible for millions of Canadians.
How do you qualify?
Once the following conditions are satisfied, you are eligible for CMHC Mortgage Loan Insurance:
The home which is to be occupied as your Principal residence is located in Canada.
You have a down payment of at least 5% of the purchase price of the property. See Just 5% Down .
Your home-related expenses do not exceed 32% of your gross household income.
Your total monthly debt load does not exceed 40% of your gross monthly household income.
You are able to pay Closing costs equivalent to at least 1.5% of the purchase price. See Just 5% down?
Yes, you can buy a home with a down payment of less than 10%:
Single-family dwelling: 5%
Two-unit dwelling: 7.5%
Minimum Equity of 5% from your own resources is required. Gifted down payments from an immediate relative are acceptable.
Mortgage Brokers have access to various types of mortgage products and services. Some of these offer options where CMHC insurance is not necessary. For more information, contact True
The Mortgage Store Tel. 905-282-9009
How Much Does CMHC Mortgage Loan Insurance Cost?To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
Remember: without mortgage insurance you may avoid the insurance premium but you�ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.
A 10% premium refund and extended amortization periods of up to 40 years without surcharge may be available when CMHC Mortgage Loan Insurance is used to finance an Energy-Efficient Homes.
See your mortgage professional for terms and conditions. Call True The Mortgage Store for more details on CMHC Insurance, or, how to avoid paying the premiums Tel.905-282-9009
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