As the credit crisis fades further from memory, prime lenders continue to slowly loosen up their uninsured equity lending guidelines.

Prime equity lending (as opposed to subprime equity lending) is designed for people with good credit and lots of equity, who either:

a) have income that is harder to substantiate; or,

b) prefer an easy streamlined approval process.

In either case, approval requires little or no income validation.

Here’s a rundown of recent equity lending changes at BMO, ING Direct, and Street Capital.

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BMO’s Uninsured Stated Income Program

• Maximum loan-to-value: 65%
• Offered to self-employed applicants only
• Must be in business for less than three years
• Must have satisfactory credit.
• Full appraisal required

BMO recently re-launched this product after having been out of the conventional stated income game for the past few years. It was one of the only big banks without an uninsured stated program.

Katie Archdekin, Senior Manager BMO Home Financing, says it was a suitable time to re-introduce the product.

“This segment has experienced significant growth in the past few years, and we felt that there was a growing need for a product that offered the customized solutions required to serve this unique customer base,” she said.

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ING Direct’s Express Income Qualifier

Recent changes:

• Salaried income is now accepted as well as self-employed and commission income
• An NOA is no longer required
• The minimum Beacon score is now 680 versus 700 previously
• The maximum loan amount has been raised to $1 million in the GTA, Vancouver, and Victoria
• A minimum net worth is no longer required
• A 50% LTV option (EIQ 50) has been added with a 650 minimum Beacon requirement

No rate premiums apply, making this a solid product all around. Hopefully ING also offers this program with its much anticipated upcoming HELOC (expected later this year).

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Street Capital’s Equity Product

Recent changes:

• Maximum LTV increased from 65% to 75% for BFS purchase applications with 700+ Beacons. Not applicable to secondary homes.
• Lender fees have been eliminated for salaried applicants.

In addition to allowing BFS, contract and part-time income, Street lends up to 65% LTV for salaried applicants with a 650+ credit score.

An NOA must be provided in all cases, which some brokers feel defeats the purpose of an “equity” program—even if the NOA is only used to confirm no taxes owing.

(Prior related story: Street Capital to Launch Equity Mortgage)

Other conditions apply to the above programs. Speak with a mortgage planner or lender representative for more information.

Rob McLister, CMT

Last modified: April 29, 2014