Frequently Asked Questions

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.



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.



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.



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.



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.



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.



What is a

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.



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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Just as an insurance broker finds you the best deal on insurance, a mortgage broker finds you the best deal on mortgage.

Stacy Bell-Powell

Suite #102
2016 Sherwood Drive
Sherwood Park AB Canada
T8A 3X3

p: 780.995.7099
t: 866.995.7099
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