Call Deborah 403-852-2556 Free Reports! Apply Today! Quick Application
 
 
Frequently Asked Questions
 

What is a mortgage agent?
A mortgage agent is an independent professional that will work with multiple lenders to find you a mortgage that will suit your needs. They will find a lender with the best rates and terms for your situation. There is usually no fee to work with a mortgage broker if you qualify under standard lending guidelines. Your mortgage professional gets paid a commission or finder's fee from the lender. If there is a fee, this will be disclosed and documented up front.

What are the costs in obtaining a mortgage?
Some of the costs associated with obtaining a mortgage are legal fees, appraisal, home inspection, and utility hook-ups. We usually recommend that you have approximately $ 2500 set aside to complete your property purchase.

What is the difference between and insured and conventional mortgages?
Your mortgage is insured when you have less than 20% to put as a down-payment on your purchase. By law, banks cannot lend more than 80% of the value of the home unless it is insured by CMHC (Canada Mortgage and Housing Corporation) or Genworth. These insurers protect the lender against default. An insurance premium is charged and is added to your mortgage amount.

A conventional mortgage is when you have 20% or more to put as a down-payment on your purchase. In most cases, there is no insurance premium charged. Occasionally, the lender may still need to have the mortgage insured through CMHC or Genworth depending on the location of the property or type of property being purchased.

CMHC or Genworth Premiums
Below is a chart of the premiums you would pay on an insured mortgage. The amount that would be added to your mortgage will depend on the amount you have put as a down payment. The premium is a percentage of the mortgage amount.

How Much Does Mortgage Loan Insurance Cost?
To obtain Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.

The Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.

A 10% premium refund and extended amortization period without surcharge may be available when Mortgage Loan Insurance is used to finance an Energy-Efficient Homes.

Standard Premium Rate Chart
LTV Ratio
Premium Rate
Top-Up Premium
Includes the Following Products*
Up to 65%
0.60%
0.60%
65.01% - 75%
0.75%
2.60%
75.01% - 80%
1.25%
3.15%
80.01% - 85%
1.80%
4.00%
85.01% - 90%
2.40%
4.90%
90.01% - 95.00
3.60%
5.65%
Homebuyer 95 Program
Cash-Out Refinance Program (max. 80% LTV)
Cashback Equity Program / Borrowed Down Program
Family Plan Program
Progress Advance Program
New to Canada Program
Purchase Plus Improvements Program
Vacation / Secondary Home Program (Type A)

LTV ≤ 80% - A.25% premium surcharge will be applied for every 5 years of amortization beyond the traditional 25-year mortgage amortization period.

For Cashback Equity / Borrowed Down Program Program (LTV 90.01 - 95%) the standard premium rate is 3.85% and the premium for portability / top-up is 5.65%.

Business For Self (Alt-A) Program
LTV Ratio
Purchase Premium Rate
Refinance Premium Rate
Top-Up Premium
Up to 65%
0.90%
0.90%
1.75%
65.01% - 75%
1.15%
1.15%
3.00%
75.01% - 80%
1.90%
1.90%
4.45%
80.01% - 85%
3.35%
N/A
6.35%
85.01% - 90%
5.45%
N/A
8.05%

LTV ≤ 80% - A.25% premium surcharge will be applied for every 5 years of amortization beyond the traditional 25-year mortgage amortization period.

Vacation / Secondary Homes Program (Type B)
LTV Ratio
Premium Rate
Top-Up Premium
Up to 65%
1.45%
1.45%
65.01% - 75%
1.60%
3.45%
75.01% - 80%
2.00%
4.00%
80.01% - 85%
2.90%
4.90%
85.01% - 90%
3.15%
5.75%

Second Mortgage Program
LTV Ratio
Recommended Credit Scores
Combined 1st & 2nd Loan Amounts
2nd Mortgage
Up to 65%
620
0.60%
0.60%
65.01% - 75%
620
0.75%
2.60%
75.01% - 80%
620
1.25%
3.15%
80.01% - 85%
620
1.80%
4.00%
85.01% - 90%
660
2.40%
4.90%
90.01% - 95%
700
3.60%
5.65%

LTV ≤ 80% - A.25% premium surcharge will be applied for every 5 years of amortization beyond the traditional 25-year mortgage amortization period.

For premium payable will be the lesser of the premium as a % of the combined 1st and 2nd mortgage loans, or the top-up premium as a % of the 2nd loan amount only.


Investment Property Program
LTV Ratio
Premium Rate
Top-Up Rate
Up to 65%
1.45%
3.15%
65.01% - 75%
2.00%
3.45%
75.01% - 80%
2.90%
4.30%

LTV ≤ 80% - A.25% premium surcharge will be applied for every 5 years of amortization beyond the traditional 25-year mortgage amortization period.

Note: The insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage.
To calculate the premium, multiply the mortgage amount by the premium rate.

Getting a mortgage pre-approval is important for many reasons:
1. It is important to know what purchase price you are qualified for before you go shopping for a home so that you are shopping in the right price range.

2. You need to ensure that you can comfortably afford not only your mortgage payments but all of the other costs of owning a home such as property taxes and utility bills. If you have not owned a home before, these amounts may be a bit surprising. Your mortgage professional will help you take a look at the entire picture.

3. You need to ensure that you will qualify for a mortgage based on the lenders criteria. If there are issues, it is better to discover them at pre-approval stage so that you and your mortgage professional can work on fixing those issues prior to your search for a home. If you are not able to qualify for a mortgage at this time, we can assist you in taking the steps necessary to qualify for a mortgage in the future.

Once I am pre-approved for a mortgage, I will have no problem obtaining a mortgage, right?
It is important to note that a pre-approval qualifies you as the applicant. Your mortgage professional will have confirmed your income, credit and down-payment at this stage. However, we are not able to pre-approve the property you will be purchasing. This is still subject to lender/insurer approval. Therefore, it is important that you always put a "subject to financing" condition on your offer to purchase. Your real estate agent will assist you in writing the offer to purchase. Also, a pre-approval is only valid if there is no material change in your financial situation. If something has changed since you received your pre-approval (i.e. changed jobs, acquired new debt etc), please contact your mortgage professional so that they can review your file.

What happens when I find a home?
Once you find a home, you and your real estate agent will write an offer to purchase. Once the negotiations have been completed, a copy of the offer to purchase and property highlight sheet is forwarded to your mortgage broker. They then submit the mortgage for final approval to the lender. Once the lender/insurer approval has been obtained, the lender will send a mortgage commitment to your mortgage broker outlining the details of the approval along with any paperwork that may still be required. Your mortgage broker will then contact you to go over the approval and ask you for the paperwork required to complete the mortgage file. Once the paperwork has been received and approved by the lender, your mortgage file will be complete and you can remove your "subject to financing" condition on your offer to purchase.

Once you have removed all of your other conditions, such as "subject to home inspection", then you have purchased your home! Your next step will be to go to your lawyers to sign the legal paperwork required in order to complete your purchase. You should expect to go to the lawyers approximately 10 days prior to the possession date. When you go to your lawyers, you will be expected to bring the remaining down-payment and closing costs. These funds must be in the form of a certified cheque or draft. Once you have completed the paperwork at the lawyers, you will then wait to take possession of your home on the possession date negotiated.

 
 
 
 
 
Get Mortgage Answers Today
Call Deborah Lazareff today 403-852-2556