What is the minimum down payment you can put down when purchasing a home?
The minimum you are required to put down when purchasing a home is still 5% if it is your principle residence for a purchase price of $500,000 or less. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.
When do I have to pay CMHC/mortgage insurance fees?
Generally any mortgage that is purchased with less that 20% down is considered "high ratio" and requires a mortgage insurance premium. Anything that is less than 80% loan to value is considered "conventional" and a mortgage insurance premium in not applicable. There are a few exceptions.
What is the maximum a mortgage can be amortized for?
For conventional mortgages 30 years, for high ratio 25 years
What are the most important things needed to get a mortgage approved?
Lenders and banks usually look at 4 main components of an application:
-Credit: This gives a picture of you financial history and responsiblity.
-Down payment: Generally the more down payment you have the more lenient the lender is. They usually ask for 90 day history of proof of funds. Down payment can be also gifted.
-Income verification: This is important to show that the mortgage is affordable and will be serviced by income earned. Generally, for employed clients a job letter and paystub will suffice. For self employed clients, generally they are looking for the 2 most recent years of Notice of Assessments. The lender can ask for any other documentation if seen fit at their discretion.
-Property: If the subject property is in poor condition or not easily marketable, it may hurt the approval.
First time home buyers
What are property transfer taxes (PTT)?
The Property Transfer Tax is a tax payable to the Provincial Government by purchasers of real estate. The tax applies to all types of real estate, whether residential, commercial or industrial.
When and how much is GST?
What is the mortgage stress test / qualifying rate?
The mortgage stress test requires banks to check that a borrower can still make their payment at a rate that’s higher than they actually pay.
What is the difference between a fixed vs a variable rate?
With a fixed rate mortgage, the mortgage rate and payment you make each month will stay the same for the term of your mortgage. With a variable rate mortgage, however, the mortgage rate will change with the prime lending rate as set by the Bank of Canada or your lender.