The Library

Income Verification

Income verification is a key piece of your mortgage qualification. Once we understand how your income is derived, then we will work with you on identifying what will be needed. To give you an idea of what that may look like, we have listed it here:

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Terms & Rates

Terms

The term of a mortgage is the length of time a lender will loan mortgage funds to a borrower. This duration can be from six months to ten years, two to five years being the most common. Generally, the shorter the duration of a mortgage term, the lower the interest rate, and the less it costs to borrow the money. At the end of each term, you will either pay off the balance owing or renegotiate the mortgage for another term until the entire mortgage is paid back.

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What Is A Mortgage

The purchase of a home is one of the biggest decisions and significant financial investments a consumer makes. It is extremely important that you do your research and educate yourself on key mortgage terms in order to make an informed decision about what mortgage product is best for you.

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Tips for Getting Started

(For First Time Buyers)

  • Know your credit score
  • Develop a budget
  • Learn key mortgage terminology
  • Determine how much you can afford
  • Get pre-qualified
  • Talk to a mortgage professional

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Closing Terms & Costs

When you and the seller come to an agreement on the price to be paid for the house, you must provide a deposit. A deposit is an advance payment of part of your down payment and is paid at the time of signing the Agreement of Purchase of Sale.

The Agreement of Sale is a legal document the buyer and seller approve detailing the price & terms of the transaction.

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Lending Strategies

Limited Downpayment Strategy

For those of you who have or wish to use a limited amount of money for a downpayment on a new purchase, you can use as little as 5% of the purchase price as a downpayment (financing to as much as 95% of the purchase price) with fully discounted mortgage rates. For those of you who wish to purchase with zero downpayment, you do have the option to finance 100% of the purchase price but at an increased interest rate.

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Credit Scoring

Your credit score is an important factor in determining the type of mortgage you may qualify for. Lenders use credit scores to measure a client's ability to repay borrowed funds and determine their creditworthiness. To a lender, a high credit score usually indicates that the individual is responsible with their credit and are likely to repay their mortgage on time as opposed to someone with a low score. Credit is not the only factor to determine an approval for financing; however, it is a significant factor and should be considered by each client before they begin the financing process.

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Mortgage Insurance

There are a number of different types of Mortgage Insurance. Here is a breakdown of the types:

  1. High Ratio Mortgage Insurance
  2. Mortgage Life Insurance (Creditor Life Insurance)
  3. Title Insurance
  4. Home Insurance

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Mortgage Fraud

Protect Yourself from Real Estate Fraud

Identity theft occurs when someone uses your personal information without your knowledge or consent to commit a crime, such as fraud or theft. A growing problem related to identity theft in Canada is real estate title fraud.

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Mortgage Dictionary

Agreement of Purchase and Sale - A legal agreement that offers a certain price for a home. The offer may be firm (no conditions attached), or conditional (certain conditions must be fulfilled before the deal can be closed).

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Equity

According to Dictionary.com: the monetary value of a property or business beyond any amounts owed on it in mortgages, claims, liens, etc.

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Mortgage Types

Open Mortgages

If you want to make large payments on your mortgage or pay off the entire mortgage without penalty, then an open mortgage is for you. An open mortgage offers maximum flexibility. These homeowners are willing to accept some fluctuation in the interest rate for the flexibility of paying off the entire mortgage before the term is complete.

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More Reading

Canada's national housing agency, the Canada Mortgage and Housing Corporation (CMHC), was established as a government-owned corporation in 1946 to address the country's post-war housing shortage. The CMHC offers a wealth of information to home buyers and homeowners. See below for a selection of More Reading that we think you will find especially helpful.

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