Needs vs. wants
Lawyers and Notaries
Home & Fire Insurer
Builder (if buying new)
Gross and Total Debt Service Ratios
Online Mortgage Qualifier Calculator
GST (new construction)
Mortgage Insurance Premium
Legal or Notary Public fees
Mortgage Discharge Fee (Seller)
BC Property Transfer Tax (PTT)
Fire and liability insurance
Home Inspection Fee
Application Fee (private mortgages)
Status Certificates (well/septic)
Mortgage Life Insurance
Provincial Sales Tax
BC Property Tax Deferment Programs
First-time Homebuyers’ Tax Credit
BC Home Owner Grant
Home Adaptations for Independence (HAFI)
BC Seniors' Home Renovation Tax Credit
Rain barrel subsidy programs
Local Government Water Conservation Incentives
Local Government Water Meter Programs
Water Saving Kits
BC Hydro Power Smart Savings and Rebates
FortisBC New Home Energy Rebate Offer
FortisBC Rebate Program for Homes
Energy Conservation and Assistance Program
Energy Savings Kits
Home Energy Rebate Offer
Smart Thermostat Pilot Program
Heritage Energy Retrofit Grant (pilot program)
RBC's Energy Saver Mortgage
RBC's Energy Saver Loan
BMO Eco Smart Mortgage
Vancity Home Energy Loan
CMHC Mortgage Loan Insurance Premium Refund
Why use a Mortgage Broker?
Preapproval vs. Prequalification
Types of Mortgages
Conventional Versus High-Ratio Mortgage
Documents Needed to Get a Mortgage
Down Payment Options
Business-for-Self (BFS) Financing
New to Canada:
Put in an offer
Contract of Purchase and Sale
After Your Offer is accepted
While we have made every attempt to make this information accurate, due to the changing nature of the industry please consider this as a general guide not as a reference. If you Live in a Province other than BC or the United States we would be glad to refer you to one of our associates there to help you. If you have specific questions we would be happy to answer them or help find someone that can. Happy House Hunting.
Best predictor of future value is past/current price trends of similar homes in neighborhood
Neighborhood development opportunities
To schools, amenities, city core, transportation
Long-term / resale value:
Desire of future buyers to buy same property
A home is about more than the number of bedrooms or bathrooms. It's about how you feel when you're in it. To really pinpoint the type of home you're looking for, consider the following questions and discuss them with your Realtor.
1. What makes you comfortable in your current home?
Is there anything in particular you'd like to duplicate?
2. What is your primary reason for searching for a new home?
3. Do you have/or intend to have children? What are their ages, interests and activities?
4. Do you entertain a lot? What areas of your home will you primarily use to entertain?
5. How long do you expect to live in the home?
6. Do you have any pets that stay in the house or outside?
7. Would you consider yourself to be more casual or formal?
8. When you imagine your dream home, what do you see? What images come to mind?
List your space needs, including:
living space requirements (i.e. how many bedrooms)
what you're bringing with you from your old house
Consider the following and record any notes or preferences:
Number of bedrooms
Number of bathrooms
Age of property
Condo or House
What are your needs? Now, 1-3 years, 5 years plus?
Affordability, More on this later.
What can you afford? Down payment, heating, condo fees, maintenance, repairs, renovations, property taxes…
More than just the home, it's important to think about the type of neighborhood that is right for you.
Please consider the following and record any notes or preferences:
Areas you would enjoy
Specific streets you like
School district(s) you prefer
Your work location(s)
Your favorite shops/conveniences
Recreational facilities you enjoy
Any additional items to consider when selecting our target neighborhoods:
Neighborhood price trends. Return on your investment. Last 15 years, next 15 years.
•Supply and Demand
How much of the same type of housing is in your area? Too much will cause extra supply, too little may have your property appear as too “unique”
Generally less expensive
Less maintenance than a house
Include extras, such as security systems and recreation facilities.
Be prepared to pay monthly condominium fees that contribute to the corporation’s contingency fund and go toward covering the collective cost of property maintenance, repairs, replacements and insurance.
Your home buying team includes………….
Your realtor is an integral part of your team. Your realtor can give you access to properties that never make it to the MLS website. Many properties are sold in a matter of days, and it can often take longer to make it through the MLS process. Realtors gain access to information about homes that may come on the market before any listing is signed. More important, your realtor can tell you how to be successful in your bid for a desired property.
In today’s competitive real estate market, it’s very difficult to acquire any property without the help of a real estate professional.
If you are only a Buyer and not a Seller there is NO COST, to use a Realtor. The commission is paid by the Seller to the Listing agent and then shared with the Buyer’s Realtor. So use a Realtor to act on your behalf is FREE!!!
An explanation of the relationship between you and your Realtor.
The Agency Relationship Realtors work within a legal relationship called agency. The designated agency relationship exists between you, the principal and your agent.
The essence of the agency relationship is that the agent has the authority to represent the principal in dealings with others.
Agents and their salespeople are legally obligated to protect and promote the interests of their principals as they would their own.
The agent must protect the principal's negotiating position at all times, and disclose all known facts which may affect or influence the principal's decision.
To obey all lawful instructions of the principal.
You can expect competent service from your agent, knowing that the company is bound by ethics and the law to be honest and thorough in representing a property listed for sale. Their own agents in a single transaction can represent both buyer and seller.
Dual agency occurs when a real estate agent is representing both the buyer and the seller in the same transaction. Since the agent has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent.
If you find yourself involved in a dual agency relationship, before making or receiving an offer both you and the other party will be asked to consent in writing to this new limited agency relationship. This relationship involves the following limitations:
1. The Agent will deal with the Buyer and the Seller impartially:
2. The Agent will have a duty of disclosure to both the Buyer and the Seller except that;
The Agent will not disclose that the Buyer is willing to pay a price or agree to terms other than those contained in the Offer, or that the Seller is willing to accept a price or terms other than those contained in the Listing;
The Agent will not disclose the motivation of the Buyer to buy or the Seller to sell unless authorized by the Buyer or the Seller;
The Agent will not disclose personal information about either the buyer or the seller unless authorized in writing;
The agent will disclose to the Buyer defects about the physical condition of the Property known to the Agent.
When There Is No Agency You may also choose to use the services of a REALTOR without having any kind of agency relationship. This might occur, for example, when you are being shown a property by the seller's agent. The Realtor you choose to work with in this manner has a legal and ethical duty to provide you with accurate, honest answers to your questions and can provide all these services:
Explain real estate terms and practices
Provide and explain forms used
Recommend or suggest a price
Negotiate on your behalf
Inform you of his/her principal's top/bottom line
Disclose any confidential information about his/her principal unless otherwise authorized.
You should not provide a REALTOR who is not your agent with any information that you would not provide directly to his her principal.
The trend to move towards using mortgage brokers/agents to arrange mortgage financing is continually increasing. Why has this shift occurred? Well, very simply put, TOP-NOTCH SERVICE and UNBIASED ADVICE!
The banks are cutting back on staff and are centralizing operations to save money. This doesn’t bode well for the consumer. Unlike individual banking representatives, who often move from one branch to another hoping to make advancement in the corporations, as your mortgage advisor, it’s my intention to create a lifelong relationship.
Today, many banks are buying out smaller trust companies to expand their portfolios. Most major banks lend out money through these trust arms at reduced rates. If you just stick with your bank, you lose access to hundreds of other financing arms – including offerings from multiple banks, credit unions and trust companies – that may have better rates, products and packages to offer you.
Mortgage brokers get paid from the lenders so their service is offered to you without charge. What else can you ask for? Better rates, personalized service, flexibility and products at no cost to you.
Some will say that the fee is built into the rate, but this is not so. It costs the banks approximately 40% less to generate a mortgage through a broker than a branch, as there is no overhead to pay if the bank doesn’t get a client’s business. Instead, the mortgage broker bears the entire cost of day-to-day business activity.
In most cases there is NO COST, to use a Mortgage Broker. The only time you will pay a fee is if you get a private mortgage or use some sort of bank that is not in the normal spectrum of use. The Bank pays the Mortgage Broker and it is 40% cheaper for them to use a broker than an employee in their own bank, so Brokers are the best deal all round. FREE, is a pretty good price.
This is probably the best money you’ll ever spend, this number ranges anywhere from about $400-$800.00 depending on the inspector and the size and type of properties on which you are having the inspection.
Preferably referred; flat fee structure; will provide full, written report.
While a competitive situation may not enable you to have an inspection done, it’s highly recommended. Whenever possible, have an inspection done so that you’re completely informed about what you can’t see behind the walls. There may be mold, old wiring or leaks that’ll cost you a lot to fix down the road. I can recommend a professional inspector to help set your mind at ease.
Arrangements will need to be made for a notary or lawyer to draw up the mortgage documents and register them on file for you. They will make you aware of what monies you need to provide and when; must advise about title, encumbrances, liens on property; may discuss “title insurance”; will receive funds from bank/lender “in trust”.
Since the visit to your lawyer is the last step in the entire process, it’s extremely important that this is handled with care.
I can recommend a qualified and professional lawyer or notary who specializes in real estate transactions that can help streamline this process.
•Required by lender to obtain mortgage financing. Take a copy of your insurance coverage papers with you to the Lawyer/Notary when you go to sign.
Home Staging is the art of decorating a house to sell quickly and for top dollar.
For some clients, a home stager will come in and make recommendations on improvements that the homeowner can do on their own. Recommendations typically include things like:
For other clients, the home stager may furnish the entire home from top to bottom including bringing in furniture, accessories and art after having the home repainted, repairs done, lighting changed, etc.
Most projects lie somewhere between these two extremes. It really depends on the client’s needs, buget and the time available.
A professional home stager understands that all recommendations and changes are geared to improving the marketability of the property. Home staging should increase the selling price, and speed up the time to sell— because the home is decorated to appeal to the greatest number of buyers within the home’s target market.
Home staging offers a potentially significant return on investment.
Lending institutions use two different formulas using your gross monthly income to determine an affordable mortgage payment:
1 GDSR (gross debt service ratio)
2. TDSR (total debt service ratio)
(Dominion Lending Centres)
The first steps in buying a house are ensuring you can afford to pay at least 5% of the purchase price of the home as a down payment and determining your budget. This calculator steps you through the process of finding out how much you can borrow. Fill in the entry fields and click on the payment schedule button to see a complete amortization schedule of your mortgage payments.
As a final note: If you are buying a home with less than 20% down the bank needs to see 1.5% of the purchase price in closing costs available. Either by a gift, cash on hand or credit cards (If it is credit cards, it has to be worked into your debt ratio when calculating for your mortgage.)
Feel free to call us and we will be glad to provide you with a Free Pre-Qualification Consultation.
New homebuyers can apply for a rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is up to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000.
To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.
A 10% premium refund may be available when CMHC Mortgage Loan Insurance is used to finance an Energy-Efficient Home.
Premium on Total Loan
Premium on Increase to Loan Amount for Portability and Refinance
Up to and including 65%
Up to and including 75%
Up to and including 80%
Up to and including 85%
Up to and including 90%
Up to and including 95%
90.01% to 95% —
Non-Traditional Down Payment**
“Government of Canada Takes Action to Maintain a Healthy, Competitive and Stable Housing Market”
December 11, 2015 – Ottawa, Ontario – Department of Finance
Finance Minister Bill Morneau today announced changes to the rules for government-backed mortgage insurance to contain risks in the housing market, reduce taxpayer exposure and support long-term stability. Effective February 15, 2016, the minimum down payment for new insured mortgages will increase from 5 per cent to 10 per cent for the portion of the house price above $500,000. The 5 per cent minimum down payment for properties up to $500,000 remains unchanged.
You most likely need an appraisal if you are putting 20% or more down on the purchase price, if you are buying foreclosure, or refinancing your property. If you are putting less than 20% down you should not have to get an appraisal
You will require the services of a Lawyer or notary in order to complete the final documents, transfer title and other legal “Stuff”. The cost for a Notary or a Lawyer is pretty close to the same. The one advantage to using a lawyer is should you run into any legal problems, the lawyer can help and advise you, where a notary cannot give legal advice. If just buying the costs will run between $1000 - $1400.
Most will have a flat fee plus disbursements they have no control over such as discharging a mortgage. It is important to raise what the costs are at the time he/she hires the Lawyer to close their transaction.
If you have a mortgage, there is a strong chance that the buyer will not be interested in assuming it. Therefore, you may need your mortgage lender to accept an early discharge of the mortgage. the mortgage companies usually charge a discharge fee of 3 months interest on the outstanding principle; however, this penalty can take other forms such as an interest differential fees depending on the terms of you mortgage contract. Depending on the size of your mortgage, the penalties can potentially amount to several thousand dollars. If you are purchasing another home, your lender may be prepared to waive the discharge fee(s) as long as you arrange a mortgage on your new property with the same lending institution. This is an issue that you should discuss with your mortgage company before you sell.
Homebuyers in BC pay a provincial Property Transfer Tax (PPT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder, up to a maximum of $475,000.
First-time homebuyers may be exempt from paying the PTT. There is a proportional exemption for between $475,000 and $500,000. At $500,000 and above the rebate is nil.
If more than one person is buying the home and some have owned a home and other haven’t, the percentage of the people who have not owned is used to calculate how much PTT is paid. If you have owned a property anywhere in the world, you will have to pay PTT.
You will be required to bring a copy of your home insurance policy to the lawyer’s office when you sign your documents for your purchase. The bank will not fund the mortgage without proof of insurance. Costs will vary depending on type of property, area, amount of coverage, etc.
Moving fees vary depending on the distance moved and whether professional movers do all of the packing. It is wise to get an estimate from more than one mover. It is also wise to book your mover well in advance of closing.
Some lenders require property buyers to add property tax installments to monthly mortgage payments.
You will be required to pay the portion of the property taxes for the period of time that you have owned the home in a year. This could be either a credit to you, or a debit for you. Property Taxes are due July 2 of every calendar year. They are calculated from January 1 of the current year to December 31 of the current year. If you purchase a property before July 2, the seller will most likely credit you with the taxes that they owe for the time they have lived there. (Exception to this is if they are paying the municipality directly, they may have built up a credit in the account and you will have to reimburse them.) If you purchase a property after July 2, the taxes should have been paid and you will have to pay the seller for the number of days that you will be living in the house for the rest of the year.
The lawyers do this calculation for you, it is the yearly amount divided by 365 or (366) days and multiplied by the number of days you own the property and the Sellers on the property.
This is paid monthly, but it covers you should you be out of work or one party passes away. Speak with a Mortgage Broker about how this works and if it would be good for you.
Provincial Sales Tax
The PST is generally not payable on services except for legal and notary fees. Both the GST and PST are paid on legal and notary fees.
If not included in the taxes this is a charge by the municipality for water and sewer. It is a different amount for every municipality. It is calculated the same way as the property taxes.
($364.00/YR, 1 can per week, Maple Ridge)
Some municipalities have you pay your own garbage pickup. Be sure you know what the cost is, so you can work it into your extra costs.
Title insurance is much more common now than it was a few years ago. Every bank used to require a survey Certificate of the property and it was getting expensive to do them, plus a lot of the time the surveys were the original ones from when the land had first been developed. So they were finding that there were in accuracies in the surveys. So title insurance is now used in place. It insures the bank against anything that could happen on the property to possibly affect the value, and advises them of any changes on the title. As an example, if you get a second mortgage and it is registered on title the bank will be informed, or any liens on the title or any disputes about boundaries etc.
Qualifying homeowners aged 55+ may be eligible to defer property taxes.
Qualifying homeowners may be eligible to defer property taxes.
Qualifying homeowners who financially support children under age 18 may be eligible to defer property taxes.
This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation.
The credit is calculated by multiplying the lowest personal income tax rate for the year by $5,000. For the 2015 tax year, the maximum credit is $750.
Reduces property taxes for home owners with an assessed value of up to $1,200,000. The basic grant gives home owners:
•a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver, and Fraser Valley regional districts
•an additional grant of $200 to rural homeowners elsewhere in the province
an additional grant of $275 to seniors aged 65+, those who are permanently disabled, and verterans of certain wars.
A program jointly funded by federal and provincial governments provides up to $20,000 to help eligible low-income seniors and disabled homeowners and landlords finance modifications to their homes to make them accessible and safer.
Assists eligible seniors 65+ with the cost of certain permanent home renovations to a principal residence to improve accessibility or help a senior be more functional or mobile at home. The maximum amount of the refundable credit is $1,000 per tax year and is calculated as 10% of the qualifying renovation expense (maximum $10,000).
Many Metro Vancouver municipalities offer rain barrels for sale, often at a discount for their residents:
Burnaby - $70
Coquitlam - $72
Richmond - $30
West Vancouver - $55
Other municipalities have similar offers.
Your municipality may provide grants and incentives to residents to help save water.
Clothes washers: replace your old clothes washer with a new, high efficiency Energy Star clothes washer and receive a $100 or $200 rebate from Richmond.
Your municipality may provide a program for voluntary water metering so that you pay only for the amount of water you use. Burnaby (scroll down), Delta, Richmond and West Vancouver have programs and other municipalities may soon follow.
Many Metro Vancouver municipalities offer water wise kits and other tools for reducing home water consumption including Burnaby, Coquitlam, and Delta.
Improving your home's efficiency and saving on your electricity bill can be easy if you know where to start.
FortisBC and BC Hydro customers can receive rebates when building Energy Star new homes or when installing high-efficiency natural gas appliances. Homes must be built between April 1, 2015 and March 31, 2016. Applications are due September 30, 2016.
Rebates for home owners include:
• $300 rebate for buying an EnerChoice fireplace
• up to $1,800 off an Energy Star water heater
• $1,000 rebate for switching to natural gas (from oil or propane) and installing an Energy Star heating system
Total amount of available rebates is $5,300 per household.
BC Hydro and FortisBC offer free energy assessments and energy saving products to income-qualifying households. Qualified contractors will install upgrades ranging in value from $300 to $5,000 depending on the need of the home.
BC Hydro and FortisBC offer low-income customers a free energy saving kit containing products to help save energy and money.
BC Hydro and FortisBC offer home owners rebates for upgrades and improvements, including insulation, draftproofing, space and water heating systems and ventilation to reduce the average customer’s energy bill by 30%. There is a bonus offer for completing three or more of certain upgrades.
Total value of available rebates is almost $5,300 per household.
City of Vancouver and Vancity are offering a $125 rebate for a homeowner purchasing 1 of 3 smart thermostats that automatically controls the climate in your home. This pilot program runs to December 2016.
Grants of up to $3,000 per household to assist with energy retrofits for Vancouver homes built before 1940 and homes listed on the Vancouver Heritage Register. This pilot runs to August 31, 2016. It is sponsored by Vancouver Heritage Foundation and the City of Vancouver Sustainability Group with assistance from City Green Solutions. Qualifying retrofits include insulation, air sealing, window repairs and storm windows, and high efficiency forms of heating and hot water.
Home owners who have a home energy audit within 90 days of receiving a RBC Energy Saver Mortgage may qualify for a rebate of $300 to their RBC account.
Offers a 1% interest rate discount or a $100 rebate on a home energy audit with a qualifying purchase through a fixed rate loan over $5,000.
Offers home buyers a special rate on qualifying green properties.
Offers homeowners up to $50,000 at prime + 1% for up to 15 years for energy efficient renovations.
Provides homebuyers with CMHC mortgage insurance, a 10% premium refund and possible extended amortization without surcharge when buyers purchase an energy efficient home or make energy savings renovations.
A Mortgage Broker can offer you a lot of advantages over your bank. As a Mortgage Broker, we will take all of your information once, pull your credit bureau once and offer it out to numerous financial institutions for approval. We have the opportunities to go to over 60 financial companies to get you the best rate, terms and conditions. You are probably thinking, "Well, I could do that by myself, why would I use a broker?" Well first, this is my job, you already have one, so it will save you time and inconvenience in your life. Secondly, every bank or credit union you will go to will pull your credit bureau. Every time they do an inquiry, it lowers your credit score just a little bit more. Thirdly, how many mortgages will you place in your lifetime? I will place literally hundreds, even thousands, who is going to be able to get favors with a financial institute. I have relationships with many banks and if we are looking for something special, chances are, we are going to get it.
Best of all, it is FREE to use a mortgage broker. Mortgage Brokers are paid by the bank. In a few cases, there are times when you will charged a fee. That will only happen if you have a huge credit problem or there are some special circumstances in you case. Remember, we are working for you, not a bank, it is our pleasure to take your interests to the bank. Let's get them fighting for your business.
One of the most important things you have to do in this process is to find out what you can afford to buy. Not getting pre-qualified or pre-approved is like going to the mall to buy new clothes and not knowing how much money you have in your wallet. It is just something you would not do!
The question is.....What is the difference?
Pre-qualification is when we just ask a few general questions,(usually over the phone or on-line) to see how much you could possibly afford...How much do you earn?...What is your debt load?... etc. I can take this information and give you a rough estimate of how much of a loan you might qualify for.
Pre-approval is a more in-depth process. Most of this can still be done over the phone or on-line, but at this time we will perform a more extensive check of your financial standing. We will do a credit rating check, a debt load check and will want to know how much you are putting as a down payment. At this time we will usually lock you into an interest rate hold. This way you will get locked in at today's rate. It can be held anywhere from 90 to 120 days. The rate is reviewed just before you pay for your property purchase. If the rate has gone down you will get the better rate, if the rate has gone up you keep the rate that we have locked you into already.
With rates on the upward swing it is advisable that you lock into a rate as soon as possible.
In most markets, someone who is pre-approved will get more interest at the offer presentation time when the realtor can be sure you will get the financing.
The extra advantage of having your realtor as your mortgage broker is that I can assure the seller you are totally qualified as I have done it myself. You now have the biggest advantage!!
Your beacon or credit score is lowered if it is checked several times over a short period of time. It is critical that you do not have you credit pulled more than a few times as this may effect your ability to qualify for a mortgage. Your Mortgage Broker will pull your credit once and provide that to the lending Institutions. Resist the temptation to do anything that may impact your credit score untill you check with your Mortgage Broker. Some of the ways you can impact your credit score by applying for credit include:
Cell phone shopping
Applying for credit cards
Opening a new bank account
Shopping your mortgage around to several Banks or Mortgage Brokers
Your Mortgage Broker will pull your credit score once and can provide it to the lenders they feel best suit your needs.
Also resist the temptation to buy that new couch/bed/curtains/vacation.... untill after you have the keys to your new home in your hands. Pizza for your Friends on moving day should be your first optional home expense.
•Interest rates – Cost of borrowing money paid to the lender.
•Fixed rate vs Variable rate
•Term – determines the length of time your mortgage rate is set for varying from 6 months to 10 years.
•Amortization – The length of time over which the entire debt will be paid. The longer the amortization the smaller the monthly payment. Now you can go as long as 25-35 Years!
The Dominion Lending Centres Advantage
•Dominion Lending Centres Mortgage Experts are equipped to offer you your best possible “mortgage strategy”. Enabling you to save thousands over time.
•Dominion Lending Centres Mortgage Expert offer multi-brands including our own Dominion Mortgage.
Mortgages can be a confusing subject. Buying or selling a home is an emotional decision and can be very stressful. As a mortgage expert, I will take the confusion out of mortgages and make the process as smooth as possible.
In Canada, there are two major categories that mortgages fall into, either closed or open. Most mortgages are closed, meaning that you can’t pay out the mortgage in full without paying a penalty to the lender. You can, however, often make lump sum or extra payments each year.
An open mortgage allows you to pay out the mortgage anytime without penalty. But you typically pay a higher rate than when opting for the same closed version. Open mortgages may have an administration fee that is higher than a closed mortgage if you do, in fact, decide to fully pay off the mortgage. This is partly why it’s so important to read the fine print and ask about these charges. In most cases, it’s better to take the closed product if you don’t intend to fully pay out the mortgage in a short period of time.
Closed mortgages are offered in terms starting at six months. The interest rate is fixed during that term. (The term should not be confused with the amortization. Amortization is the time period it would take to fully pay off the mortgage by making regular payments.) Variable-rate mortgages, on the other hand, have a rate that floats with the prime rate and are often closed mortgages.
Let me help you make one of the biggest decisions in your life by providing options and advising you on the best scenario for your specific needs.
Information contained on this page does not take into account changes to mortgage insurance parameters announced by the Government of Canada on December 11, 2015. These changes will come into effect on February 15, 2016.
Whenever possible, it’s advisable to try to put a 20% down payment into the new home. Most individuals are unable to do this, so their mortgage needs to be insured by either Canada Mortgage and Housing Corporation (CMHC), Genworth Financial or Canada Guaranty. This is the case because the Bank Act will only allow financial institutions to lend up to 80% of the price without mortgage default insurance.
The mortgage is insured so that if you default on your payments, the lender is paid out in full and the insurer is left to deal with the borrower. The insuring companies charge an insurance premium. The premiums are based on the loan to value (LTV), which is the amount of the loan versus the value of your home.
Loan to Value (LTV)
Insurance Premiums (Last Increase: May 1st, 2014)
Up to and including 65%
0.60% of the loan amount
Up to and including 75%
0.75% of the loan amount
Up to and including 80%
1.25% of the loan amount
Up to and including 85%
1.80% of the loan amount
Up to and including 90%
2.40% of the loan amount
Up to and including 95%
3.6% of the loan amount
90.01% to 95% – Non-Traditional Down Payment
3.85% of the loan amount
You may borrow up to 95% of any price for an owner-occupied purchase, in most urban areas. If you’re buying a property for investment purposes, the maximum loan amount is 80% and the insurance premium is higher than shown above.
You will need the following documents to secure your mortgage:
A Job Letter from your current place of employment. It will have to state when you started at the company, your position, if you are paid hourly, your hourly rate, if you are paid by salary the amount monthly, how many hours you are guaranteed, your year to date income and that you are not on probation. Let the person that writes you the letter know that the bank will be calling to verify all of the information is factual. They will not answer any questions to anyone if you have not let them know it is alright. It is part of the Privacy Act.
Your 2 most current paystubs with a year to date balance on them.
If you do not get regular hours, if you get overtime, if your pay stub does not state your year to date income, or you are self employed: We will need 2 years of NOA (tax notice of assessment).
The lender will require that you prove the source of your down payment. You’ll have to send in bank statements, statements showing RRSPs, stocks, etc. You must show a three-month history of your accounts. If there are any large lump-sum deposits, you’re likely to be asked to show where the deposit originated. For mortgages where your down payment is less than 20% of the purchase price, you’ll also be asked to demonstrate that you have access to 1.5% of the purchase price in your bank account. You must be able to show this through a credit card, line of credit, gift from family or savings in case closing costs run higher than expected.
3 months history of the bank account from which you are getting your down payment. It will have to have your name and account number on it. If you are getting the money from different accounts, we will need 3 months from each account.
If you are getting the money as a gift, you will have to get the gift letter signed by the person who is giving you the gift. The amount on the gift letter must be the same as the amount you put in the bank. There must be a money trail to prove where all the down payment comes from.
Sometimes, they will need a copy of the strata documents, if you are buying a condo. I will advise you if we need these documents.
Sometimes, an appraisal is needed, usually in the case of a foreclosure or a refinance.
Your credit score must show that you pay your bills on time. If not, you may still be approved, but the interest rate may be higher than expected. Your Mortgage Broker will provide the credit check.
This is a copy of the accepted offer of the home you intend to purchase and a copy of the MLS listing sheet.
This is a list of the more standard items. Each case is different, so don’t be surprised if they ask for some more information. They are just trying to make sure all the information they have is complete. DO NOT WORRY, we will work together to get your mortgage approved quickly and as smoothly as possible.
The main reason many renters feel they can’t afford to purchase a home has to do with saving for a down payment.
Many lenders will allow for a gifted or borrowed down payment.
You can use your money from your RRSP's, if you are a first time buyer. You can withdraw up to $25,000 from your RRSP account. It is like an interest-free loan to yourself. You do have to re-pay the money. It is repaid over a 15 year period in equal payments per year. Should you have a year that you do not repay the money to the account, you will add the amount due that year to your income.
They must be in the RRSP account for a minimum of 90 Days. You can not remove them until the 91st day, so be sure when you write an offer you do not close on the purchase before you can get the money from your RRSP account.
You must live in the home as your principal residence for one year from the completion date.
A contract of Purchase and Sale must be entered into before the funds can be withdrawn from the RRSP.
You may be able use your RRSP if you are not a first time buyer, but you will have to pay income tax on the amount that you have withdrawn and you will have to check with your bank to make sure you can withdraw the monies.
Several programs are available to assist people who are self-employed. Lenders recognize the fact that what is shown on a BFS tax return may not truly reflect the actual income earned for that party. We have several programs where qualification is based on stated income instead of taxable income. You’ll be required to have clean credit and supply us with the last two years’ tax assessments from Revenue Canada confirming that you have filed as self-employed and that you’re up-to-date with your taxes.
There are essentially two types of self-employed or BFS borrowers – those who can prove their income and those who cannot, and must instead use a stated-income mortgage product. But, if you have been self-employed for more than three years, you can’t use a stated-income product.
By providing the required documentation, you’re much more likely to be approved for a mortgage if you qualify based on your income. The trouble is that if you cannot prove your income, you pose a higher risk in the eyes of lenders.
If you have been self-employed less than three years, you can use a stated-income mortgage product up to 90% loan to value (LTV) – meaning the down payment can be as low as 10% of the purchase price. And if a BFS individual wishes to refinance an existing mortgage, the maximum loan amount is 80% of your home’s value.
If you don’t qualify for traditional financing all is not lost, since you may be eligible for alternative – or private – funding.
I have access to private investors who are willing to lend money to BFS individuals looking to obtain mortgages. Although you’ll pay a higher interest rate – on average about 12% – this route may enable you to acquire funds to purchase a home.
It’s also important to note that there are added fees involved with private funding because the deals involve a higher degree of risk and take longer to get approved. The combined lender/brokerage fee will depend on the specific deal and the risk it poses, but the figure will be disclosed upfront so you know exactly what you’ll be expected to pay for these services.
Another key point to consider is that private financing is equity based, meaning that the lender’s decision will be based on a specific piece of real estate (as opposed to conventional deals that focus on the personal credit of the borrower). Private lenders want to know that the property is marketable and that they’ll be able to easily sell it should the mortgage go into foreclosure.
Many of the available New to Canada mortgage products apply to new immigrants who have been in the country for up to 36 months. I can help set the home financing process in motion by securing a mortgage rate guarantee and preapproval, and figuring out what supporting paperwork you need to provide to purchase a home in Canada – even before you move.
In most cases, Canadian mortgage lenders and insurers want to see employment letters that prove your offer of employment and salary in Canada. You must also have at least a 5% down payment for the home from your own resources – which means it has to be your own money, not borrowed or gifted. So, if for instance, you’re selling your home in another country and using some of the proceeds as a down payment on a home in Canada, you must be able to prove this.
Lenders and insurers also want to see that you have a solid credit history. Although requirements for this proof varies based on which insurer and lender your mortgage is funded through, I’ll be able to tell you exactly what documents you’ll need to provide. Often, an international credit bureau is sufficient to prove your credit history. If this isn’t available, you can also provide 12 months’ worth of bank statements, mortgage or rental payment receipts, utility or telephone bills, and so on. Again, there are several options from which to choose and I’ll be able to specifically tell you what a particular lender and insurer want to see.
You must also apply for landed immigrant status to get the ball rolling on securing your social insurance number (SIN), which is required before you begin working in Canada.
I can also put you in touch with a trusted real estate agent to help this process run even more smoothly.
This program allows you to add the costs for renovating your new property into your mortgage. It’s offered for mortgages where the down payment is less than 20%. For situations where your down payment exceeds 20%, you would simply set aside a portion of money that was meant for the down payment to be used for the renovations.
The lender will require that you supply a list of work to be done and a quotation from a contractor. Once the work is complete, the lender will send the appraiser back into the property to verify that the work has been completed, and then your lawyer or notary will release these funds to you. This is important to note, as you’ll essentially have to pay for the renovations in advance and then be reimbursed.
Once you have found the property that meets your needs, you’ll put in an offer that’ll be accepted or countered. This may go back and forth until you reach an acceptable price with the vendor.
Contract of Purchase and Sale
Names and occupations of the parties
Description of the property being sold
Description of the price and related financing
Consent to use personal information for the purposes described.
Terms and conditions
Property Disclosure Statement Incorporation into the contract
A proposed closing date
Agreement expiry date
Buyers conditions, subject to
a date for arranging a suitable mortgage
selling a current home owned
seller providing a current survey
a home inspection to detail home’s safety, construction or condition
Once accepted your offer is a legal binding contract.
A deposit of must be presented with the offer and is held in trust by the Sellers Real Estate Company until closing. The amount will be applied to the purchase of the home.
The deposit will be returned with an unaccepted offer. However, if you cancel an accepted unconditional offer the deposit may be kept.
What Happens Now?
You may choose to have your lawyer review your accepted offer, this would need to be one of the conditions in the offer.
Fax your accepted Offer to Purchase and MLS listing to your Mortgage Expert
Fax your Mortgage Expert a copy
An appraisal is ordered (if necessary)
Send in any remaining documents required for financing (income confirmation, down payment confirmation, etc)
Send an inspector in (if applicable) – I can help you arrange this
Receive the lender’s approval on property and final approval letter
Your Mortgage Expert will submit your application to the selected lender for review
Lender issues a “Mortgage Commitment” that must be signed by all applicants
Your Mortgage Expert will review the “Mortgage Commitment” and explain required conditions (ie. Proof of income, down payment) and all other required documents.
Once all conditions are collected and all documents are signed, your Mortgage Expert will forward these to the lender for final review and approval.
DO NOT REMOVE SUBJECTS UNTILL YOUR MORTGAGE BROKER HAS THE LENDERS APPROVAL! This will involve you actually signing the mortgage commitment documents.
Once approved, lender instructs the solicitor.
All conditions of your offer are to be met, complete home inspection obtain mortgage approval
Land survey is obtained and/or Title Insurance
Lawyer searches title
Check into taxes and Liens
Arrange your utilities
Go to your lawyer to sign final documentation shortly before your closing date
Mortgage proceeds advanced to lawyer “In Trust” by lender
Your lawyer and your seller’s lawyer exchange on closing day, documents, funds, and register all documents on title
You meet with your realtor for your new house keys and move
Purchase Price: $______________
Deposit with Realtor: - $______________
Net Mortgage Amount: - $______________
Legal Fees: $______________
Property Transfer Tax: $______________
Appraisal Fee: $______________
Survey Certificate: $______________
Tax Adjustment: $______________
Interest Adjustment: $______________
Total Closing Cost: $______________