Closing costs are the additional fees associated with the purchase of your home that are in addition to the actual purchase price, such as legal fees and disbursements, land transfer taxes and moving expenses.
For CMHC (Canada Mortgage and Housing Corporation) and GENWORTH FINANCIAL CANADA insured mortgages and Home Equity Lines of Credit (HELOC), you must also provide evidence of available cash for closing costs equal to 1.5% of the purchase price. These funds may be borrowed and repaid over a period of 12 months.
Closing costs generally range between 1.5% to 4% of a home’s selling price. You must pay these costs at the time you close on your loan.
You will be provided with the balance in your property tax account on your mortgage semi-annual statement which is sent out the beginning of January and July of each year.
There are a number of resources available to prospective Mortgage clients available under the Mortgage Tools and Resources in the online mortgage section. The How Much Can I Afford Calculator will help you determine the amount of mortgage suitable to your financial situation.
When deciding whether or not an individual may be approved for a mortgage, other factors are taken into consideration. Aside from your gross annual income and a summary of assets and liabilities, we must have your permission to run a check on your credit history. Credit history, income and/or liabilities (past or present) all influence our final credit decision.
To determine the amount of mortgage you may qualify for, click here and complete our Mortgage Pre-approval document today.
Mortgage rates can be found online by clicking here.
Likely the largest debt you’ll ever take on, a mortgage is a loan to finance the purchase of your home.
Your home is collateral for the loan, which is also a legal contract you sign to promise that you’ll pay the debt, with interest and other costs, typically over 15 to 30 years.
If you don’t pay the debt, the lender has the right to take back the property and sell it to cover the debt. To repay the debt, you make monthly installments or payments that typically include the principal, interest, taxes and insurance, together known as PITI.
This is what you will need to provide to help your moorage application go quickly and smoothly, please provide with copies of the following information
For all applications: Income verification: Need 2 of the following that apply to you:
• Letter from your employer
• Current pay stub (within the last 30 days)
• Purchase and Sale Contract
• 2 years tax returns
• Last year tax assessment
• Copy of leases
• Copy of bank statement / passbook / GIC / RSP /Mutual Fund Statement
• Gift letter plus proof of gift funds
For new purchases
• Copy of offer to purchase
• Copy of MLS listing
• Copy of floor plan / site plan / artist rendering (for new builder purchases)
• Solicitor information
• Down payment verification
For mortgage transfers or refinances
• Copy of registered Title Document (deed)
• Copy of registered Mortgage/Charge
• Most recent property tax bill receipt
• Current home owner’s fire insurance policy
• Copy of most recent mortgage statement or renewal statement
• Copy of letter of request (to payout existing mortgage)
A mortgage loan is often repaid in regular payments. The amortization schedule shows you how the percentage of your principal paid off increases with every payment, while the percentage of interest decreases. Payment schedules that are more frequent can save some interest costs by reducing the outstanding principal balance more quickly than with monthly payments. The more payments you make in a year, the lower the overall interest you have to pay on your mortgage.
A down payment is usually between 5% and 25% of the total cost of the home. The amount of the down payment depends on your credit history, income, the cost of the home, and the type of mortgage you choose. TD bank allow for no down payment at all.
If your down payment is less than 25%, you will need to pay a insurance premium to CHMC or GE. This is insurance you pay to protect the bank if you don’t repay your loan in full. Premium mortgage insurance is added to your closing and monthly mortgage costs.
The bank will require the source of your down payment and have restrictions about how much can come from gifts from your relatives. In most cases, a gift letter will need to be documented.
If you are self employed you may already have experienced the frustration of obtaining mortgage financing. Well if your accountant has done his job your net income is probably much lower than your gross income making it next to impossible to qualify. No worries, you can mortgage a property today for up 90% of its value with little or no income verification required.
If a down payment is the only thing keeping you from taking advantage of today’s low mortgage interest rates, the No Down Payment Mortgage could be just what you need.
Here is how it works:
The mortgage is 100% of the property appraised value
You must have a clean credit history (No previous bankruptcies and any late payments in the last two years)
You must have good job stability (two years in the same line of work is preferred)
CMHC stands for Canadian Mortgage and Housing Corporation. It is a Crown Corporation that is required to operate its mortgage loan insurance. This mortgage insurance provides protection for the lender if the borrower defaults.
If you are planning a home purchasing or refinance the premiums are as follows:
|Financing required||Premium % of Loan Amount|
|Up to and including 80%||1.00%|
|Up to and including 85%||1.75%|
|Up to and including 90%||2.00%|
|Up to and including 95%||2.75%|
|Flex Down Payment||2.90%|
Any purchase where the down payment is less than 25% is considered a high-ratio mortgage, and the mortgage must be insured by the Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada. The insurer will charge a fee for this insurance. The amount of the fee will depend on the amount you are borrowing and the percentage of your own down payment. Typical fees range from 0.5% to 2.9% of the principal amount of your mortgage. This amount can be paid up front or added to the principal portion of your mortgage. A Mortgage Specialist can help you determine the exact amount.
The mortgage loan insurance protects the lender and, by law, most Canadian lending institutions require it. The way it works is if you default (fails to pay) on your mortgage, the lender is paid back by the insurer. This mortgage insurance takes place when you don’t have the traditional 25% of the purchase price to put down. The cost of this type of insurance is a premium and subject to provincial sales taxes.
In Canada exists 2 providers of this type of insurance: CMHC and GE. The premiums are as in the table above.
This depends upon your desires, your budget, your time and many other factors. Please read further about whether to buy a new or resale home.
The best time of year to make your purchase is dependant upon many factors, including your personal situation, the local real estate market conditions and the general state of the economy. My experience says that the best time to purchase your home ‘was yesterday’ and I’m not kidding. You must get into the market as soon as you can, mainly to begin reducing your mortgage rather than paying your landlord which in turn increases your equity and allows you to move up to a larger home within a few shorts years. This is one of the secrets to real estate. You may see a very interesting and regular pattern of price changes in the marketplace and this will give you an idea of the market peaks and valleys during the year.
No, there is no commission when you purchase your home through me.