Concentra Financial has re-launched its subprime “Vision Mortgage.”
Prior to Tuesday, it was off the market since December 2008.
“Our decision to temporarily suspend the program was in response to the economic conditions at the time and risk management practices needed to reduce credit risks,” said Jane Kulbida, AVP Residential Mortgages at Concentra.
“Market conditions have since improved and appear to be stabilized. Concentra is emerging from the economic crisis in a very strong position and we are, therefore, able to expand our credit risk tolerances to once again include this important program.”
Here are some of the Vision Mortgage’s lending guidelines…
- Maximum LTV: 75% (Purchases) and 65% (Refinances). A sliding scale applies.
- Terms: 1-5 year closed. No variables.
- Amortization: 25 years maximum
- Income: Must be verified. No stated income.
- Minimum Beacon: 540 (Concentra also uses their own “internal” scoring model)
- Debt Ratios: 45% maximum TDS
- Derogatories: Ex-bankrupts allowed with 1-year discharge and re-established credit. No outstanding consumer proposals.
- Property: No apartment condos, rentals, recreational, or acreage allowed.
- Fee: 1% (This is the same standard fee Concentra charged in the past)
- Lending Area: All provinces except Quebec
In terms of a target market, Kulbida says, “I think this product will serve many clients. Particularly those that have satisfactorily explained credit issues and need assistance getting their financial affairs back in order.”
“We allow a Total Debt Service ratio up to 45% and the interest rates are reasonable. This is a true sub-prime product, not an Alt. A product.”