LTV – Loan To Value ratio. The amount being borrowed versus the value of the property. A $190,000 mortgage on a $200,000 property would produce a 95% LTV ratio.
TDS – Total Debt to Service ratio. The amount of debt being serviced as a percent compared to the total income.
A traditional insured mortgage. Any non private mortgage in Canada with less then 20% down must be insured. To obtain mortgage insurance through CMHC you will require at least 2 years of discharge from bankruptcy and at least 1 year of re-established credit on two credit items (credit card, loan, etc.). Genworth insurance requires 2 years bankruptcy discharge and 18 months of re-established credit.
A subprime mortgage. A subprime mortgage is a mortgage that falls just outside of CMHC insured lender guidelines. These
lenders assist borrowers who are not bad off enough for a private mortgage but will not qualify through a traditional lender.
A private mortgage. Most private mortgages will require 15% down and have an annual interest rate of between 12%-15%. Usually a borrower can obtain a first mortgage from a traditional lender up to a specified percentage (at a much lower interest rate) and a private mortgage can be used to top up what is required to finance the home.
For more information on obtaining a mortgage after bankruptcy in Ontario or if you have had a bankruptcy and are looking for a mortgage, please call today or apply online .
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Re-establishing Your Credit After Bankruptcy