Mortgage/Loans and Brokers:

How do I know if I can afford a home? Where do I start?
You can start by consulting a knowledgeable mortgage broker. They will be able to provide you with all the necessary information to start your home buying process. The main point to consider is to look at the ratio of your annual household income and the expenses you have or will have once you've purchased a home; You should also see how much of a down payment you are able to put down.

How do I know in what price range of a house I can afford?
In general how much of a home you can afford is calculated by your annual household income. It is often 3 times more than your annual income

Why go to a mortgage broker instead of contacting the banks directly?
There are many incentives as to why you should go to a mortgage broker. Here are some key reasons:
1. With an independent mortgage broker you are certain to get the best deal. They will act as your agent in shopping around for the best mortgage rate that will meet your qualifications. This saves you much time and worry.

2. They will do the credit check for you. A one hit on your credit history, where as if you were to do the shopping around each time you go to a different bank there will be yet another hit on your credit. Most people don't realize, that every time a credit check is done, you are LOSING points.

3. By consulting a mortgage broker you will become aware of any difficulties ahead of time, which will allow you to rectify the matter if need be before applying for a mortgage/loan.

What are the differences between a fixed and an adjustable rate?
Fixed rates: Is often based on a period of 5,10, 20 years. It' is, therefore, long term and provides you with more stability. Your monthly payments remain the same for the entire agreed duration.
Adjustable rates: This type of rate is often short term; it essentially depends on the prime rate. Your monthly payments, therefore, fluctuates depending on the prime rates.

How do I know which kind of mortgage is best for me?
The best way to determine what mortgage will best suit you is to consult with experienced mortgage broker. Short term/ adjustable rates offer better rates, but longer term/fixed rates will provide the safety and comfort of an extended period of guaranteed payments
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Application:

What documents are required from me in order to approve for a mortgage?
1. Employment Letter- annual income, and number of years with your employer

2. Proof of down payment-Bank statements for the last 3 months, any investment statements, gift letters (if a gift is being give to you towards the purchase of your new home)

3. Mortgage application

What does it cost to submit a loan/mortgage application?
For qualified clients there's absolutely NO cost when you consult a mortgage broker.

Do I need to pick the property I want to buy, before I submit an application?
No, it's not necessary. Generally a pre-approval is obtained to determine the maximum purchase price that you can afford before you meet with a real estate agent. This also permits you to narrow down your search of a new home.

What happens after I submit my application? How long will the whole process take?
Upon the completion of your application and providing that ALL necessary documents are available to us, your application will be forwarded to the chosen bank. It will take between 4 to 24 hours to get back to you with the results.
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Pre-approval:

What info. Is required for a pre-approval?
The following information should be available when consulting with us for your pre-approval:
Your job description: annual income, and number of years with your employer
If you are self employed, your income based on your last 3 years Notices of Assessment

In addition, you will need your:
Social insurance number,
3 years residence history, if applicable
Banking information including your assets and liabilities (cash, stocks, bonds, cars, RRSP's, loans, credit cards, line of credit etc.)
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Credit Concerns:

How much will my credit history affect my ability to get a mortgage?
We have helped many families obtain home mortgage loans that have credit problems in the past or present. Good news is that there are home loan programs for individuals with bankruptcies and other credit problems.
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Down payment:

What's the minimum down payment I can use?
If you are purchasing a house valued between $125,000 and $300,000, the minimum down payment allowed is 5%.
If you are purchasing a housed valued from $300,000 and up than you are required to put down a minimum of 10%.
Please note that the down payment must come from personal savings, assets or an outright gift from a family member.

How does my payment schedule affect my mortgage?
Your payment schedule can have a great impact on your overall mortgage. Consider the following example- with a $200,000 mortgage at 6.0%, for a five-year term:
Weekly payments of $319.90 will leave a balance at the end of the term of $172,064.90
Bi-weekly payments of $639.81 will leave a balance at the end the of term of $172,119.38
Monthly payments of $1,279.61 will leave a balance at the end of the term of $179,673.41
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Closings:

What costs should I anticipate for my closing?
Other than the down payment, you will have to pay certain closing costs. We suggest that you set aside 1.5% of the final purchase price to cover the following expenses:

1. Legal Fees and Disbursements
2. Land Transfer Tax
3. Prepaid Expenses: If the vendor has prepaid any house expenses for the entire year (i.e. utilities, property taxes, etc.), they must be compensated
4. Property Tax Hold Back: If the lender is collecting and paying the property taxes, you may be required to pay the lender an amount sufficient to cover the next installment of property taxes when due

What is CMHC? How much should I expect to pay towards it?
CMHC (Canada Mortgage and Housing Corporation) is insurance to secure your mortgage for the banks. You are required to get CMHC if your down payment is under 25%. The amount of CMHC will be added on to your mortgage. Your monthly mortgage payments will reflect the amount.
The insurance premiums differ according to the percentage of your down payment. See the following table:

Percentage of your down payment:      Percentage of expected CMHC:
5%                                               3.25%
10%                                             2.0%
15%                                             1.75%
20%                                             1.0%
25%                                             0%
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