Investment Properties
New - Low Down Payment Investment Property Mortgages
Genworth, a competitor to CMHC, now makes it possible to purchase a rental property with as little as 10% down payment through their new Investment Property Program.
The Investment Property Program is designed for individuals who are looking to diversify their investment portfolio and who have a proven history of managing their credit and finances responsibly. In addition to purchasing a rental property, borrowers can refinance existing rentals up to 90% Loan-To-Value.
Highlights;
- Very good rates (very close to best)
- Up to 90% LTV for a 1-4 unit Rental Property
- Fixed, Variable and Adjustable Rate Mortgages Permitted
- Extended amortizations up to 35-years
With the Investment Property Program borrowers can;
- Purchase or Refinance an investment property up to 90% LTV
- Benefit from competitive interest rates and no application fees
- Enjoy the payment flexibility that comes with an extended amortization
- Purchase an investment property in a cost-effective manner
- Enjoy the convenience of one mortgage and one monthly payment
Insurance premium
|
Loan to Value
|
25 Year
Amortization
|
30 Year
Amortization
|
35 Year
Amortization
|
40 Year
Amortization
|
|
85.01 - 90%
|
4.75%
|
4.95%
|
5.15%
|
5.35%
|
|
80.01 - 85%
|
3.50%
|
3.70%
|
3.90%
|
4.10%
|
|
75.01- 80%
|
2.50%
|
2.70%
|
2.90%
|
3.10%
|
*One time payment which is added to the mortgage amount
Traditional - 25% Down Payment Investment Property Mortgages
With a minimum 25% down payment purchasers have many options available to them when buying investment/rental property.
What is the cost for Mortgage Insurance?
With 25% down the mortgage is conventional and no mortgage insurance is required.
Net Worth
The requirement for a minimum net worth varies from lending institution to lending institution. Most lending institutions do not have a minimum net worth, however some require that you have a minimum $100,000 net worth per rental property.
Debt Coverage Ratio
The requirement for debt coverage ratio varies from lending institution to lending institution. Some institutions will use rental off set for qualifying purposes. While other lending institutions will use 1.10% debt coverage ratio.
1.10% debt coverage ratio is arrived at by dividing the Net Operating Income by the Debt Service. Please see Debt Coverage Worksheet below.
Rental off set is when a lending institution uses 70% of the rental income and off sets it against the P.I.T. Only the shortfall will be included in the Debt Ratio. If there is a rental surplus this will be added to the client’s income. Assume a rental property with P.I.T. of $1432 and rental income of $2000. We will take 70% of the $2000 income ($1400) and deduct that from P.I.T. ($1432). We will only add the $32 shortfall to the Debt Ratio.
Contact one of our experts today.