1.
What is the advantage to using a licensed
mortgage agent?
2. Is there any fee to use a Mortgage
Specialist?
3. What is mortgage loan insurance?
4. What are the costs of Mortgage Loan
Insurance?
5. What is the RRSP Home Buyer Plan?
6.
Can I still get a mortgage if my credit is
less than perfect?
7. What is a "cash-back"
mortgage?
8. What is a tax-adjustment?
What is the advantage to using a licensed
mortgage agent?
A
good mortgage professional will help you determine which
mortgage product best suits your individual needs. They
can also help find you the lender who has the best rates
and terms possible.
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Is
there any fee to use a Mortgage Broker?
If
your application fits standard lending criteria then there
is usually no mortgage agent fee involved. If your application
does not fit typical lending guidelines then any fees
that may be payable will be negotiated and documented
up front. There is never any fee for the initial consultation.
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What
is mortgage loan insurance?
If
you are purchasing a home and are borrowing more than
75% of the value of the property you will require Mortgage
Loan Insurance. The Bank Act does not permit lenders to
make loans over 75% without Mortgage Loan Insurance. Mortgage
Loan Insurance insures the lender against default from
the borrower and allows you to purchase a home with as
little as 5% down payment. In Canada there are currently
two insurers, you can be insured through either Genworth
Financial or CMHC (Canada Mortgage and Housing). Both
insurers provide a comparable service, with some subtle
differences at an identical cost.
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What
are the costs of Mortgage Loan Insurance?
There
are two costs associated with Mortgage Loan Insurance,
the Application Fee and the Insurance Premium.
Application
Fee
The current application or underwriting fee for both CMHC
and GE Mortgage Insurance is $165.00. This fee will be
paid for those qualified for a mortgage loan through this
site.
Insurance
Premium
The insurance premium is only paid once and is usually
added to the mortgage amount. The premium depends on the
amount of your downpayment and is based on a percentage
of your mortgage amount. The following table outlines
the fees.
| Mortgage
Loan Insurance Premiums |
| Down
Payment |
%
of mortgage amount |
| 5% |
2.75% |
| 10% |
2.00% |
| 15% |
1.75% |
| 20% |
1.00% |
| over
25% |
N/A |
**Increased
premiums may apply for extended amortizations, cash back
downpayments or construction financing. Contact one of
our brokers for details.**
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What
is the RRSP Home Buyer Plan?
The
Home Buyer Plan is a program which allows the first time
homebuyer the option to use RRSP funds for a downpayment
without having to pay tax on the used funds. Qualifying
applicants can withdraw up to $20,000 from their RRSP
to be used for the purchase of a qualifying home. For
all the details see http://www.ccra-adrc.gc.ca/E/pub/tg/rc4135eq/rc4135-01e.pdf.
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Can
I still get a mortgage if my credit is less than perfect?
Unfortunately
the answer to this one is 'It depends'. The amount of
downpayment you have will largely determine your chances
of being approved. The larger the down payment the more
likely your chances of approval. If you have any outstanding collections
or judgements against you then it is not likely that you
will be able to qualify.
Bankruptcy - Generally the minimum acceptable is two years
from the date of discharge with some re-established credit.
Most lenders would ideally like to see three years from
the date of discharge, but the key here is to see some
re-established credit.
Our mortgage specialists may be able to identify alternative
lenders that may be able to help you regardless of credit
or we may be able to help you begin to re-establish your
credit. Your best bet is to contact us directly to discuss
your situation.
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What
is a "cash-back" mortgage?
A
cash-back mortgage refers to a mortgage where the lender
will pay you cash after closing on the mortgage. You should
typically expect to pay a higher interest rate for a cash-back
mortgage.
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What
is a tax-adjustment?
Taxes
for the City are due in the middle of the year on June
30th. When you complete the purchase of your home the
tax adjustment reflects this fact. If you are moving in
before June 30 you will pay the taxes for the full year
on June 30 and receive a credit from the seller to reflect
the number of days taxes you paid on behalf of the seller.
If you are moving in after June 30, the seller will have
paid the taxes for the year, and accordingly you will
owe them the amount of taxes he paid on your behalf, which
is the number of days you lived in the property for the
year.
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