Home buyers in Canada have seen lender flexibility and options dramatically decrease for their jumbo mortgage needs.

This means that many people in Canada who are purchasing homes between 1.2 million and 3 million are not receiving the same amount of funds they would have a year ago and are sometimes running short on their down payment money due to reduced lending amounts.   The good news is that due to our strong lender relationships we are often able to help you obtain more mortgage money to meet your large mortgage requirements.  For our options below, we are assuming that your down payment is at least 20% for your purchase.  The reason for this is about a year ago the government of Canada removed CMHC’s ability to insure mortgages with less than 20% down payment for purchases of 1 million or more so your minimum down payment for homes over 1 million is 20% of your purchase price.

Lets first describe what a Jumbo mortgage is and why there are now lending issues:

• A jumbo mortgage is generally a mortgage over $960 000 for a home with values over $1.2 million
• The issue that clients run into for home purchases over between 1 million is that the lender institutes a sliding scale.  The sliding scale is in place for almost all major Canadian banks, how is works is that most banks will approve up to 80% of the first $1 million of your purchase price and then 50% of the remainder.  Lets look at an example to see how this affects our jumbo loan clients:

Jumbo Mortgage sliding scale example:

• Lets assume we have a client who is purchasing a home for $1.7 million dollars
• Based upon an standard budget, 20% down payment for our client is $340 000 – with a mortgage amount of $1 360 000, and 25% down is $425 000 – with a mortgage amount of $1 275 000.
• However based upon a normal lender sliding scale of 80% loan to value of the first $1 million of purchase price and 50% of the remainder:
  • The down payment requirement jumps to $550 000 as the loan amount decreases to $1 150 000
  • Based upon the sliding scale you have an effective loan to value of under 68% and an increased minimum down payment requirement of between $125 000 and $210 000.

As you can see above, the typical lender sliding scale for jumbo mortgages is very punitive and can result in you paying hundreds of thousands of extra down payment to purchase your home.

Our Jumbo mortgage solution:

• We have many years of experience in working with clients who are obtaining larger than average mortgages.
• Our years of experience allows us to understand how Canadian lenders think and operate along with which lenders are more likely to grant the exceptions that we require.
• We understand how to package your mortgage in the most attractive way possible to obtain a higher mortgage amount
• We fund millions of dollars of mortgages per year with our lending partners and use that relationship as leverage to your advantage.

Our typical success rate for clients who are purchasing homes in the $1.3 million to $2 million range is achieving a loan to value of just over or just under 75%, with best rates and terms.  This is a significant increase above the 68% loan to value average offered by most Canadian banks.  In the above example, this is a difference in down payment amount to you of  an additional $119 000 that you do not have to pay for down payment.  We work with our jumbo loan clients to understand your goals and ensure we do our utmost to achieve them with you.

If you have a jumbo mortgage question or would like assistance please contact me directly.

Rylan Hahn 403-802-7201