What is a fixed rate mortgage?

The interest rate on a fixed-rate mortgage is set for a pre-determined term. This offers the security of knowing what you will be paying for the entire length of your term.

What is a variable rate mortgage?

The rate on the mortgage will fluctuate month to month depending on the prime rate. If prime rate goes up so does your payment. It is risky but if you’re good at watching your rates, this could be a great money-saving opportunity.

What can a mortgage broker do for me that a bank can’t?

With just one application and one credit check, we can get you access to choices among our 90+ lenders! Applying bank from bank is a difficult and time-consuming process, why search one by one when you can apply to them all? Mortgage brokers search the market to best suite your financial needs. Remember: we don’t work for the lenders, we work for you!

What is a down payment?

Usually, no one has the money available to buy a house out right, so the first step is to go to a bank and get a loan. However, rarely any banks will give you a loan unless you have some of your own money to contribute. A down payment is paid to the seller to secure the house. It is deducted from the purchase price of the home and whatever is left over should be covered by the bank.

If I get pre-approved, does that mean I am secured in getting the loan?

A pre-approval can mean nothing depending on the lender. However, if you have a good broker handling your mortgage they can let you know immediately if you are going to be approved or not. A mortgage broker should be able to understand what and how an underwriter will think about an application.

How much down payment do I need to put down?

The minimum amount to be put on a down payment is 5%. However, you must also be able to show that you can cover the closing costs (usually 1.5%-3% of purchase price). If you can afford to put down more money with out straining wallet, we recommend putting more down. Not only will it take you less time to pay off your mortgage, but you will likely get a lower rate. As well, homebuyers who put down more than 20% down payment are not required to be insured by CMHC and you can have a longer amortization period which means more time to pay off your loan.

I got denied by a bank, what do I do now?

People often think that a denial from a bank means the end of your mortgage application process. However, this is the case where you see the benefits of hiring a mortgage broker:  If you get denied by one lender, there are a long line of other lenders waiting to review your application! When we get an application, we try our best to meet their financial goals.

What is Mortgage Loan Insurance?

A mortgage insurance is required for people who are buying a home with a down payment less than 20%. It is provided by the Canadian Mortgage and Housing Corporation and it insures the lenders from loans greater than 80% in cases where the borrower is unable to make payment to the loan and goes into default. Please note that this is not the same as a Mortgage Life Insurance.

I was previously bankrupt; will this affect my mortgage application?

If you are discharged from your bankruptcy, there are usually ways to still get a mortgage loan. There will likely be stricter conditions for your loan, however, it is not impossible to get a mortgage.

What are the monthly costs of owning a home?

Some of them, like taxes, may not be billed monthly, so do the calculations to break them down into monthly costs. Below you will find a list of these main expenses. Keep in mind that these expenses are also calculated when considering your mortgage loan to see if you will be able to afford these monthly payments with out straining yourself financially.

The Mortgage Payment : this depends on a few variables such as the mortgage amount, the rates and term. The amortization schedule should let you know how much you should expect to pay. As well, there are online calculators that can help you get an idea of how much you will be paying monthly.

Property Taxes: this is a tax paid to your municipality and be paid in two ways – remitted directly to the municipality by you through installments, or paid as part of your monthly mortgage payment.

Utilities: As a home owner, you’ll be responsible for all utility bills including heating, gas, electricity, water, telephone, internet and cable.

Insurance: Not everyone is required to have insurance for their house but it is always recommended. In case anything goes wrong with your source of funds, you can rely on the insurance company to assist you in paying off your house.

Can we make changes to the mortgage application, such as length of term, repayment frequency, etc. once the payment application has been submitted? 

Yes. Your ideal mortgage formula has probably already been created, but if you want to consider a change let’s review the possible benefits and implications.

Is GST paid on a resale home?

There is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.*

What is an IAD or interest adjustment date?

If your transaction is due to close in the middle of the month, but your regular mortgage payments are set for the start of the month, your first mortgage payment could be delayed for several weeks. To cover this, a date is set as the IAD and an amount is collected on closing to cover this Interest Adjustment Date period.

 

What is the difference between High Ratio Mortgage Insurance and Mortgage Life Insurance?

High Ratio Mortgage Insurance protects the lender against payment default by the home buyer. It is required by most lenders if the home buyer has less than 20% downpayment. An insurance premium will apply. Mortgage Life Insurance protects your dependents and loved ones in the event of your death.

When the mortgage lender pays the Property Taxes, how are payments calculated?

The estimated amount of your Property Taxes can be added to the mortgage payment and paid on your behalf at the appropriate times. Depending on the balance in your tax account, it may be necessary to increase or decrease the amount of monthly payments to reflect the timing of Property Tax payments.*

* Tax information consists of general comments only, for full details see the applicable legislation or review with your advisor.

 
I gave a deposit to my realtor. How does this go towards my down payment? 
 
Your lawyer will tell you to bring the down payment + any applicable closing fees check for the difference, and will inform you of the numbers regarding the deposit and whether a bank draft is necessary.