Frank Greschner, Mortgage Consultant - Loan to Value between 75-90%

MORTGAGES WHERE LOAN TO VALUE IS BETWEEN 75-90% (10 - 25% Down Payment/Equity)
FOR A PURCHASE OR REFINANCE	Where the down payment or borrower's equity is 10% TO 25% of the purchase price (or appraised value) either Canada Mortgage and Housing Corporation (CMHC) or Genworth generally insures the mortgage. A minimum term of six months must generally be taken.
WHEN PURCHASING A PROPERTY	The down payment must usually come from the borrowers' own resources. These funds should be in the borrower's account two weeks prior to closing. Where the down payment is a gift, a gift letter is required, signed by the Giver confirming that the money is a gift and not a loan. The borrower must also demonstrate the ability to cover closing costs of at least 1.5% of the purchase price.
REFINANCING A PROPERTY	Refinancing is now available up to 90% for debt consolidation and renovations.
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 based on 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.
MARKET RENTAL	50% of income from rental accommodation (i.e. basement suite or duplex) can be added to income before calculating Debt Service Ratios under C.M.H.C. guidelines. Genworth Insurance will allow for a 30% rental offset.
MORTGAGE INSURANCE PREMIUMS	Are determined by the loan to value. They are calculated as a percent of the mortgage amount and generally added to the mortgage. Premiums* are set as follows: Up to and including 75%: .65% Up to and including 80%: 1.00% Up to and including 85%: 1.75% Up to and including 90%: 2.00% Up to and including 95%: 2.75% No money down: 2.9% *These premiums assume a single advance of funds. Premiums are higher on construction mortgages.
Go directly to the next article: Loan to Value Under 75% or the Full Article Listing. Information subject to change without notice.

For mortgage information or pre-approval, please contact Frank at (604) 649-8244
or by email at frank@frankgreschner.com

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