Kingsley Qin, Broker
Take The World To Sale Your House
Sotheby's International Realty Canada
125 Lakeshore Road East
Oakville, ON L6J 1H3
Canada
ph: 416-716 9387 Cell
fax: 905-845 0024
alt: 1-888-413 0184 Office
askkings
Properties Valued over $1m -
Points to consider:
a) Loan-to-value
Most Lenders have a policy called a “Sliding Scale” to limit the loan-to-value on properties in excess of $1m. Lenders begin their sliding scale at different values according to their individual policies while also having various loan-to-values based on a tiered amount.
Example:
Property value of $1,500,000
Lender begins Sliding Scale at $1m
Tier: 80% of the first $1m; 50% of the amount exceeding $1m
$1,000,000 x 80% = $800,000
$ 500,000 x 50% = $250,000
Based on a purchase price of $1.5m, the maximum mortgage financing is $1,050,000 which is LTV = 70%.
b) Specialized Mortgage Program – Non-resident, Stated income ( BFS ), etc
When applicants are approved under a specialized program such as Stated Income or Non-resident, a maximum mortgage amount normally appliesas does a Sliding Scale at a reduced loan-to-value.
Example:
Property value of $1,500,000
Lender begins Sliding Scale at $1m
Tier: 65% of the first $1m; 50% of the amount exceeding $1m
$1,000,000 x 65% = $650,000
$ 500,000 x 50% = $250,000
Based on a purchase price of $1.5m, the maximum mortgage financing is $900,000 which is LTV = 60%. This is due to the use of a Specialized Mortgage Program. Some Lenders cap the mortgage amount under this program at $750,000 as a maximum mortgage while others offer higher amounts.
c) Mortgage Insurer Guidelines
Under the new Federal mortgage guidelines, an applicant purchasing a property in excess of $1m is not eligible to apply for mortgage insurance. In other words, this applicant must have at least 20% down payment. An increase in the down payment may be required, depending on the specific file itself.
New Comer To Canada
- Program for individuals who have arrived in Canada within the last 5 years and have landed immigrant status
- Individuals with a “9” SIN along with a valid work permit are eligible for 5% down payment
- Maximum purchase price is $1m
- Minimum 3 months of full time employment in Canada is required
- Must have completed probationary period
- If you are coming to Canada under a Corporate Relocation Program, your employment can be accepted without the 3 month employment requirement
- 5% - 20% down payment required depending on how long you have been in Canada and availability of credit references
Non- Resident Program
- Program for individuals who are non-residents of Canada
- Minimum 35% down payment required
- Must be held in a Canadian bank account a minimum of 45 days before closing
- Maximum loan amount will depend on the Lender that approves the file
Completing The Transaction
- At least 15 days before your closing date, you will need to come to Canada to sign all the required documentation
- Completing your transaction via Power of Attorney is not accepted
Sotheby's International Realty® is a registered trademark licensed to Sotheby's International Realty Affiliates, Inc. Each Office Is Independently Owned And Operated.
Sotheby's International Realty Canada, Brokerage.
Copyright 2013 kingsleyqin. All rights reserved.
Sotheby's International Realty Canada
125 Lakeshore Road East
Oakville, ON L6J 1H3
Canada
ph: 416-716 9387 Cell
fax: 905-845 0024
alt: 1-888-413 0184 Office
askkings