If you’re self-employed, don’t claim much income, are in a unique financial situation or just can’t qualify with the bank for whatever reason, it’s imperative you learn about extended ratio mortgage lending programs. 

Why? 

It’s no secret major banks have stricter lending guidelines and also have to adhere to Government-mandated policies such as conservative GDS and TDS thresholds.

What are GDS and TDS?

GDS stands for Gross Debt Servicing. GDS is the percentage of your income that is required to pay all your monthly expenses, including mortgage principal and interest payments, property taxes and heat. 

Banks usually allow a GDS of 35-39% depending on your credit score. If your score is over 680, then GDS can go up to 39% whereas if it’s lower, the maximum GDS is 35%.   Your credit score must not be lower than 620 in most cases. 

TDS stands for Total Debt Servicing. TDS is the percentage of your income that covers all of your debts. So besides the liabilities that make up GDS we are also including all other loans and their monthly payments such as credit cards, car payments, and personal loans. Banks allow a TDS of between 42-44% depending on your credit score. 

What are extended ratios programs?

Extended Ratio programs allow for a higher percentage of GDS and TDS. For example, an extended ratio program may consider 50% GDS and 55% TDS, which means you can qualify for significantly more mortgage.


Are interest rates higher?

With more risk usually comes higher interest rates, however, extended ratio programs offer extremely competitive interest rates, which make them a great option for those borrowers that don’t fit into the big bank’s criteria.

Here’s an example of a client I recently got approved who was declined by four major banks. 

Mortgage amount $750,000
Discharged from Bankruptcy for 1 year only. 
Credit Score 604
Interest Rate: 3% for a 3-year fixed term. 

Do you have questions or do you need advice about financing? Please call or write. 

Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge, Broker 10680
Direct:  (647) 773-4849
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Interest rates have remained incredibly low because of the pandemic. Recently, however, a vaccine developed by Pfizer showed some promising results for its COVID-19 vaccine efficacy. 

Some people wonder if Canadian mortgage interest rates will increase because of this development.

It’s likely Canada’s five-year mortgage rate will increase. Some brokers and economists predict that rates will jump approximately 10 to 20 basis points soon.  For example, if current rates are 2%, borrowers could expect rates to jump to 2.20%. 

Once the Pfizer vaccine is proven to be safe and is approved by Health Canada, lenders will feel more comfortable increasing their interest rates which would set them on a path for further rate increases. 

What does this mean for you? If you’re currently shopping for a mortgage and wondering what term to take, consider the five-year fixed rate. Although variable rates have proven to be cheaper over the last 30 years, five-year fixed rates protect against economic volatility. 

If you’re considering refinancing your mortgage to complete debt consolidation or to access the equity in your home, it’s wise to take advantage of record-low interest rates today. We may not see them again for a very long time.
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Call or write today. Consultations are always free.


Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca
Website: www.coluccimortgages.com

The Purchase Plus Improvements Program allows you to borrow money at the cheapest possible costs.

You can renovate a home in your budget in as little as 60 days and merge the costs associated with your reno into your new mortgage.

For more information, please call or write.

Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca
www.coluccimortgages.com

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I recently helped clients who couldn't qualify for mortgage financing. Unfortunately, their application did not not qualify but only by a hair. The lender required that they pay off a personal loan in order to qualify. While they didn't have this amount of money available in their bank account, a cash back allowed them to pay off their debt and close their purchase transaction. 

This is an excellent example of how a cash back can be the difference between qualifying for a mortgage and not qualifying. It's important, however, to consider the disadvantages as well. 

A cash-back usually comes with a slightly higher interest rate and must be repaid in full if the mortgage contract is broken before the end of the term. 

Watch the video below to learn more. 

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Mortgage refinancing is the best tool for consolidation, especially today because of record-low interest rates. If you're a property owner and you need to reduce debt, I encourage you to explore this option.

The primary reason refinancing is the gold standard is because the mortgage is secured against your property, which allows you to pay the lowest rate possible, which translates into very low payments.

Refinancing also has enormous benefits both in the short and long term.

In the short term, a person can recuperate more cash flow each month, which makes living more enjoyable and allows room for savings.

In the long term, a person pays less interest (if at all) on the debts that would have not only been more expensive but for many, impossible to pay off.

Think of credit cards. Credit card companies compound interest daily on any outstanding balances. This means that from the moment a person makes their minimum payment all the way to their next payment date, interest is compounding every twenty-four hours.

While the “minimum payment” may be low, it's difficult for a person to get out of credit card debt making these payments because the compounding formula prevents them from getting ahead of the payment cycle.
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Ultimately, refinancing removes this tough formula of interest calculation altogether. Instead, the mortgage gets set over an amortization period for a specific term (i.e. 5 years), which drastically reduces payments.

Now you may want to point out that amortizing debt out over a longer period time equals interest payments. You are correct. However, there are a couple of things to consider. For one, consider cash flow. How much cash flow do you now available on a monthly basis? Two, can you use your prepayment privilege to pay down debt faster and without interest? Yes, you can.

Prepayment terms allow you to increase your payments and make lump sum payments at no extra cost.

For example, if you consolidated a credit card of $10,000 into your mortgage, you could pay off that credit card in two years without interest if you increased your mortgage payments $416 each month. If you left that $10,000 debt on your credit card at 19.9999%, it may take you 2.6 years and over $2,700 in interest to pay it off and that's assuming you haven't made any further purchases.

So as you can see, there are ways you can use refinancing to not only save yourself money each month but also get around interest payments.

From a cash flow perspective, being able to amortize your debt over a longer period of time creates enormous opportunities for a reduction of expenditures. Many times, refinancing at a low interest rate will reduce your mortgage payments even with the new debt added in.

Why not explore mortgage refinancing and debt consolidation today?


Feel free to call or write.


Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge, Broker 10680
Direct: (647) 773-4849

The excellent news is it is possible to get a mortgage in Canada with bruised or poor credit. In Canada, we have two types of mortgages: conventional and high-risk.

A purchaser requires a high-risk mortgage when he or she has less than a 20 percent down payment. Lenders must insure the mortgage through one of the three high-risk mortgage insurers, which are Genworth, Canada Guarantee and CMHC. Unfortunately, to get a high-risk mortgage, a borrower must have good credit as this is a requirement of not only the banks and other various lenders but also of the insurance companies.

Therefore, if you wish to purchase a home with less than 20% down payment, you must have good credit.

A good credit score is anything over 680. As of July 1, 2020, CMHC changed its policy regarding credit scores and requires at least one applicant to have a score of over 680 to qualify for a high-risk mortgage with the minimum score being at least 600. All lenders will also have their own credit requirements for high-risk mortgages, which usually means the score must be well over 600.
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We can offer financing to those with bruised credit if they have a 20 percent down payment or more. With bruised credit, “B” lenders, also known as alternative lenders, can offer borrowers financing that is still competitive (usually 1-2% more than Prime lenders are offering).

For more information, feel free to call or write. 

Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge Broker 10680
Direct: (647) 773-4849

Before you begin house hunting, it’s important to know what you can afford and how much mortgage you can get from a bank.

Getting pre-approved makes the home buying process much easier since you can view properties in your price range almost immediately with a better chance of successfully purchasing your dream home.

What’s involved in getting a pre-approval?
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During a pre-approval appointment, we will gather your personal information including address, date of birth and employment information. We will request to see your income documentation preliminarily to ensure we are using the correct amount in the application.

If you are self-employed or hourly, we will take extra steps to ensure we have used the most income to qualify you, which is usually a two-year average based upon your filed taxes or T4s.

Sometimes, we can use bank statements to show income for self-employed individuals. 

We will also collect other documentation that supports additional income such as child support, alimony, ODSP or the child tax credit. 

What makes a pre-approval different from a pre-qualification is we underwrite your application upfront to guarantee we have offered the most mortgage you will receive. We also have an interest rate held for you for up to 120 days which allows you to shop for a home knowing you will still receive a great rate despite rate fluctuations.

To get started on a mortgage pre-approval today, apply here.
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Sarah A. Colucci
Mortgage Agent, Lic. M14000929
Mortgage Edge, Broker 10680 
Direct: (647) 773-4849

If you get mortgage financing with a prime lender, usually there will not be a broker fee involved. A prime lender often approves only those borrowers who have good credit and enough income to service the requested loan amount.  Examples of prime lenders are major banks, credit unions and monoline lenders. 

Your broker may charge a broker fee if you require an alternative loan or private loan. These types of lenders service borrower who either have bruised credit or a unique income situation or don’t fit the criteria of prime lenders. Unfortunately, there isn’t a standard fee that brokers charge with alternative and private loans since it depends on each file.

Why Is There A Broker Fee Payable For Alternative and Private Loans?

Not all brokers will charge a fee on alternative loans. However, in most cases, alternative and private lenders do not compensate brokers for the file they originated. Therefore, the fee becomes payable by the borrower.

If you have questions about broker fees, please call or write. 

Sarah A. Colucci
Mortgage Agent, Lic. M14000929
Mortgage Edge, Broker 10680 
Direct: (647) 773-4849

Evan Siddall of Canada Mortgage and Housing Corporation recently emphasized that properties across Canada will depreciate up to 20 percent by the end of 2021.

This is because Canada’s unemployment level is likely to remain dramatically elevated, which will affect property prices since it will force more people to put up the for sale sign.

Real estate value is determined by supply and demand. Therefore, a higher rate of unemployment and insolvency means more properties for sale and fewer people able to buy them. Prices will automatically be driven down. 

Depreciation is closely related to refinancing and something to monitor. How much money you can borrow from a bank or other financial institution depends on property value.

Most mortgage lenders will currently offer 80 percent of your property’s value in financing, however, this may be scaled back to 75 percent to mitigate risk related insolvencies and declining property values.

If you happen to have unsecured debt and have been contemplating a debt consolidation or refinancing your mortgage, consider what it would mean if your property suddenly lost 20 percent of its value.

Could you refinance based on what I just outlined?

If your property is currently worth $500,000 and you have a $350,000 mortgage but you need to access $50,000 for debt consolidation or renovations, for example, could you still accomplish this if your property suddenly became valued at only $400,000?

The answer is no.

If you can't refinance to pay high-interest debt such as credit cards or personal loans, you will have no choice but to keep making interest-only payments until your property value increases again.

Ultimately, the point of refinancing is to save money and spare your credit rating.

Credit cards bear significantly higher interest, which get compounded daily and become expensive, if not impossible to maintain.

Many people who get stuck in credit card debt traps can impair their credit score or sink into default.

Therefore, if you can refinance and it makes sense for you to do so, it would be worth your while to take advantage of low interest rates and stable property prices.

​We could see an unfamiliar environment in the next six months that may seriously inhibit your ability to do so. ​

Sarah A. Colucci
Mortgage Agent, Lic. M14000929 
Mortgage Edge, Broker 10680 
Direct: (647) 773-4849