Mortgage
Your guide to understanding mortgage options and planning.
1: Pre-Approval
Assessment of assets, income and debt
Determines your budget
Focuses your search
Offers credibility to seller
May need to talk to 3-4 brokers. Don't get discouraged.
Locks in interest rate
2: Documents to gather
Proof of Income - Pay Stubs, T4 (2 years), Notice of Assessments
Proof of Assets - Bank Statements (3 months), Investments, Properties, etc
Debt Overview/Credit Rating/Financial Obligations
Employment Verification Letter
Gov't Child Care Benefit Statement
Proof of down payment and closing costs
Separation Agreement/ Divorce Certificate
Work Permit
3: Self Employed
Make sure business is profitable
2 years min
Report enough income
Increase down payment to avoid mortgage loan insurance
5: Government programs
Home Buyers' Plan (HBP)
Home Buyers' Amount - Tax Credit
First Home Savings Account (FHSA)
Energy Efficient CMHC Rebate
Tax-Free Savings Account (TFSA)
GST New Housing Rebate
First-time Home Buyers' GST Rebate
6: Mortgage Loan Insurance
Required if your down payment is under 20%
2.8% - 4% loan premium; higher downpayment means lower rate.
3 providers - CMHC, Canada Guaranty, and Sagen (formerly Genworth)
5% - 4 % / 10% - 3.10% / 15% - 2.8%. Different for 30yr amortization
7: Closing costs
Appraisal Fees
Condo doc review
Land Titles Registration
Estoppel Certificate (for condo units)
Title Insurance
Legal Fees and Disbursements
Property Taxes
Bridge Financing
Home Inspection
Property Survey
Landscaping Deposit
Moving Expenses
8: Purchase plus improvements
Bundle the home and renovation costs into one mortgage (up to a set %), saving interest costs
Renovation Quotes: Provide quotes for the work that needs to be completed.
The Lender directs the solicitor to hold funds until the work is confirmed complete.
Lender Approval: Lender must approve renovation scope, cost, and any changes.
Appraisal fee: Home needs to be appraised "as is" and "as improved". To confirm work matches quotes.
Timeframe: Renovations must be done in typically 120 days, or the lender may cancel
9: Porting your mortgage
Transfer existing mortgage to a new property
Keep your rate
Avoid penalties
Approval needed
Top-up may be required
Typically 120 day window
10: Credit score
Payment History
Public Records, e.g. bankruptcy
Credit Utilization
Number of Credit Inquires
Length of Credit History
Types of Credit
Avoid financial changes before possession
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