Yesterday in a communication to brokers TD announced the following changes. According to TD these changes are implemented to comply with the recent regulatory requirement.
Changes in Equity Lending:
- For salaried customers TD will no longer accept Equity lending applications. TD lends money using the equity lending program to the clients (Self Employed, Contractors, New Immigrants etc.) who can not provide confirmation of stated income as per standard TD policy. Few months ago TD introduced income reasonability requirement for all stated income equity loans.
- All BFS (business for self) and new immigrant will be eligible for 65% loan to value only. Previously applicants who had credit (beacon) score above 720 were eligible for 75% loan to value ratio.
- TD will allow no exceptions to these policies.
- All BFS clients have to provide confirmation of business from October 31st onwards.
- Upto five years after entering to Canada a person can be considered as a new-immigrant.
Changes in Qualifying Rate:
All the applications submitted after October 31, 2012 will be subjected to new qualifying rate requirements.
- From now on – for any mortgage terms less than five years have to qualify for the greater of BOC posted 5 years rate or the actual rate.
- Fixed rate mortgages with terms equal to or greater than 5 years – the actual customer rate will be used as the qualifying rate
Changes in Rental Lending:
- The maximum LTV (Loan to Value )is now increased to 75% for Rental Property Mortgages – where there is an existing lease or tenant is there. It was 65% before.
- If there is no tenant in the property then Maximum 65% LTV applies.
- If it is a Purchase and the property is currently not rented, market rent can be used for qualification purposes. When market rent is used then the market rent assessment must be provided by the appraiser and included in the appraisal comments – no exceptions.
A broker or agent is no longer required to obtain a waiver of financing or home inspection for Purchase & Sale Agreement conditions prior to funding