The following may help you get a more realistic expectation on a rental mortgage program and how you can speed up the process and benefit sooner from the investment of that second home (not owner occupied) or third or even fourth home.
Purchasing a second home is not the same as buying your first home, yet, the investment on real estate may be worth the difference.
The rental mortgage program’s terms may vary among lenders, so it is advisable that you check with your mortgage agent the details of your mortgage.
One of the variants between your first mortgage on your owner-occupied property and your non-owner-occupied property might be the lower loan-to-value offered on the first mortgage of your non-owner-occupied property.
Another variant could be the higher net worth of the borrower needed on the rental mortgage program.
The percentage amount of the rental income that can be added to the borrower’s income might also a variant in the mortgage process.
Consulting your mortgage agent saves you time speeding up the mortgage approval process so that you can enjoy the benefits of your investment
Credit, income and down payment affect rates and affordability in any qualification process.
The non owner occupied rental mortgage loans help you qualify by adding the monthly rental income to your current income. As a result you are able to purchase or refinance a rented property and let the property pay for itself with the rent
Scenario: You currently have a steady job or business, a decent credit score, some savings but no time to start another business or job, and you would like to earn residual income from a real estate property.
The non-owner occupied rental mortgage is designed for those who would like to become real estate investors.
Mortgageis a registered agreement in a land titles office where security interest in a specific real property is held by a lender as a security for debt repayment by the borrower, a debt pledge
Each mortgage is a claim against the property; should the property be sold or foreclosed each claim is satisfied in order
What kind of mortgage can I help you with?
First mortgage: is the first loan registered in the title against the property
Second Mortgage: Is the loan that is registered second in time in the title against the property, is normally used to trade high credit card debts that carry high-interest rates for a low mortgage rate that eventually will reduce the cost of borrowing making it easier to eliminate that debt
A Mortgage can be conventional or high ratio Conventional mortgage: Usually when a borrower contributes a 20+% of the value of the property High ratio mortgage: Usually when a borrower contributes less than a 20% of the value of the property
A Mortgage can be open or closed:
Open: Allows the borrower to repay all or part of the principal at any time without penalties
Closed: Does not allow any prepayments or early repayments of the mortgage
There are different types of mortgage loans because they try to satisfy different needs according to the borrower’s lifestyles and affordability.
New to Canada Mortgage is for people who have immigrated or relocated to Canada within 60 months, offers credit record or history flexibility, lower down payment required than a conventional mortgage.
The New to Canada mortgage is for the new immigrants that have obtained landed status and have not already owned a house It presents the opportunity to start owning a home instead of renting.
The following are some borrower qualifications for the New to Canada Mortgage:
High ratio secured mortgage loans with only 5% Down payment from own resources; For LTV’s less than 95%, the remainder may be gifted from an immediate family member or from a corporate subsidy. (3 years landed immigrant)
Or Conventional unsecured mortgage loan with 35% Down payment or more from own resources.
Amortization up to 30 years in Conventional & 25 years insured mortgages
No 3rd party/Guarantors
Number of units, Max 2
Must provide valid work permit or verification of landed immigrant status
International Credit Report or 2 alternative sources of credit
Bank reference letter or 6 months bank statements
3 months minimum full-time employment in Canada (borrowers being transferred under a corporate relocation program are exempt)
All debts held outside of the country must be included in the total debt servicing ratio (Rental income earned outside of Canada is to be excluded from the GDS/TDS calculation)
Zero down payment mortgage is a Mortgage loan offered by only some lenders that offer a 5% cash back, that can be used towards the down payment.
It helps realize the dream of home ownership even before the down payment has been saved.
If you are currently renting and prefer to own your own home, but you haven’t been able to save enough for your down payment, this is your chance call now
To qualify for aZero down payment mortgage you to have good credit (read below), a steady source of income that can show your capacity to repay the loan, (we’ll do the math together) and savings of about a 1.5% of the value of the property that you are seeking to purchase