MORTAGES WHERE LOAN TO VALUE IS UNDER 75% (Down Payment/Equity of 25% or more)
FOR A PURCHASE OR REFINANCE	Where the down payment or borrower's equity is 25% or more of the purchase price (or appraised value) mortgage insurance is not usually required. On occasion, due to the size or location of the property, a lender may still require the mortgage to be insured. In that case, guidelines similar to those for mortgage financing where the loan to value is greater than 75% would be applicable.
WHEN PURCHASING A PROPERTY	The down payment must usually come from the borrowers' own resources. Where a portion of the down payment is borrowed separately, the payment on the borrowed funds would be calculated in with other payments for debt servicing purposes. Where funds are a gift from family, a gift letter is required signed by the Giver confirming that the money is a gift and not a loan.
REFINANCING A PROPERTY	This is available through many lending institutions for any number of purposes.
ABILITY TO SERVICE DEBT	Is first calculated by adding the mortgage payment, property taxes, heating costs and one-half of the condominium fees together to ensure they do not exceed 32% of household income. This is called the Gross Debt Service Ratio. For qualifying purposes only, the mortgage payment used is usually the contract rate or the Approved Lender's three year posted rate. The second debt calculation is the Total Debt Service Ratio and it includes all property related expenses plus all other debt payments (loans, credit cards, lines of credit, etc.). These payments are added together to ensure they do not exceed 40% of household income. Household income is usually taxable income, although income from sources like Employment Insurance is not generally considered as income for debt servicing purposes. The lower the overall loan to value, the more flexible the lender will be in accepting debt service ratios that are higher than the guidelines allow for.
UP TO 100% OF MARKET RENTAL	Income from authorized, and in many cases unauthorized, rental accommodation (i.e. basement suite or duplex) can be offset against the property related payments, prior to calculating Debt Service Ratios.
EQUITY MORTGAGES	Several institutions will waive income requirements. Loan to value ranges from 65%, 75%, and up to 90% depending upon the institution. Ideal for self employed individuals.
This is the end of the Residential Mortgage article series. However, there are many more resources in the Full Article Listing that may be helpful, such as: Costs to Consider and GST Rebate Guidelines. Information subject to change without notice.