Home Trust has now added a high ratio bundle mortgage which allows borrowers to finance up to 90 percent of their home.
Bundle mortgages are basically an uninsured first mortgage with a typical 80 percent loan-to-value (LTV) with an additional second mortgage for the balance of the funds up to 90 percent.
The intended niche for their bundle is the consumer who cannot qualify for an insured mortgage for 90 percent LTV through normal channels such as CMHC. That will probably include self employed business owners with harder-to-document income. Another benefit to this new bundle is the minimum credit score required of 620 which is not overly high.
Instead having to pay Canada Mortgage and Housing Corporation (CMHC) insurance premiums of 2.4 percent, Home Trust is charging a lender fee of 2.5 percent that can added to the second mortgage therefore not becoming an addition closing cost expense.