MORTGAGE BROKER AND MORTGAGE RELOCATION SPECIALIST

To determine YOUR MORTGAGE LIMIT you will first need to know your taxable income along with the amount of any debt outstanding and the monthly payments. Assuming it is your principal residence you are purchasing, calculate 32% of your income for use toward a mortgage payment, property taxes and heating costs. If applicable, half of the estimated monthly condominium maintenance fees will also be included in this calculation. 

Next, calculate 40% of your taxable income and deduct all of your monthly debt payments, including car loans, credit cards, lines of credit payments. The lesser of the first or second calculation will be used to help determine how much of your income may be used towards housing related payments, including your mortgage payment. These calculations are based on lenders’ usual guidelines. 

A minimum down payment of 5% is required to purchase a home, subject to certain maximum price restrictions. For instance in some areas the maximum purchase price with 5% down is $250,000. Any purchase price in excess of $250,000 requires a minimum of 10% as a down payment. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable). 

Regardless of the amount of your down payment, at least 5% of it must be from your own cash resources or a gift from a family member. It cannot be borrowed. 

Lenders will generally accept a gift from a family member as an acceptable down payment provided a letter stating it is a true gift, not a loan, is signed by the donor. Where the mortgage loan insurance is provided by Canada Mortgage and Housing Corporation (CMHC), the gift money must be in the your possession before the application is sent in to CMHC for approval. 

Mortgages with less than 25% down must have mortgage loan insurance provided by either CMHC or GE.

Mortgage loan insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, and GE Capital Mortgage Insurance Company, an approved private corporation. This insurance is required by law to insure lenders against default on mortgages with a loan to value ratio greater than 75%. The insurance premiums, ranging from .50% to 3.75%, are paid by the borrower and can be added directly onto the mortgage amount. This is not the same as mortgage life insurance.

10 Reasons to use a Mortgage Broker

• Access to different lenders, banks, trust companies, investors and financial institutions. 
• Fast credit and loan pre-approvals with no cost or obligation. (Some conditions may apply)
• They are experts at matching you with the best-suited mortgage. 
• Get mortgage rates at wholesale, guaranteed up to 120 days. 
• They work for YOU, not the bank. 
• Up-to-date on all the mortgage rates, terms and re-payment options available on the market. 
• They only specialize in mortgages and are knowledgeable on current trends. 
• They increase competition in the market place, thus keeping rates low. 
• They save you time and money! 
• Brokers have vested interest in satisfying your needs since they rely on referrals and repeat business.