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The good news is whether its your first home or your 20th you can qualify for 5% down up to $500,000.00, anything after that and you have to put 10% down.

For example:

Purchase: $600,000.00

Down payment: 5% of $500,000.00 – 10% of $100,000.00 = $35,000.00 minimum down payment.

This is when you sell your house and buy another but the house you are buying closes before the house you are selling. This is doable but higher rates for the time you borrow the extra funds and fees can apply. I don’t get paid from any extra fee they are charged by the lender and lenders have their own rates and fees for this product.

Every bridge finance loan is a case by case scenario.

Further Information

What are B Lenders?

Lenders willing to step out of bank guidelines but have somewhat higher rates and fees apply. Their rates are reasonable but higher than an A lender and there is generally a 2% fee (some brokers charge substantially more) which we get paid half to 1.5% of the fee. This is subject to change if mortgage is less than 100k.

These mortgages require 80% to 75% loan to value and are common when it comes to:

  • Business for self clients who write most their income off.
  • Low beacon score or troubled credit
  • Income types A lenders don’t understand or can’t do based on policy.
  • Other scenarios that don’t fit regular A lender criteria but make sense as far as clients being able to afford what they are doing.

This lender can be a good alternative but in every scenario and whenever I use them my goal is to find a strategy and game plan that allows my clients to get back to the A lender route and as long as they are prepared to listen I have a very high success rate.

What are debt ratios?

Debt ratios are a BIG part of what qualifies you for a mortgage. Many times I try to talk people into keeping these as reasonable as possible unless there is extra income we can’t use in which case I don’t mind being on the higher side.

There are two things that come into play when debt ratios are mentioned in a mortgage.

GDS (gross debt ratios) max 34% or with exceptional credit and explanation 39% – This ratio is based on your:

  • Mortgage payment
  • Property tax payment (per month)
  • Heating cost (usually calculated at approx. $100.00 per month)
  • Monthly Strata fees (if applicable)

TDS (total debt ratio) max 42% or with exceptional credit and explanation 44% – This ratio is based on your:

  • Mortgage payment
  • Property tax payment (per month)
  • Heating cost (usually calculated at approx. $100.00 per month)
  • Monthly Strata fees (if applicable)
  • Credit card payments (calculated at 3% of the balance with all lenders)
  • Line of credit payments (calculated at 3% of the balance with all lenders)
  • Loan payments

 

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