Frequently Asked Questions
What is the Loan to Value ratio (LTV)?
Loan to Value is a lending risk assessment ratio for approving a mortgage, including private mortgages. Typically, assessments with high LTV ratios are generally seen as higher risk and the loan will cost the private borrower more to borrow or will need to purchase mortgage insurance. The LTV ratio describes the relationship of mortgage amounts to the appraised value of your property.
- For instance, if your property is worth $1,000,000 and your 1st mortgage is $500,000: 1st mortgage LTV ratio would be 50%, 1st mortgage LTV = $500,000 ÷ $1,000,000 = 50%
- If you add a 2nd mortgage of $250,000, the combined mortgage is $750,000: LTV would be increased to 75%, 2nd mortgage LTV =($500,000 + $250,000) ÷ $1,000,000 = 75%
LTV is used to evaluate risk to determine the amount loaned to a private borrower, along with the interest rate.
What is a First Mortgage Penalty Payout?
When breaking your mortgage early, usually because of a refinance or the sale of your home, you will need to pay your lender a penalty called a prepayment penalty. The amount you pay depends on the day you signed your original mortgage contract, the term of that contract and your existing mortgage balance, rate type and mortgage rate.
A variable versus a fixed mortgage rate is the biggest factor in the first mortgage penalty payout. Fixed rate holders pay the greater of interest rate differential or three months interest, while variable rate holders pay just three months interest. In some situations, a second mortgage can help with a high first mortgage penalty payout.
Home Loan Application Checklist?
Here’s what you need to get the home you want.
To apply, we’ll need copies of the following:
- Copy of the purchase and sale agreement
- Your home address for the past two years
- Employer’s name and address for the past two years
- Last two pay stubs and the past two years’ T4w
- Proof of other income (rental agreements, copies of contract receivables plus 12 months’ payment record, and/or record of alimony or child support and child support payments received – alimony need not be revealed)
- Bank and brokerage statements
- Outstanding loans—including company name, address, account number, balance and monthly payment
- Landlord’s name, address and phone number, if applicable
- If self-employed or commissioned sales, last two years’ tax returns, and for the business, a year-to-date income statement and balance sheet
What is Debt Consolidation?
Do you find yourself juggling multiple debts, interest rates and payment schedules every month? A Vancouver Debt Consolidation Loan from us can make easier and more convenient to manage your debt while lowering how much you actually have to pay every month.
A debt consolidation loan allows you to combine all of your existing debt – including credit cards, lines of credit or loans – into a single, predictable payment. We’ll work with you to help you pay one interest rate, reduce what you pay, improve your cash flow and get closer to being debt-free sooner. We work with clients throughout Metro Vancouver and British Columbia looking for a lender who understands our unique market and economy.
Is a Debt Consolidation Loan the right choice for you?
- Are you tired of juggling multiple (five or six) payments each month?
- Are you at risk of missing one or more payment?
- Do you find yourself only making minimum payments?
- Other creditors charging interest rates higher than today’s mortgage rates?