Cash Out Refinance
Cash Out Refinance Introduced to Canadians by Genworth, this program enables borrowers to take equity out of their homes for a variety of purposes, including asset enhancement, debt consolidation, combining a first and second mortgage, or renovations.
Acceptable loan purpose
- Refinance transactions for repayment of existing financing, debt consolidation, renovation & asset enhancement (this product replaces all other refinance products)
- Renovation loans with multiple advances are acceptable; up to four advances managed by lender
Equity removal limits
- We limit equity removal to $200,000 (except when the loan purpose is to consolidate existing first and second mortgages, in which case the maximum LTV ratios will apply)
- 0.01-90% LTV; equity removal is limited to $150,000
Loan-to-value ratio limits
'Loan-to-value' (LTV) is the relationship between the principal balance of a mortgage and the property value. For example, if you have a house valued at $100,000 with a $90,000 loan, you have a 90% LTV ($90,000 divided by $100,000 = 90%).
- 1 2 units: 90% LTV
- 3 4 units: 90% LTV
- Secondary Homes: 90% LTV
Eligible properties
-
Owner Occupied:
- Maximum four units with at least one unit occupied as the principal residence
- Existing properties (not for new construction)
-
Secondary Homes:
- Maximum 2 units
- Maximum 90% LTV
Terms/qualifying interest rates
- Fixed, standard variable, capped variable and adjustable rate mortgages are permitted
- Qualifying interest rate: the contract rate or the three year rate if the term is less than three years
Coverage
Amortization options
- LTV > 80%: Up to 35 years
- LTV ≤ 80%: Up to 40 years
- If a full premium is paid on the entire mortgage the amortization can be up to 35 years (i.e., currently uninsured conventional mortgages)
- Home owner can keep the same amortization remaining on the existing mortgage
- Blended amortization (based on a weighted average of the original
mortgage amortization and up to 35 years for the increased mortgage
amount).
Premium rates*
- The new premium payable will be the lesser of the premium as a % of the total new loan amount or the premium as a % of the top-up portion from the current loan amount
| The Lesser of Premium as a % of |
| LTV Ratio |
Recommended
Credit Score |
Single Advance |
Top-up Premiums |
| 85.01% - 90% |
660 |
2.00 % |
4.25 % |
| 80.01% - 85% |
620 |
1.75 % |
3.50 % |
| 75.01% - 80% |
620 |
1.00 % |
2.75 % |
| 65.01% - 75% |
620 |
0.65 % |
2.25 % |
| Up to 65% |
620 |
0.50 % |
0.50 % |
Premium is non-refundable.
*A 0.20% premium surcharge will be applied to the above premium rates for every 5 years of amortization beyond the traditional 25-year mortgage amortization period.
Borrower qualification
- A minimum credit bureau score of 620, (excluding applications on currently insured Genworth mortgages which are reviewed on a case by case basis)
- A minimum credit bureau score of 700 is required for 95% LTV
- No prior bankruptcy or judgements
- No R3's in the past 24 months
- Mortgage is assumable
- Non-residing guarantors are not permitted. Non-residing co-borrowers are acceptable (must be an immediate family member and on title).
- All other existing requirements related to income and credit worthiness apply
- Maximum debt servicing ratios of 35/42.
| GDS/TDS Guidelines |
| Bureau Score |
GDS |
TDS |
| 680+ |
No limit |
44% |
| 600 - 679 |
35% |
42% |
Documentation/information requirements
- Employment and income verification required upon request
-
To improve turn-around time please include the following in the comments section:
- Existing Genworth reference number (if applicable)
- Amount of new money being advanced
- Outstanding balance of existing mortgage
Eligible Products
- Alt A
- CreditAssist
- First Mortgage Owner Occupied 1 and 2 units
- First Mortgage Owner Occupied 3 and 4 units
- Extended amortizations up to 40 years
- HELOC
- Secondary homes (Type A)
- Investment Property Program
Ineligible Products
- Cash-back Equity
- Family Plan
- Insured Progress Advance
- New To Canada
- Purchase Plus
- Vacation homes (Type B)
The insurance premium is paid once at the time of closing . The insurance premium is not refundable and may be added onto the mortgage
