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Frequently Asked Questions

Hiring a mortgage broker is a good option if you are unfamiliar with the process involved in taking a mortgage and don’t want to spend a lot of time in understanding the nuances of this industry. The broker can advise you on how to go about getting the loan and he’ll give you a fair estimate of the charges that will be added by the lender. He can also point out any pitfalls in the fine print that you need to be wary of, which you wouldn’t find in any FAQ section.

An experienced mortgage broker can help you find the right lender for your needs quickly, and with minimum effort from your side. As he would already know many of the lenders, he will be able to negotiate a lower mortgage rate and easier terms.

A fixed rate means your mortgage will always have a pre-determined interest rate irrespective of the changes in the economic conditions. On the other hand, an adjustable rate can be changed by the lender whenever he feels that the economic conditions have changed.

If you are looking for stable monthly payments and do not want to be dealing with the uncertainty, it is advisable to go for a fixed rate mortgage. But if you have sufficient financial cushion to absorb any increase in your monthly payments, and if you feel that interest rates are likely to go lower in the near future, then an adjustable rate mortgage might be a better option for you.

Although these FAQ would have given you some idea about taking a mortgage, you should try to understand all these concepts in detail to make a sound decision. Take help of a mortgage broker or your financial adviser before you finalize a deal.

You should obtain a mortgage pre-approval if you plan on buying in the near future in order to secure an interest rate guarantee from the lender. The interest rate can usually be held for 120 to 180 days. A pre-approved mortgage in Canada is based on the information you provide to us in your application and is subject to verification of conditions such as employment and down payment verification.

Yes. Our lenders offer pre approvals from 120 days to 180 days days. When it comes to new construction many lenders will extend that pre approval time to fit the construction schedule. Having a pre-approved mortgage will allow you to hold a great interest rate while you shop for or build a new home.

Qualifying guidelines vary depending on the lenders criteria and products available. To find out exactly what you can qualify for, please submit your application for a quick approval.

Yes, most lenders will accept down payment that is gifted from a family member. A gift letter is usually required to be signed by the donor to confirm it is not a loan.

The minimum down payment is 5% to purchase a home in Ontario, subject to maximum price restrictions. In addition to the 5% you must be able to confirm that you can cover costs incurred to close your mortgage. These costs may include legal fees, appraisal fees, survey certificates etc. Subject to qualify, the 5% down payment can be borrowed with an additional default insurance premium added to the mortgage (an extra 0.15% if you are using  a cash-back mortgage or borrowing the funds (from credit card, line of credit etc) as your down payment..

Some lenders will consider your mortgage application depending on the circumstances surrounding your bankruptcy and your credit history since the bankruptcy has been discharged. The best way to determine if you can qualify for a mortgage after being discharged from bankruptcy is to call a mortgage consultant.

In most cases:

  • Full time employment/proof of income
  • Good credit rating
  • Verifiable down payment
  • Online Approval Application

In most cases:

  • Registered Retirement Savings Plan (RRSP’s may be used as a down payment up to a maximum amount of 20,000 and is not subject to income tax if repaid within a specific time period)
  • Gift from immediate family
  • Accumulated savings
  • Sale of existing home
  • Sweat equity

Costs incurred are:

  • Legal costs (Usually between $600 – $1000)
  • Insurance on the property and mortgage applicant
  • In some cases an appraisal is requested
  • Taxes

If all information requested by the lender (i.e. Income verification, down payment verification and property details) are given to the broker in a timely matter than the transaction can be completed in as little as 2 weeks.

Canada Mortgage and Housing Corporation is a federally owned and operated institution that evaluates the client and property to allow the borrower to purchase a home with a lower down payment requirement. This corporation insures the mortgage on behalf of the bank, through a premium added to your mortgage. This way the banks are obligated to provide a mortgage for those with less than a 20% down payment.

FAQ