The idea of buying a home can seem really overwhelming, but it’s actually pretty straight forward. Step 1 You decide that it’s time to buy. The first step is to contact your mortgage broker or bank to figure out how much you can afford based on your income and your down payment. They will usually send in your application to hold the current rates for…
When buying a home or other property, you’ll have to rely on a range of professionals to guide you through the process. For first time home buyers in particular, it helps to be acquainted with these specialists and their roles. Mortgage Broker – A mortgage expert who introduces buyers to a full range of mortgage products, interest rate options, and strategies to pay off a…
One of the most important pieces of information to know is your down payment percentage. This will determine whether your mortgage is conventional or hi-ratio, and both have different rules that will affect how much you can borrow. HIGH-RATIO MORTGAGE If you have under 20% of the purchase price as your down payment, your mortgage is considered hi-ratio. Hi ratio mortgages must be insured…
It’s quite common for borrowers to confuse amortization and term. Amortization is the number of years it takes to pay off your entire mortgage. Term is the length of your contract. When your term is up, you can change your mortgage amount, amortization, and interest rate. Choosing a longer amortization reduces your monthly payment and therefore increases how much you can borrow. Longer amortization periods…
One of the questions I get asked frequently is whether to choose a fixed product or a variable product. Which route to take ultimately depends on your preferences. Here are some things to look at when making your decision: 1. Fixed payments vs Fluctuating payments There is a certain premium that you pay to have a guaranteed payment for a given time period. That's worth…
Before beginning the bidding war on a potential property, it helps to have an indication of how much you can afford. Some home buyers don’t fully understand pre-approvals. Even if you obtain a pre-approval, it does not guarantee you will qualify for the financing. The main benefit of a pre-approval is that it will give you a good idea of how much you can afford…
Several factors come in to play when a lender is deciding how much you qualify for. Credit Lenders want to see that you have a good history of paying your bills. Gross Debt Service Ratio (GDS) Gross debt service ratio is the percentage of your income that is going towards your home payments (mortgage, property tax, condo fees). The percentage allowed varies among…
The majority of Canadian citizens have a credit score. Scores can range from 300 to 900. Anything above 680 is considered good credit and you can usually receive a full range of borrowing options. Once you get below 600, your options will become more limited. Your score is composed of a few different elements from the past 7 years: payment history amount of…
Although you don’t need to provide documents during the pre-approval process, you will eventually need to confirm the information on your application. The exact documents required vary from lender to lender, but there are a few that you can expect to provide each time. Mortgage Commitment: The mortgage commitment is the contract that the lender provides. It includes all the conditions required from you…
The Home Buyers' Plan (HBP) is a first time home buyer program that allows you to withdraw up to $25,000 from your RRSP for a down payment. Conditions for participating in the HBP Only the individual who is entitled to receive payments from the RRSP can withdraw funds from an RRSP. You can make withdrawals from more than one RRSP as long as you are the…
