Minimum down payment you will be required to pay is 5% on amount up to $500,000 and 10% on every dollar above $500,000.
Ex: Purchase price - $600,000
Minimum down payment - $35,000
Mortgage Default Insurance is insurance that protects the lender against payment default by the home buyer. It is required by all institutional lenders in Canada if the home buyer has less than 20% down payment.
A mortgage pre-qualification can easily be defined as an estimation of how much a buyer can borrow. Often, pr-qualification is done by the broker based on information provided by borrower without verifying the documentation. Mortgage pre-approval is a written commitment for a buyer from a mortgage lender. In order to receive a pre-approval, you will be asked to provide all necessary documents confirming income and down payment. Credit check will be performed as well.
An appraisal can easily be defined as an unbiased professional opinion of a homes value. Anytime a buyer is obtaining a mortgage to purchase new home or to refinance existing home, the lender is going to require a appraisal be completed.
The Home Buyers’ Plan allows you to withdraw money from your Registered Retirement Savings Plan (RRSP) tax-free to use for a down payment.
The amortization period is the length of time it takes to pay off a mortgage in full. The amortization period is not the same as the mortgage term, which is the length of time your mortgage agreement will be in effect. Terms can range from just a few months to five years or longer.
If your down payment is less than 20% of the purchase price of your home, the longest amortization period allowed is 25 years. If you down payment is 20% or more, your maximum amortization can be 30 years. Longer amortization period means lower mortgage payments.
A collateral charge mortgage allows you to use your home as security and potentially borrow additional funds or change loans and other credit agreements, without the need to discharge your registered mortgage, register a new mortgage for a higher amount and pay legal fees. However, switching the lender at the end of the term might be slightly more expensive with Collateral Mortgage as discharge fees with this type of charge are higher.
Standard Charge mortgages are usually registered for actual amount of mortgage loan. Switching the lender at the end of the term is usually free or very low on costs.
A home equity line of credit (HELOC) is a revolving line of credit secured by your home. You can borrow money up to the credit limit, which is usually a percentage of your home’s value. With HELOC, you are only required to make minimum monthly interest payments, the principle of your mortgage can be paid of at the end of your amortization period. You are allowed to pay off your HELOC at any time in full without penalty.
Portable Mortgage is a mortgage that can be transferred from one property to another one . Homeowners often port their mortgages when they have a lower interest rate on their existing mortgage than is available for a new mortgage. By porting your mortgage to your new property, you can usually avoid prepayment charges for breaking your mortgage contract early.
An assumable mortgage allows a home buyer to take over the seller’s existing mortgage along with the property. The terms of the original mortgage must stay the same. In most cases, the lender must approve the transfer as well as the buyer who wants to assume the mortgage.
In most instances, there are no fees involved as the mortgage broker is compensated from the lender. However, in situation where a client has bruised credit, taxable income does not reflect an actual borrower's income or file doesn’t fit the typical A-type lending, the mortgage broker might charge initially disclosed brokerage fee. This fee will be disclosed up front, so if you are not satisfied with this amount, you do not have to proceed with the transaction.
There is no HST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.
It does! With a monthly mortgage, you’ll make 12 regular mortgage payments annually. When you pay bi-weekly, you’ll make 26 half-payments, amounting to 13 regular mortgage payments annually.
That might not sound like much, but it adds up. A bi-weekly payment schedule could make you mortgage-free years sooner, saving you thousands in interest payments to boot!
A guarantor is someone who guarantees that payments will be made on a mortgage. They can apply to be removed from the title at a later point if the owners become able to qualify on their own.
A Cosigner is registered on the title on the property, making them a co-owner of the property.