HawthorneVillager.com

Starting April 9th here's what will be different for people who fall under these guidelines.

Current CMHC program states that if a client can show self-employment for over 2 years with one of these: business license, GST return, articles of incorporation they qualify on a "Stated income" but still have to go through a reasonability test. They can then qualify for 95% (though they pay a hefty CMHC premium) on a purchase and 90% on a refinance.

Starting April 9th, if you have been BFS for over 3 years, you will need to qualify using traditional proof of income. It will mostly be based on the last 2-3 years average from your T1 generals or Notice of assessment. This means that if you write off as much as you can, or keep all your money in your company and pay yourself strict minimum for tax purposes, you will have to come up with 20% down payment for a fully discounted rate. If you only have 10%-15%, it will likely be a combination of 1st mortgage at 80% and fully discounted rate and private 2nd mortgage for remainder.

If you are between year 1-3 of being BFS than the product will be similar to now as far as the "Stated" part is concern.

The maximum Loan to Value will also drop to 85% on refi's and 90% on purchases.

For commissioned agent you will no longer qualify on any of the CMHC stated product regardless of time in business. You will have to show income through 2-3 years average.

If your closing is coming up in the next few months and you don't have a final approval for your mortgage, you need to take care of this PRONTO! I assume that there will be some kind of leeway for purchases done before April 9th but i wouldn't risk.

cheers,
mat

_________________
Mathieu Fugere
Mortgage agent
Licence #M08005933
Office: 416.945.9123
Cell: 416.899.7847
Fax: 905.693.8657
mathieufugere@mortgageedge.ca
www.mortgageedge.ca

Just to add to this point....you have to have been in the same line of work for a minimum of 2 yrs.

_________________
Christina Jackson
Mobile Mortgage Specialist
TD Canada Trust
T: 647 292 7597
F: 905 377 1634
P: 866 767 5446
email: christina.jackson@td.com