Classification - PUBLIC Page 1 of 3 Regional Head Office 319 McRae Avenue, 2nd Floor, Ottawa, Ontario, K1Z 0B9 Tel: 613-560-0100 Toll Free 1-877-560-0100 Fax 613-560-0194 alterna.ca Brokered Services Rate Sheet Interest Rates Effective October 21, 2020
Alterna Prime Rate – 2.45% All submissions must include full package, including but not limited to; recent job letter showing continuous employment, paystub, and proof of deposit of pay. Maximum debt servicing TDS 42% GDS 35%. Applications will not be accepted without proper documentation. Should you have any questions, please contact Steve Daigle for further information. High Ratio Insured Purchases and Switches (Minimum Beacon Score >= 700) Term (In Years) Rate Bps 5 year closed New Submissions Only-Full Package Upfront - Alterna Savings Only 1.69% 115 3 year closed New Submissions Only-Full Package Upfront - Alterna Savings Only 1.89% 115
Insurable Conventional Purchases and Switches (Minimum Beacon Score >= 700) Term (In Years) – New Submissions Only Rate Bps 5 year closed Full Package Upfront - Alterna Savings Only 1.89% 115
Uninsurable Conventional Purchases, Switches and Refinances (Minimum Beacon Score >= 700) Term (In Years) Rate Bps 5 year closed New Submissions Only-Full Package Upfront - Alterna Savings Only 1.99% 90 4 year closed 2.04% 60 3 year closed 2.04% 45 2 year closed 2.04% 30 1 year closed 2.04% 15 5 year variable closed (Prime +1.20%) 3.65% 90
* Rentals are subject to .25% premium over the Uninsured Rates and a Maximum amortization of 25 years, and a 10bps reduction in commission on best rates.
Secured Line of Credit Alterna Prime Rate + 1.00%
**Rates are subject to change without notice. Rate sheet is issued subject to errors and omissions. Terms and Conditions • All deals are qualified under stress testing guidelines for OSFI • Funds available for New Business only and must close in 120 days • Closing dates will be scheduled 10 days after receipt of all documents requested in our approval letter • Alterna Savings supports MPC’s Origination Standards for Fraud Avoidance • No pre-approvals at this time *For more information, please refer to the Brokered Services General Lending Guidelines
Classification - PUBLIC Page 2 of 3 Regional Head Office 319 McRae Avenue, 2nd Floor, Ottawa, Ontario, K1Z 0B9 Tel: 613-560-0100 Toll Free 1-877-560-0100 Fax 613-560-0194 alterna.ca
IMPORTANT NOTICE TO BROKERS NEW SUBMISSION REQUIREMENTS - PLEASE READ CAREFULLY
To improve efficiency and service levels to you, effective immediately, Alterna will require full document packages with submissions. If documents are not submitted with the deal by uploading through Exchange on Filogix or by emailing [email protected] the deal will be declined back to you. You may resubmit at a later date however, rates will not be held, and new rates will apply. Full document packages should include, but are not limited to: • Down payment plus 1.5% for closing costs - 3 months history and confirmation of account ownership Gifted funds - noted as gifted on submission Copy of deposit made with offer with corresponding 3 months history • Debt servicing requirements: Minimum beacon of 700, Maximum TDS 42% and GDS 35% • Income - 2 years full T1 Generals & Notices of Assessment (no summaries/condensed versions) for all hourly, part time, BFS, commission, contract or other varying employment, salaried applicants employed at current position for less than 1-year, salaried applicants using bonus income or other income components and rental income. Employed applicants will also need a letter of employment, paystub dated within 30 days and bank statement showing deposit of pay. Salaried Individuals: Letter of employment, recent paystub (dated within 30 days) bank statement showing deposit of pay. No probation. Employed at least 1 year in current position • Final signed separation agreements • For all previous Bankruptcies and Consumer Proposals, we require full disclosure and all documentation with submission including list of creditors/discharge etc. (we will not consider multiple bankrupts). Bankruptcy discharge document and statement of affairs (list of creditors) etc. Multiple bankruptcies are not acceptable. Real estate must not have been included in bankruptcy. • Full signed and accepted purchase agreements including all schedules and amendments (waivers when available) • MLS sheet • Condos are required to be registered prior to submission. Provide the condo corporation number. • For equity take outs please provide: clear and detailed notes about use of funds, quotes for renovations, contracts etc. • Mortgage Statements, property tax bills with confirmation of payment, leases, tax returns evidencing rental property income, renewal statements. • Spousal information is required regardless if they will be on title, please pull a CB and submit with the file. Include detailed notes as to why the spouse is not on title. Include full name, DOB, debts, etc. • For ALL Refinances and Switches applications MUST be submitted a minimum of 12 business days prior to the anticipated closing date. Please include the Payout Penalty amount and Maturity date.
Classification - PUBLIC Page 3 of 3
IMPORTANT NOTICE TO BROKERS NEW SUBMISSION REQUIREMENTS - PLEASE READ CAREFULLY When approval letters are issued sign back will be required within 5 business days. The file will be cancelled if sign back is not received by the commitment expiry date. If you are aware that this will be an issue, please advise your underwriter to ensure deal is not cancelled.
Please ensure to input your clients correct email address(s) on filogix when submitting your deal. This is a requirement on solicitor files for the Esign process. A unique email address is required for each applicant.
Any questions about these changes please reach out to your representative Steve Daigle. Thank you for the business and your continued support.
Business Development Officers Contact Information
Steve Daigle Ottawa, Gatineau, Kingston, North Bay, Pembroke, and GTA T. 613.608.1484 O. 613.560.0150 x6502 [email protected]
Head Office 319 McRae Avenue Ottawa, On K1Z 0B9
Business Development Office- Brokered Mortgages
General Lending Principles
All applicants are required to be permanent residents of Canada and live and work in Ontario. We currently lend in major populated areas of Ontario with populations of 30, 000 or more.
For deals funded through Alterna Savings, all applicants are required to become an individual member of the Credit Union. This involves opening a membership and purchasing one share - $15.00. The membership application and mortgage documents must be completed prior to funding.
• Alterna documents can be signed via E-sign when a lawyer is handling the transaction or FCT remote signing for switches. • Guarantors will not be permitted at this time. • An application which requires a 2nd mortgage behind the requested 1st Alterna mortgage will not be considered at this time. • Mortgages in 2nd position behind another lender will not be considered at this time. • New to Canada program- are required to be default insured (client paid premium). • Minimum of one year of continuous work history required for conventional applications. • Two years of continuous employment is required for non-salaried, BFS, professionals for insured submissions. • Blend and Extends are possible for existing Alterna clients, brokers get paid on new funds advanced. • Appraisal, application and switch fees are the responsibility of the client. • For all Switches and Refinances, the Payout Penalty must be provided with the application.
Credit Bureaus
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A current credit report is required for all applicants, including consenting spouse, no older than 30 days. Please note Alterna will pull a credit report at the time of instruction. New debt or declining scores can affect mortgage approvals. Advise your clients accordingly. Any mortgage delinquencies appearing on the credit report will result in a decline. If your client has extenuating circumstances that resulted in mortgage arrears please contact your BDO to determine if an exception can be made.
Previous Bankrupt applications can be considered for refinances, purchases and switches. The application will not be considered if mortgages have been included in the bankruptcy or write off history with Alterna exists. Clean re-established credit history and trades are necessary. List of creditors may be requested by the UW.
Consenting spouses and the matrimonial home
All applications where the applicant is legally married and the subject property is the matrimonial home will require the full spousal information to be supplied at time of submission. Consent for a credit check is required. Full name, DOB and SIN are to be included in your submission notes. Speak with your BDO for more information.
Loan to Value and Sliding Scale for Major Urban Centers
• Maximum mortgage considered on an owner occupied home in a major urban center is $1,500,000.00 (higher rates may apply see rate sheets). • Minimum mortgage submission is $50,000.00.
Conventional Owner occupied- Single/Multi Family
• House has minimum 800 square feet, maximum LTV is 80% of purchase price or appraised value (whichever is lower). Less than 800 square fee must be default insured (client paid premium). • Value is over $1,000,000 max LTV is 80% of first $1,000,000 and 50% of the remainder.
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Conventional Owner occupied Condo Apartment
• Minimum 500 sq. ft.- less than 500 Sq ft. must be default insured (client paid premium). • 80% of value up to $1,000,000 (purchase price or appraised value, lesser of the two) if beacon is 700+. • 75% of value up to $1,000,000 (purchase price or appraised value, lesser of the two) if beacon is =>650.
*Master certificate of insurance is required, along with estoppel/status certificate required
*For new condo builds we require the condo registration number at time of submission for application to be processed.
Conventional Non-Owner Occupied – Single/Multi Family/Condo Apartment
• 70% maximum loan to value of the lessor of purchase price or appraised value up to $1,000,000. • Properties over $1,000,000 – Max LTV is 60% of first $500,000 and 50% of amount over $500,000. • Full appraisal- no exceptions. • Maximum total properties owned cannot exceed 5 doors including primary residence/secondary residences. • DSCR will be calculated by the UW and must meet 1.10. • Real Estate Schedule must be completed and submitted with application when multiple properties are owned. • An assignment of rents is mandatory for each rental property. • Minimum beacon score of 680. • Minimum liquid net worth of $100,000 required. • For Non Urban Centers/rural please contact your BDO.
Eligible properties
• Up to 4 units • Zoned residential
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• Appraisals (mandatory unless high ratio/low ratio insured) will be based on max of 5 acres and no outbuildings • Condo fee mitigation if LTV is >55% and condo fee is 45% of monthly principal, interest, taxes & heat must be default insured (client paid premium)
Ineligible Properties
• Co-ops • Leasehold residential properties • Fractional interests • Rental pools • Floating homes
Life lease properties
• Boarding homes/rooming houses • Heritage homes • Log homes • Water access only • Multiple use property • Working farms • Former grow-ops (no exceptions, whether remediated or not) • Raw land • Residential homes with more than 4 units (referred to commercial when 5+ units)
Appraisals
Brokers can order their own appraisal through Brookfield upon receipt of approval letter from the UW. Appraisal must be directed to the correct funding company, either Alterna Savings or Alterna Bank and directed to your underwriter. For COF/RUSH requests where appraisal is being ordered upon deal submission please contact your BDO. Guidelines/instructions are available.
Income
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BFS- sole proprietor/partnership, commission, rental income, tips, bonuses and overtime
• The average of the previous 2 full years of full tax returns, including all schedules, and accompanying Notice of Assessments (NOA’s) will be used. *Income used from various sources should be included only when it is typical and reasonable and expected to continue. • Self-employed income can be grossed up by 15% - line 150 (not available for corporations). • An alternative to the gross up is to add back non-cash expenses such as capital cost allowance, depreciation and business use of home to net business income. (To be supported by statement of business activities as part of the T1 General). • Incorporated individuals would use 2-year average of line 150 of their NOA’s, accompanying T1 Generals required.
Professionals- dentists, lawyers, doctors, accountants etc.
• The average of the previous 2 full years of full tax returns, including all schedules, and accompanying Notice of Assessments (NOA’s) will be used.
*Financial statements for 1 year may be requested if available.
Salaried Employees
• Recent paystub no older than 30 days from application/funding required- must equal amount stated. • Bank statement reflecting the payroll deposit of pay will be required. • Letter of employment (must state tenure, employment status, annual income and guaranteed hours (will be verified).
Non –Salaried/hourly employees
• Recent paystub no older than 30 days from application/funding required- to equal amount stated. • Bank statement reflecting the payroll deposit of pay will be required.
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• Letter of employment (must state tenure, employment status, hourly rate hours - will be verified). • The average of the previous 2 full years of full tax returns, including all schedules, and accompanying Notice of Assessments (NOA’s) will be used.
Maternity Leave
• Letter of employment is required indicating return to work date, position they are returning to, salary upon return. Confirmation is required – will allow 100% of income upon verification.
Alimony/Child support
• Copy of formal Separation agreement. • Payments may be included as income where it is demonstrated that such payments have been fully and regularly received and are expected to continue on a regular basis. • 2 full years of tax returns/NOA’s.
Rental Income
• Schedule of Real Estate required. • If property owned for more than 1 year, latest T1 General including rental schedules, supported by the accompanying NOA-indicating taxes are current and lease agreements. • If property owned for less than 1 year, copy of lease required and or letter of opinion from accredited appraiser. • If subject property is rental, 100% of rental income added to your submission.
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• If rental properties are not the subject property, upon completion of the schedule of real estate –the net surplus can be added to the borrower’s income. Net shortfall to be added as a liability. • Units must be legal and conform to municipal zoning bylaws.
TDS Calculations
• Credit cards- minimum of 3% of balance or declared payments reflected on CB if higher (if credit cards are being paid to zero but remaining open, 3% of balance as per credit report will be used in TDS calculation). • Deferred store cards amortized over 3 years. • Student debt, amortize over 10 years at prime + 3% if payments have not yet started. • Lines of credit, 3% of balance outstanding (loc not at Alterna). • Equity line of credit payment – street rate amortized over 25 yrs. Will be included in GDS if secured by primary residence. • Support payments/alimony payments. • Loans/Leases. • Deficiency in rental homes as per schedule. • Any other fixed obligations. • Rate Buy Down- available upon approval, cost of buy down is calculated on each deal at time of submission, please include request in your submission notes. Max of 10 bps buy down.
Purchase + improvements
• Max of $40,000 permitted, following high ratio program guidelines, premiums paid by borrower for high ratio or conventional. Speak with BDO for further details.
Bridge Financing
• Max of $500,000 (no exceptions). • Max of 120 days. • Include request in your submission notes. Firm purchase and sale agreements required. • Mortgage statement and current tax bill required for home being sold.
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• $190 fee, rate is 6.8% (subject to change).
Down payment
• 3 months of most recent statements must be provided showing client name and account number (Savings/TFSA’s/RRSP’s/Bonds/Stocks etc.) Funds must be present in bank account. • Source of large deposits must be verified. • Funds are required to be from own resources and without being borrowed. • Gift letter is required when funds are gifted from immediate relative stating amount of gift, relationship and that the funds are non-repayable and donor has no interest in the property. Alterna gift letter is available. The letter will be called and verified. • Verification that funds are on deposit is also required prior to funding. • Closing costs of 1.5% of purchase price must be verified for high ratio files. • Proceeds from sale of existing property being used for down payment requires the firm and unconditional sale agreement, recent mortgage statements, property tax bill are required.
**real estate commissions, solicitor fees and other costs to be considered for calculation of net proceeds.
Insurance
• Property Insurance is mandatory for all purchases, refinances and switches. Full replacement value of the property and Alterna must be named as loss payee. For condo properties, Master Certificate of Insurance is required. When upgrades have been done to the unit that would not be covered by the Master Certificate of Insurance for the condo corporation, evidence of contents/condo insurance may be required. • Title insurance is mandatory.
Fees
• Alterna does not cover fees. Please see below for miscellaneous items.
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• FCT transfer fees are approx. $300. • Refinance fees through FCT start at approx. $550. Refinances must go through a lawyer when consumer debt or is otherwise indicated by the UW. • If a deal is cancelled after we have been requested to proceed with obtaining FCT/payout documents/transfer documents, all cancellation fees issued by FCT are the responsibility of the broker. • Appraisal fees are paid directly to Brookfield. • Bridge fee is $190.00. • Document Redo- If the file has been instructed and new documents are required, there is a $250.00 administration fee. • AVM fees if applicable are $45.20 and are required to be paid in advance via cheque. Please mail a cheque, payable to Alterna, to your UW.
Property Taxes
Property taxes are required to be up to date at time of funding. We do not require property taxes to be paid with the mortgage and encourage clients to pay their taxes directly with the city.
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