MORTGAGE PROGRAMS
Purchases
Min. down payment 5%
Personal residential real estate.
Purchase Plus Improvements
A program where you can add money to the mortgage for renovations at the time of purchaser.
Set Up
You would need to provide completed estimates before the application can be submitted to the lender. These estimates are added to the agreed purchase price and are submitted as one also referred to as the improved value. Borrowers can pay as little as 5% down payment on the improved value.
Purchase Price: $285,000
Estimates: + $15,000
Improved Value: $300,000
NOTE: Please make sure extra time is added to the financing condition date so there is time to attain estimates.
Amount Can Add
Lenders may have slightly different guidelines but the 2 insurer programs are:
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Max 10% of the “improved” value. Or;
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20% of the “improved” value up to $40,000
NOTE: The improved value still needs to appraise out/be an insurer approved value.
To Know | Costs
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Lenders only reimburse money for work completed, meaning you will need to pay for the work upfront. The lender verifies work completed via the receipts and an appraiser will also do a property inspection.
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You start paying for the total mortgage amount on the date of possession. The “improvement” money is given to the lawyer who holds it in trust until the work being completed is confirmed.
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You may incur an appraisal cost at the beginning (unless insurer can approve value as is) and then also the cost for an appraiser to go back and confirm the work is completed. Approx $350 if need both appraisal and inspection.
HELOC - Home Equity Line of Credit
A line of credit can go up to 65% of the value of the property.
Interest only payments required.
Re-advanceable.
New to Canada
Min. down payment 5%
For newcomers who may not have credit built.
No Down Payment
Program where an existing credit facility is used for the down payment. Must have excellent credit
and qualify with the down payment loan included.
Rental Properties
Min down payment 20%
Refinance
Min. equity that needs to stay in property is 20%
Drawing equity out of a home you already own.
Reverse Mortgage
An option in retirement to access up to 55% of your equity.
Self-Employed
While it makes sense as a business owner to deduct as many expenses as you can, it can also make it more difficult to qualify traditionally with lenders. There are a couple ways we can potentially increase your income for an application:
Under 20% down payment - potential gross up options.
20% down payment or more - can still access stated income programs.
Separation | Spousal Buyout
An option to clients who are separating (married, common-law or even siblings can use this program), where one wants to keep the home but needs to buyout the other from equity in the property. This program allows the net mortgage back up to 95% of the value. So the remaining owner in essence can start back at 5% down.
What Documents Will I Need?
- An offer to purchase signed by both parties showing one selling it to the other
- A separation agreement that includes which party is to take over the property
- The lender will require a full appraisal (cost approx. $300)
- Standard loan documents (ex: employer letter, paystub, etc...)
What Can The Money Be Used For?
- payout of the existing mortgage
- paying the other owner out of the property
- joint debts (debts must be referenced in the separation agreement)
Note: the money cannot be used for any reason other than the above. No reno's, no cash draws, legal fees, etc...
Other Items To Be Aware Of
Both parties name must have be on title before separation and both must stay on title until this transaction changes it.
What Do I Do Now?
Get pre-qualified to take over the property before instructing your lawyer to add it to the separation agreement.
Transfer
Switching to a new lender.