Mortgage FAQs
Q. Why use a mortgage consultant as opposed to a bank?
Mortgage Consultants have access to numerous lenders with a multitude of products and services. We have options to suit your needs and you are in control of choosing them.
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Q. Are there any fees involved with a mortgage consultant?
A. In most instances, there are no fees involved. Mortgage consultants receive a commission from the lending institution that receives and funds your mortgage application. If you do not qualify due to poor credit, job instability or other unseen factors, there may be a brokerage fee, but it will be disclosed to you prior to proceeding.
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Q. Should I wait for my mortgage to mature?
A. No. Allow me to to begin shopping around for an interest rate at least 120 days before your mortgage matures. Most lenders will hold the interest rate in advance and may cover the costs to transfer your mortgage.
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Q. What is mortgage loan insurance?
A. Mortgage loan insurance is provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, Genworth and Canada Guaranty, approved private corporations. This insurance will protect the lenders against defaults on mortgages. The insurance premiums, are paid by the borrower and can be added directly into the mortgage amount. This is not the same as mortgage life insurance.
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Q. What is a conventional mortgage?
A. A conventional mortgage is where the down payment is equal to 20% or more of the purchase price; a loan to value of less than 80%; and does not normally require mortgage insurance.
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Q. What is a high-ratio mortgage?
A. A high-ratio mortgage is where the amount to be borrowed is greater than 80% of the purchase price or appraised value. High-ratio mortgages require mortgage loan insurance provided by either CMHC, Genworth or Canada Guaranty.
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Q. What can I use for a down payment?
A. If you are a First Time Home Buyer::
- Registered Retirement Savings Plans (RRSP's) may be used as a down payment up to a maximum of $25,000 and is not subject to income tax if repaid within 15 years
- Gift from immediate family
- Accumulated savings - 90 day history is required
- Sale of existing home
- Equity from other sources
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Q. What is the minimum down payment needed to buy a home?
A. A minimum down payment of 5% is usually required to purchase a home, but there are exceptions. Som lenders will provide a cashback to be used as the down payment; however, certain conditions and requirements will apply. Call for full details.Regardless of the down payment chosen you must be able to show that you can cover the applicable closing costs (Legal fees, appraisal fees and a survey certificate when appropriate).
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Q. How much can I afford to pay for a home?
Hhow much you can afford to buy a home is based on a wide range of household incomes and down payment categories and interest rate. Click here to go to our affordability calculator.
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Q. How does bankruptcy affect my ability to qualify for a mortgage?
A. Special products and programs are available - please contact us for details.
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Q. What do I need to bring to my initial consultation?
A. Income documents such as an employment letter, recent pay stubs and Canada Revenue Agency Notice of Assessments. If self Employed - 2 years company financials and 2 years personal Canada Revenue Agency Notice of Assessments.
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Q. What paperwork do I need to provide for approval of my application?
A. While documentation requirements can vary depending on your circumstances and the lender who will be doing the financing, the following lists the most commonly requested documents:
- Letter of employment
- Recent paystubs
- 2 years Canada Revenue Agency Notice of Assessments for self employed, commissioned or seasonal workers
- Proof of Down Payment
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