Canadian Mortgage News
October 5, 2011
Net Worth Lending Program
Available now, the Net Worth Lending Program offers a unique mortgage oppo
rtunity for owner-occupied principal residents based on Net Worth with no income verification. Clients must have a minimum Beacon Score of 680 in addition to salaried employment with good credit and net worth. The Net Worth Lending Program requires applicants to show an
accumulation of their savings/deposits of the minimum 25% down payment from their own resources. At the time of application, borrowers must have a positive overall net worth and demonstrate ownership of eligible liquid assets of 12, 24 or 36 worth of monthly Principal Interest and Tax (PIT) payments:
LVR 60.01 – 75%: 36 PIT payments
LVR 35.01 – 60%: 24 PIT payments
LVR 15.00 – 35%: 12 PIT payments
LVR less than 15%: N/A
Example 1 Applicant
Mr. Smith is a salaried employee at an oil and gas company and
is looking into financing options to purchase a home at
$400,000.00. Mr. Smith has been a saver all his life and has
accumulated a large amount of liquid assets over the years;
however, his salary is not quite high enough for him to qualify
for a mortgage based on his income. Mr. Smith is an excellent
candidate for the Net Worth Lending Program.
Example 2 Applicant
Mrs. Jones is a salaried employee at an accounting firm, she has
found her dream home for $400,000.00 but is afraid she cannot
qualify for this home as she had co-signed for her son's
mortgage. She has done very well with her investments and has
accumulated a large amount of liquid assets. Even though her
income may not allow her to qualify for this mortgage her assets
show the lender that she can manage and maintain her
payments based on the liquid assets in her possession. The Net
Worth Lending Program is a perfect fit for Mrs. Jones.
Purchase Price: $400,000.00
Down Payment: $100,000.00 (from own resources)
Mortgage: $300,000.00 mortgage to own home
Term: 5 years
Amortization: 30 years
Interest rate: 3.69
Mortgage Payments: $1374.40/month
Property Taxes: $150.00/month
· 36 Principle Interest Tax payments (additional net worth
requirements) = (1374.40 +150.00) x 36 =
$54,878.40
In short, if Mr. Smith and Mrs. Jones have $100,000.00 for the
down payment along with $54,878.40 totalling 154,878.40 in
liquid assets then they will both be eligible for the Net Worth
Lending Program allowing them to purchase their $400,000.00
homes.
Available now, the Net Worth Lending Program offers a unique mortgage oppo
rtunity for owner-occupied principal residents based on Net Worth with no income verification. Clients must have a minimum Beacon Score of 680 in addition to salaried employment with good credit and net worth. The Net Worth Lending Program requires applicants to show an
accumulation of their savings/deposits of the minimum 25% down payment from their own resources. At the time of application, borrowers must have a positive overall net worth and demonstrate ownership of eligible liquid assets of 12, 24 or 36 worth of monthly Principal Interest and Tax (PIT) payments:
LVR 60.01 – 75%: 36 PIT payments
LVR 35.01 – 60%: 24 PIT payments
LVR 15.00 – 35%: 12 PIT payments
LVR less than 15%: N/A
Example 1 Applicant
Mr. Smith is a salaried employee at an oil and gas company and
is looking into financing options to purchase a home at
$400,000.00. Mr. Smith has been a saver all his life and has
accumulated a large amount of liquid assets over the years;
however, his salary is not quite high enough for him to qualify
for a mortgage based on his income. Mr. Smith is an excellent
candidate for the Net Worth Lending Program.
Example 2 Applicant
Mrs. Jones is a salaried employee at an accounting firm, she has
found her dream home for $400,000.00 but is afraid she cannot
qualify for this home as she had co-signed for her son's
mortgage. She has done very well with her investments and has
accumulated a large amount of liquid assets. Even though her
income may not allow her to qualify for this mortgage her assets
show the lender that she can manage and maintain her
payments based on the liquid assets in her possession. The Net
Worth Lending Program is a perfect fit for Mrs. Jones.
Purchase Price: $400,000.00
Down Payment: $100,000.00 (from own resources)
Mortgage: $300,000.00 mortgage to own home
Term: 5 years
Amortization: 30 years
Interest rate: 3.69
Mortgage Payments: $1374.40/month
Property Taxes: $150.00/month
· 36 Principle Interest Tax payments (additional net worth
requirements) = (1374.40 +150.00) x 36 =
$54,878.40
In short, if Mr. Smith and Mrs. Jones have $100,000.00 for the
down payment along with $54,878.40 totalling 154,878.40 in
liquid assets then they will both be eligible for the Net Worth
Lending Program allowing them to purchase their $400,000.00
homes.