| Effective March 1, 2004 |
|
| Unique Product Requirements |
|
Permitted
Sources of
Equity |
- Lender cash back incentives;
- Equity borrowed from any source that is arm's length or
not tied to the property purchase or sale transaction.This
includes personal loans, lines of credit or credit cards;
- Gifts or grants from any party that is arm's length to
the property purchase transaction; and
- 100% sweat equity from either the borrower or contributed
by another party that is arm's length to the property purchase
transaction.
(Note 1: Payments on borrowed funds are included in the
TDS calculation.)
(Note 2: Downpayments may not be paid out of or included
in the insured
mortgage. This includes recovery of any lender cash back
incentives.)
|
Prohibited
Sources of
Equity |
Sources that are not arm's length or are tied
to the purchase or sale of the property, either directly or
indirectly, are not permitted.These prohibited sources include:
- Builder incentives or loans;
- Realtor or mortgage broker incentives or loans to the
borrower that impact the property selling price;
- Loans or gifts from the property vendor;
- Rent to own payments that are not in excess of the current
market rent; and
- Third parties that receive payment from the vendor or
builder.
|
| Premiums |
- 3.40%, plus the Progress Advance surcharge as applicable.
|
Eligible
Borrowers |
- Minimum 680 Beacon Score (or equivalent) is required.
Scores will be averaged where there is both a borrower and
co-borrower.
|
| Properties |
- Properties secured by a chattel mortgage or personal property
security
registration, as well as properties On-Reserve without a
Ministerial Loan
Guarantee, are not permitted.
|
| Security |
- Security First priority position. Recovery of any lender
cash back incentive must be done through the interest rate
and not through a cash back repayment provision.
Penalties cannot be capitalized.
|
Specific Data
Requirement |
- Flex Downpayment Product Indicator.
|
Product Requirements Consistent with Traditional 95% Product
|
Elibible
Transactions |
- Purchase transactions, including purchase plus improvements
and progress advance.
|
| LTV Ratio |
|
Eligible
Properties |
- 1 unit Homeowner properties (up to 95.0% LTV) or
2 unit Homeowner properties (up to 92.5% LTV).
- Properties On-Reserve secured by a Ministerial Loan Guarantee
are permitted.
|
| Forms of Interest |
- Fixed or capped variable interest rates can be charged.
|
Qualifying
Interest Rate |
- Where the loan term is less than three years, borrowers
are qualified using the greater of the lender's three year
posted interest rate, or the contract interest rate (or
VRM cap).Where the loan term is three years or more, the
contract interest rate is used (or VRM cap).
|
| Minimum Term |
|
| Closing Costs |
- The borrower is required to demonstrate the ability to
cover closing costs of at least 1.5% of the purchase price.
These funds can be borrowed as long as any associated payment
is included in the TDS calculation based on a 12 month repayment
period.
|
| Portability |
- CMHC Mortgage Loan Insurance can be ported to a new property.
If additional funds are required at the time the mortgage
is ported, standard portability policy requirements and
premiums apply.
|
| Processing and Fees |
- emili processing only
$165 mainframe emili, WEBemili.
$185 FAXemili.
|
