Lending Guidelines
Co-brokered deals pose a potential risk. It also depletes our queue resources and makes it difficult for our underwriting team to service our valued Broker partners and their customers.
Effective immediately, we will no longer accept co-brokered applications for brokers who are not registered at your office through BCFSA.
- Progressive Mortgages - owner occupied
- Vacant land (serviced or un-serviced)
- ¼ shares, hotel suites, boarding houses
- Operating farms
- Leaky condos that haven’t been fully re-mediated
- Co-ops
- Properties in a rental pool
- Second mortgages behind another lender
- Equity Lending Products
- Float Homes
- Pre-sale purchases with completion dates greater than 120 days
|
Guidelines |
Standard high-ratio insured guidelines apply:
|
|
|
Rental Income |
Suite(s) in Residence:
Non-Subject Rental Properties:
|
|
|
HELOCs |
HELOCs are allowed both concurrently and as a Sub-Advance behind an existing insurable mortgage.
|
|
|
**Transfer-Ins
|
Straight transfer in’s qualify for the Insurable rate offering. There must be no new funds, with the exception of a $3,000 max allowance for costs related to the transfer (i.e. legal costs, admin fees, penalties). The original purchase price must have been less than $1M:
Amortization must be the lesser of the current remaining amortization or 25 years:
A mortgage that is currently High-Ratio Insured is not eligible for the insurable product. It must be transferred in as insured and it must be currently insured with either CMHC or Sagen |
|
|
Strata Minutes |
Not required to review strata minutes unless it is discovered that further investigation is needed. |
|
|
Ineligible |
Not all transactionally Insured High Ratio scenarios will qualify under Insurable parameters. The following property types are ineligible: |
|
|
|
|
|
- Eligible for a standard, Multi-Purpose Mortgage
- Maximum LTV ratio
- 80% of the 1st $2,000,000 and 60% of the remaining value for primary residence located in Metro Vancouver. Revolving HELOC portion cannot exceed 65% LTV
- 80% of the 1st $1,500,000 and 60% of the remaining value for primary residence located in Greater Victoria, Fraser Valley, and Central Okanagan:. Revolving HELOC portion cannot exceed 65% LTV
- All other areas: 80% of the first $1,000,000 and 65% of the balance. Revolving HELOC portion cannot exceed 65% LTV
- Maximum GDS/TDS ratio:
- 39/44% for beacons 680+
- 35/42% for beacons 620 - 679
- Maximum amortization – 30 years
- Maximum mortgage $2,500,000
- Qualify using the Stress Test
- 100% of the gross rental income added to gross employment income from a maximum of 2 suites for debt servicing purposes. Property taxes and heating cost must be included in the qualifying calculation
Suites must be self-contained and have the following minimum amenities:
- Kitchen with a fridge and stove
- Bathroom
- Private entrance
- Eligible for a standard or Multi-Purpose Mortgage
- Maximum LTV ratio
- 80% of the 1st $2,000,000 and 60% of the remaining value for residence located in Metro Vancouver. Revolving HELOC portion cannot exceed 65% LTV
- 80% of the 1st $1,500,000 and 60% of the remaining value for residence located in Greater Victoria, Fraser Valley, and Central Okanagan:. Revolving HELOC portion cannot exceed 65% LTV
- All other areas: 80% of the first $1,000,000 and 65% of the balance. Revolving HELOC portion cannot exceed 65% LTV
- Maximum GDS/TDS ratio
- 39/44% for beacons 680+
- 35/42% for beacons 620 - 679
- Maximum amortization – 30 years
- Maximum mortgage $2,500,000
- Qualify using the Stress Test
- Non Subject Revenue Property – Rental Income Analysis
- Gross Monthly Rental Income – (Principal + Interest + Property tax + Heat* + 50% of Strata + Vacancy Allowance + Maintenance Allowance) = Net Rental Gain/Loss
- The rental income analysis (“RIA”) must use the lower of the borrower’s stated or verified rental income.
- The vacancy allowance is 5% of the gross monthly rental Income.
- The property maintenance allowance is the greater of 15% of the gross monthly rental income or actual maintenance cost as reflected in the T1 for debt servicing.
* Include heat in the RIA calculation when the tenant does not pay for the heat bill.
- Rental Income – Subject Revenue Property
- In Metro Vancouver, Greater Victoria, Fraser Valley and Central Okanagan we can add up to 90% of the gross rental income to gross employment income for a subject Rental Property to calculate debt service. Must include heating cost in TDS when the tenant does not pay for the heating cost. All other areas up to 85%
- Eligible for a standard or Multi-Purpose Mortgage
- Best rates available for all CMHC and Sagen insured mortgages
- CMHC-max LTV 95% for purchase
- Purchase price must be below $1,000,000
- Maximum amortization – 25 years
- Maximum GDS/TDS as allowed by the insurer
- Use of rental income as allowed by the insurer
Hobby Farms are defined as a small farm that is maintained without expectation of being relied upon as a source of income for the household. Some are merely to provide some recreational land, or a few animals like horses or chickens to retain farm status for tax purposes. There are many variations of hobby farms.
- Eligible for a standard, Multi-Purpose MortgageEligible for a standard, Multi-Purpose Mortgage
- Max LTV is 75% of the first $1,000,000 of the house and 1st 5 acres, 50% of the balance (excluding outbuildings). Revolving HELOC portion cannot exceed 65% LTV
- Maximum GDS/TDS ratio:
- 39/44% for beacons 680+
- 35/42% for beacons 620 – 679
- Maximum amortization – 30 years
- 100% add back to income including taxes and heat for suite income (up to 2 suites)
- Qualify using the Stress Test
In addition to the minimum document package, obtain the Head Lease and Sub Lease if applicable and confirm the following:
- The lease is prepaid
- Owner Occupied property only
- Confirm the property is on the Coast Capital approved list of leaseholds or First Nations leaseholds and matches the version that was previously approved by emailing a copy of the Lease to: Brokerrelationsmanager@coastcapitalsavings.com
- The remaining term of the lease is at least 5 years longer than the requested mortgage amortization. Maximum amortization is 30 years for Conventional.
- Appraisal is required for conventional mortgage and must be ordered through Solidifi and completed by a Coast Capital approved appraiser
- Max LTV for conventional mortgage is 80% on the first $1,000,000 and 65% on the balance
- HELOC ineligible
- Regular rates apply with no rate premium
- Can consider Conventional mortgage or Insured by CMHC/Sagen. Please confirm insurer’s guidelines prior to submission.
- We will not consider mobile/manufactured home on leased land
- When submitting the application, attach the email from the Broker Centre confirming the property is on the Coast Capital approved list
Increased emphasis is placed on the quality of the collateral and strength of the client’s traditional repayment for clients with impaired credit.
Submission notes to include the reason for the impaired credit and the overall plan to remediate.
- Owner-occupied only
- Beacon score range of 550 - 619
- Full income verification is required
- Maximum GDS/TDS is 35/42
- Maximum amortization is 30 years
- Metro Vancouver- 65% of the first $2,000,000 and 50% of the balance
- Greater Victoria, Fraser Valley and Central Okanagan 65% of the first $1,500,000 and 50% of the balance
- All other areas- 65% of the first $1,000,000 and 50% of the balance
- Appraisals are required on all applications
- Maximum mortgage $1,500,000
- HELOC ineligible
Pricing
- Credit score 600 - 619: 100 - 150bps premium + 1% fee at lender's discretion
- Credit score 550 - 600: 150 - 275bps premium +2 % fee at lender's discretion
Bridge Financing
- Bridge financing is required when a member has purchased a property that completes prior to a firm and binding sale of another property and temporary financing is needed to complete the purchase.
- Maximum 2 month term
- Must be mortgage secured
- Sufficient equity must be available from the two properties and the member’s own resources to complete the purchase of the new property
- Firm and binding sale agreement.
- $1,000 Fee
Interim financing
- Interim financing is required when a member has purchased a property that completes prior to a sale of another property with no firm and binding sale, and temporary financing is needed to complete the purchase.
- Maximum 6 month term
- Must be mortgage secured
- Sufficient equity must be available from the two properties and the member’s own resources to complete the purchase of the new property
- Pending sale property must be listed for sale
- A payment reserve at least equivalent to the term is required
- A 1% Fee applies
What is FCT?
FTC stands for First Canadian Title.
Purpose & Background
This program is designed for:
- New Process to Transfer in mortgages to Coast Capital Savings from other Financial Institutions
- Mortgage refinances or increases of existing mortgages on residential properties that are currently owned by the member(s), consisting of not more than six (6) units
- Equity take out on a clear title property
What is Title Insurance?
Title insurance protects the lender and homeowner against a number of risks related to the property's title or ownership such as fraud.
Benefits for the Client
- Title insurance provides better protection, insuring the enforceability and priority of your mortgage as well as mortgage related fraud and forgery
- Low fixed price for your client(s)
- A simplified process for both you and your client, resulting in a quicker turnaround time as there is no need to book a separate appointment with a Law firm
Review Options with Client
Your clients have two options to transfer their mortgage to Coast Capital Savings:
- The current process in place using a Coast Capital Savings Approved Law Firm
- The FCT Refinance program
Review both options with the client prior to submitting the application to Coast Capital Savings.
Title Search
- The titles on the application must match what is on the title search
- Confirm your client’s legal names on the application match the title search
- If the title search reveals discrepancies, Coast Capital Savings may contact you to discuss the options to resolve the title defects. It may be necessary to contact the client for more information and/or further clarification
- If you are removing or adding any borrowers to the title then you cannot use the FCT Refinance Program and must proceed with our current process of using a Coast Capital Savings Approved Law Firm
Mortgages that Qualify
- Collateral Mortgages
- Conventional mortgages
- Default Insured mortgages
- Inter-alia mortgages
Properties that Qualify
- Personal residential properties
- Investment/rental residential properties
- Condominiums
- Leasehold Properties
- Rural agricultural properties (farms)
- Mobile Homes (deregistered)
Properties that don’t qualify
- Multi zoned properties
- Residential properties in Corporate names (Hold Co/PREC)
- Greater than 6 units
- Commercial zoned properties
FCT Fee
- The client will be responsible for paying the FCT fees as outlined below and the fees will be deducted from the mortgage proceeds
- Coast Capital Savings will pay $500 towards legal fees for Insured (CMHC/Sagen) files only
- Coast Capital Savings will still pay the $1000 Help Extra incentive to help offset this cost for mortgages that qualify
- Review the Fee Disclose Schedule below with your client
FCT Fee Schedule
Full Service Fee: $559.15
Program fee includes:
|
|
|
*FCT requires four (4) business hours’ notice or a $45 cancellation fee will be charged to CCS. If the file is cancelled after the FCT Signing Appointment a Cancellation fee of $100 plus taxes applies. A remote signing fee will apply if you will be signing the mortgage documentation in a location other than a Coast Capital Savings branch. An additional search fee applies if the signing of the documentation does not occur prior to the expiry date of the commitment (expiry date is 30 days after the completion of the title search) All stated fees are inclusive of all applicable taxes.
|
NOTE: To keep the costs down, we will be insuring all mortgages up to $1,000,000 unless otherwise specified by the Broker
For Insured amounts over $1,000,000.00, an additional premium applies.
|
INSURED AMOUNT |
ADDITIONAL PREMIUM* |
|
$1,000,000.01 to less than or equal to $1,500,000.00 |
$250.00 |
|
$1,500,000.01 to less than or equal to $2,000,000.00 |
$350.00 |
|
$2,000,000.00 to less than or equal to $5,000,000.00 |
$750.00 |
|
$5,000,000.01 and Over |
$750.00 plus $0.65 per $1000 over $5,000,000.01 |
Any additional fees will be indicated in the total amount shown on the Commitment to Insure and be added to the program fee. The fees noted above apply to transactions associated with this program. For additional services, not part of the program, please contact us.
Submitting the Mortgage Application to Coast Capital
Is this a Rush application? FCT requires at least 13 Business days from the day the file is submitted onto the portal to the date of closing.
**Scotia Bank Transfer- have the client arrange to put the mortgage into an open term if it is a rush deal or Scotia will auto renew into a fixed term
Pull a title search on the property to confirm:
- The legal names on the application are consistent with the way they appear on title
- Add the FCT fee to the mortgage amount
- Include a comment in your submission notes, “FCT Refinance Program”
Documents Required
In addition to the minimum document package:
https://www.coastcapitalsavings.com/brokers/documentation-guidelines
We will also need the following documents:
- Title search for subject property
- Current home fire insurance binder for subject property
- Current Mortgage Statement
- Statements for any debts to be paid out and payout statement for any unsecured Loans
- RSA Forms
Builder Finance is a team of commercial real estate lenders focused on helping local builders grow their communities. The team at Coast Capital provides financing for the construction and sale of single family homes, as well as small multi-family projects (up to 4 units).
The Builder Finance program is best suited to home builders with the following qualities:
- Experience: They need to have a good track record and build homes for a living. Also, have a resume of similar size projects and are familiar with the municipality in which they are building.
- Cash Flow: They should have meaningful net worth and access to cash outside of this project, relative to the loan request. And must be able to inject additional cash should any delays or cost overruns occur.
- Business Skills: They will need to provide accountant prepared financial statements and prepare a detailed budget in Excel. A company website would be an asset.
The Construction Facility is structured as follows:
- Maximum Loan to Cost: 75%
- Pricing: Prime + 2% (subject to standard lending/ qualifying criteria)
- Set up Fee: 1%
- Term: 18 months
There is an initial advance against the Land, based on the land value and equity required. We also advance the set-up fee and interest reserve from the loan at the time of the initial advance. All subsequent advances will be on a percentage complete basis, using an appraiser’s progress report.
In order to review a potential loan application we require the following documents:
- Purchase and Sale Agreement (or Buyer’s Statement of Adjustments where the land is already purchased).
- Detailed Budget for the project broken into land, hard costs, soft costs, and contingency.
- Ownership Structure: An org chart or clear summary of the ownership for the project.
- Personal Net Worth Statements (template available) with any supporting documentation (bank statements, BC Assessments, etc.) for all guarantors/principals of the deal.
- Resume: A summary of the builder’s history (include addresses, budget, sale price, and project description).
- Appraisal of the project and as-is value of the land.
The remaining documents will be required prior to submitting the full application for approval: - 2 years of Financial Statements for those who build under a company name.
- 2 years of T1 General Tax Returns for the individual involved in the project.
- Evidence that they are an HPO approved builder and registered with WCB.
- Environmental Questionnaire (template available) completed to the satisfaction of Coast Capital.
- Central Securities Registrar for the company.
- Other information as required.
Primary Lending Areas:
- Metro Vancouver
- Fraser Valley up to and including Chilliwack
- Kelowna including West Kelowna and Lake Country
Email your deal packages or inquiries to the group inbox at
The following are some examples of applications that can be referred to our Small Business Team:
- Holding Company Applications
- Operating Company Applications
- Rental portfolios in excess of 4 rental properties
- Commercial zoned property mortgages up to $750K
Rate Premium:
50 bps min on residential property
100 bps min on commercial property
Fees:
Min .25 to 1% depending on overall application
Broker Compensation:
Here is a link to the compensation schedule
Documents Required: (will vary depending on application)
- Personal income documentation
- Accountant prepared 2 years Business Financial Statements
Estimated Turn around times:
10 business days depending on overall application
How to submit an application to Small Business:
- Submit the application using Filogix/Velocity or applicable other platform and note in your comments, Refer to Small Business
- Email the documents to brokercentre@coastcapitalsavings.com and note in your email, Refer to Small Business
Questions:
Email questions to Brokerrelationsmanager@coastcapitalsavings.com