Remember the “good old days” when self-employed borrowers could readily obtain stated income mortgages to 80% loan-to-value? It could take years before those days return to the prime mortgage market, if ever.
But a few lenders still offer out-of-the-box solutions for business-for-self (BFS) clients, and B2B Bank is one of them. A few weeks ago it launched its “BFS Expanded” product, a unique mortgage for those who’ve been self-employed for at least two years, with bank statements to support their income.
“We’ve approved mortgages for a variety of BFS individuals/couples such as consultants, truck drivers, accountants and small business owners,” says B2B Bank’s Mary-Claude Tardif.
“What makes B2B Bank’s BFS Expanded program unique is that there are no mortgage insurance premiums on higher LTVs and no lender fees for applicants with [credit scores of 600 or more],” she says. B2B is also flexible on income confirmation, allowing bank statements instead of the two years of tax documents common with many lenders.
Some might mistake this as a non-income qualifying (NIQ) product and wonder how B2B gets away with 80% LTV. But as Tardif explains, “OSFI limits banks to 65% LTV on what they deem to be non-conforming products. The BFS Expanded program is not an NIQ product or non-conforming as per OSFI guidelines, as we are asking for a comprehensive alternative list of documentation to support the income.”
These are the income docs required:
A signed letter of attestation certifying the forecasted personal income for the next 12 months
Most recent 12 months’ business bank statements
Most recent NOA (only to confirm no tax arrears, B2B says)
Confirmation of 2 years in business (e.g., articles of incorporation, GST/HST registration or business licence)
Here are the mortgage’s main features:
Maximum LTV: 80% with a 680+ credit score
Min. Credit Score: 580
Max. Amortization: 35 years
Max. GDS/TDS: 35/42, or 39/44 for strong apps with a 680+ credit score
Optional lump prepayments: 15% once per year
Optional payment increase: 15% once per year
Max. Mortgage: $1 million
Max. Equity Take-out: $200,000 (over and above any consolidation of debt)
Lender fees: None if the credit score is 600+.
As for rates, B2B uses its posted rates as a base (e.g., 3.14% today on a 2-year fixed) and then discounts or adds a premium based on the deal specifics.
This uninsured product is also available on rental properties. Ask a broker or B2B rep if you need more details.