Canada Home Purchase Mortgage Financing

home mortgage financing

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Purchases with 20% down or less. Home purchases in Canada with 20% down or less must go through a mortgage insurer such as CMHC (Canadian Mortgage and Housing Corporation) or Genworth. CMHC sets guidelines the applicants must meet to approve the mortgage insurance.

Purchasers who are employed, have 2 years of clean credit, have 2 credit lines (credit card, car loan, line of credit) open for at least 1 year (on both lines) and a minimum beacon score of 600 should qualify for a purchase with 5% down. Provided their income supports their debt load and the down payment comes from a traditional source (savings, RSP, property, non-repayable gift from immediate relative. Applicants who meet the above criteria and who have a beacon score above 650 may be able to purchase the home with a non traditional down payment (borrowed funds, line of credit, lender cash back). This means a client with a good credit history and credit rating may qualify to purchase a home with 0% down.

Self employed borrowers who have proveable income for 2 years with 3rd party validation, have 2 years of clean credit, have 2 credit lines (credit card, car loan, line of credit) open for at least 1 year (on both lines) and a minimum beacon score of 600 or higher should qualify for a purchase with 5% down. Self employed borrowers who do not have proveable income, less then 3 years of business operation, a minimum beacon score of 650 and have a down payment from traditional sources (gift down payments which are not permitted) can purchase a home with 10% down. Commission-based borrowers do not qualify without 3rd party validation. Self employed borrowers who do not have proveable income do not qualify with a non traditional down payment

Bad Credit. Borrowers who do not meet the mortgage insurers guidelines, have unproveable income, a poor credit history, including bankruptcy and consumer proposals can still purchase a home with as little as 20% down.

Rental Property – 1-2 Units owner occupied.. Borrowers who are employed or self employed (with 3rd party validation and proveable income for 2 years), have 2 years of clean credit, have 2 credit lines (credit card, car loan, line of credit) open for at least 1 year (on both lines) and a minimum beacon score of 600 should qualify for a purchase with 5% down. Provided their income supports their debt load and the down payment comes from a traditional source (savings, RSP, property, non-repayable gift from immediate relative. Borrowers with non traditional down payment (borrowed funds, line of credit, lender cash back) and a minimum beacon score of 650 also qualify for a purchase with 5% down. Self employed borrowers who do not have proveable income and less then 3 years of business operation can qualify with 10% down and a minimum beacon score of 650 .

Rental Property – 3-4 Units owner occupied. Borrowers who are employed or self employed (with proveable income for 2 years), have 2 years of clean credit, have 2 credit lines (credit card, car loan, line of credit) open for at least 1 year (on both lines) and a minimum beacon score of 600 should qualify for a purchase with 10% down. Provided their income supports their debt load and the down payment comes from a traditional source (savings, RSP, property, non-repayable gift from immediate relative. Not available to self employed with no 3rd party income validation.

Newcomers (permanent residents) to Canada with proveable income (employed or self employed for 2 years with 3rd party validation) can purchase a home with up to 1-2 units with traditional and non traditional down payment and limited Canadian credit history with 5% down or 10% down for 3-4 units. Newcomers (permanent residents) with proveable income (employed or self employed for 2 years with 3rd party validation) can purchase a home with up to 1-2 units with traditional and non traditional down payment and limited Canadian credit history with 5% down. up to 90% for 3-4 units and traditional down payment. 3-4 unit properties are not available to Newcomers with non traditional down payments or with self employed income without 3rd party validation.

Non-permanent residents are limited to a 1 unit owner-occupied property and a maximum LTV of 90%. Borrowers without third party validation of income are not eligible.

Mortgage brokers protect your credit rating. When you use a mortgage broker, we only pull your credit report once. That same report is then forwarded on to select lenders. When a consumer shops around independently, each bank will pull their own credit report. These increased inquiries can lower your credit score and work against you.