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- How much can I afford to pay for a home?
- Should I have a home inspection and what is it?
- What minimum down payment is needed to buy a home?
- What is an insured mortgage?
- What is a high-ratio mortgage?
- What is a conventional mortgage?
- Why use an CMI Mortgage Specialist?
- How much will it cost to use an CMI Mortgage Specialist?
- Is applying online secure?
- Does paying my mortgage bi-weekly really save money or reduce my amortization?
- Does bankruptcy affect my ability to qualify for a mortgage?
- Will child support and alimony affect my qualification?
- Can I get a mortgage to purchase a home and make improvements?
- Can I use gift funds as a down payment?
- What is a pre-approved mortgage and how do I get one?
- Is it necessary to wait for my mortgage to mature?
How much can
I afford to pay for a home?
To determine 'affordability' your CMI
Mortgage Specialist 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, they will then 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.
Second, your CMI Mortgage
Specialist will 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.
In addition to considering what the ratios say you can afford, make sure you
calculate how much you think you can afford. If the payment amount you are comfortable
with is less than 32% of your income you may want to settle for the lower amount
rather than stretch yourself financially. Make sure you don't leave yourself
house poor. Structure your payments so that you can still afford simple luxuries.
To calculate how much of a mortgage you qualify for contact an CMI
Mortgage Specialist. Call 604-783-6626 or click
here to locate an CMI
Specialist.
Should I have a home inspection and
what is it?
A home inspection is a visual examination of the property to determine the
overall condition of the home. In the process, the inspector should be checking
all major components (roofs, ceilings, walls, floors, foundations, crawl spaces,
attics, retaining walls, etc.) and systems (electrical, heating, plumbing,
drainage, exterior weather proofing, etc.). The results of the inspection should
be provided to the purchaser in written form, in detail, generally within 24
hours of the inspection.
A home inspection helps remove a number of unknowns and increases the likelihood
of a successful purchase.
What minimum down payment is needed to
buy a home?
A minimum down payment of 5% is required to purchase a home, subject to certain
maximum price restrictions. For instance, in the Greater Vancouver Area the maximum
purchase price with 5% down is $300,000. Any purchase price in excess of $300,000
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. Where
the Mortgage Loan Insurance is provided by GE Capital (GE),
the gift money is not required to be in your possession until the closing date.
Mortgages with less than 25% down must have Mortgage Loan Insurance provided
by either CMHC or GE.
What
is an insured mortgage?
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 the Bank Act 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.
What
is a high-ratio mortgage?
A High-Ratio mortgage is one where the amount to be borrowed by way of a mortgage
is greater than 75% of the purchase price, or the appraised value, whichever
is less. High-Ratio mortgages generally require Mortgage Loan Insurance provided
by either Canada Mortgage and Housing Corporation
(CMHC)
or GE Capital (GE), a private Insurer.
The Mortgage Loan Insurance premium is paid to CMHC or GE and protects the Lender
in the event the mortgage is not repaid and the bank has to take back the property.
The benefit to the borrower is that it allows them to purchase a home with less
than 25% down payment. The insurance premium is paid by the borrower and can
be added directly onto the mortgage.
Mortgage Loan Insurance premiums range from .50% to 3.75% of the mortgage amount
and are calculated based on the overall loan to value. For instance, borrowers
with a 5% down payment, a loan to value of 95%, would pay a premium of 3.75%
while those with a 20% down payment, a loan to value of 80%, would pay an insurance
premium of 1.25%.
What is a conventional mortgage?
A conventional mortgage is usually one where the down payment is equal to 25% or more of the purchase price(or appraised value if lower), a loan to value of or less than 75%, and does not normally require Mortgage Loan Insurance.
Why should I use an CMI Mortgage Specialist?
CMI has a stellar reputation
in the industry and our Best
Deal Philosophy is our guarantee
of excellent service to you.
CMI Mortgage Specialists are able to negotiate on your behalf, structuring your mortgage to meet the criteria of the lenders, and therefore getting a mortgage solution that works for you. Remember an CMI Mortgage Specialist works for you!
Financial
Institutions can only offer their own products
to the public through their sales force.
As a result, they are not able to provide
unbiased advice or selection since by doing
so they risk losing your mortgage to a company
whose product may provide more value to you. CMI
Mortgage Specialists on the other
hand, offer a wide variety of mortgage products
and services as they deal with many lenders,
not just one. Because of this they are able
to search for product from a variety of lenders,
including banks, trust companies, insurance
companies, credit unions and private lenders,
for the one that offers the best product,
rate and terms for your particular needs.
Thus, they can be totally objective in their
recommendations to you.
Institutional lenders in order to gain market share from Mortgage Brokerage
companies and individual brokers, pay a finder's fee for referred business.
Due to the volume of business generated by CMI and the excellent
reputation of its Mortgage Consultants, fees are paid by the lender and CMI
Mortgage Specialists receive fast approvals in order to gain their
business. This allows the CMI Mortgage Specialist to shop
among the various financial institutions and private lenders for the mortgage
rate and product that best suits the needs of the client and, in lmost all
cases, at no cost to you the client.
When you deal directly with a Financial Institution and your mortgage is declined,
for whatever reason, you must begin the application process all over again
with another Lender. When you deal with an CMI Mortgage Specialist the
application can quickly be redirected to another Lender, or several other lenders,
for consideration.
For more information on how CMI can help you, contact an CMI
Mortgage Specialist today!
How much does it cost to use an CMI Mortgage Specialist?
The vast majority of mortgage clients do not pay a fee for the services of an CMI Mortgage Specialist. To gain a larger market share, the majority of financial institutions pay a finder's fee to Mortgage Consultants and at the same time offer them their best discounted rates and fast approvals in order to gain their business. This allows the Mortgage Consultant to shop among the various financial institutions for the mortgage rate and product that best suits the needs of the client and, in almost all cases, at no cost to the client.
In situations where traditional lenders will not approve a mortgage because of poor credit, and where the application must be placed with a private or non-traditional lender, a brokerage fee may be charged to the client. This cost must always be disclosed to the client up front and must be authorized in writing by the client before it can be charged.
Is
Applying Online secure?
Very.
Your private personal and financial information
is not sent anywhere without your express permission. Our
Apply Online form is sent directly
to our email box. And all information you provide
on line is encrypted for the greatest possible
security.
Does paying my mortgage bi-weekly really
save money or reduce my amortization?
Payment frequency is not the major factor in reducing the amortization period
of your mortgage. Principal reduction is! But what
about all the talk of bi-weekly payments taking five years off your amortization
period. Although you will save some interest making your payment bi-weekly,
ultimately it is the fact that your total payments each year are higher that
results in the significant reduction in amortization. For instance, when a
client chooses a bi-weekly payment of $500 over a monthly payment of $1000,
in fact they are choosing to pay an extra $1000 annually. In most cases a bi-weekly
payment is simply a monthly payment divided by two. That means that instead
of paying $12,000 in monthly payments, you are now paying $13,000 in bi-weekly
payments. That extra $1000 is what ultimately cuts the years off your mortgage.
Give us a call and we would be happy to go through the numbers with you personally. For more information on how CMI can help you, contact an CMI Mortgage Specialist today!
Does
bankruptcy affect my ability to qualify for a
mortgage?
Depending on the circumstances surrounding your bankruptcy, generally some lenders
would consider providing mortgage financing. If you are a previously discharged
bankrupt the best way to determine whether or not you qualify at this time is
to discuss your situation with an CMI
Mortgage Specialist. CMI has
many lenders to approach based on your circumstances. For more information on
how CMI can
help you, contact an CMI
Mortgage Specialist today!
How
will child support and alimony affect my mortgage
qualification?
Where Child Support and Alimony are paid by you to another person, generally
the amount paid out is deducted from your total income before determining the
size of mortgage you will qualify for.
Where Child Support and Alimony are received by you from another person, generally
the amount paid may be added to your total income before determining the size
of mortgage you will qualify for, provided proof of regular receipt is available
for a period of time determined by the lender.
Can I get a mortgage to purchase a home and make improvements?
Subject to qualification, yes. In fact, even purchasers with 5% down may qualify to buy a home and make improvements to it. For high-ratio financing, both Canada Mortgage and Housing Corporation and GE Capital, insured mortgages are available to cover the purchase price of a home as well as an amount to pay for immediate major renovations or improvements that the purchaser may wish to make to the property. This option eliminates the need to finance the renovations or improvements separately. Some conditions apply.
Where the improvements are cosmetic, the Mortgage Loan Insurance Premium is unchanged from the standard schedule. Where the improvements are deemed to be structural, the Mortgage Loan Insurance Premium is increased by .50% over the standard schedule. For information on Mortgage Loan Insurance Premiums see High-Ratio Home Mortgage Financing.
Can
I use gift funds as a down payment?
Most lenders will accept down payment funds that are a gift from family as an
acceptable down payment. A gift letter signed by the donor is usually required
to confirm that the funds are a true gift and not a loan. Where the mortgage
requires Mortgage Loan Insurance, Canada Mortgage and Housing Corporation requires
the gift money to be in the purchaser's possession before the application is
sent in to them for approval. Where Mortgage Loan Insurance is provided by GE
Capital this is not a requirement. See 'What
is Mortgage Loan Insurance?' for further information.
What
is a pre-approved mortgage and how do I get one?
A Pre-approved Mortgage provides an interest rate guarantee from a lender for
a specified period of time (usually 60 to 90 days) and for a set amount of money.
The pre-approval is calculated based on information provided by you and is generally
subject to certain conditions being met before the mortgage is finalized. Conditions
would usually be things like 'written employment and income confirmation' and
'down payment from your own resources', for example.
The easiest way to get a Mortgage Pre-approval is by calling your CMI
Mortgage Specialist. You will be asked some questions to determine
your financial situation and then your CMI
Mortgage Specialist will calculate the size of mortgage you qualify
for, using this information. With your authorization, they will then proceed
with arranging a Pre-approved Mortgage for you if you are planning to buy property
in the near future. Most successful Real Estate Professionals will want to ensure
you have a Pre-approved Mortgage in place before they take you out looking for
a home. This is to ensure that they are showing you property within your affordable
price range.
In summary, a Pre-approved Mortgage is one of the first steps a Home Buyer should
take before beginning the buying process. Contact an CMI
Mortgage Specialist for further information.
Is it necessary to wait for my mortgage
to mature?
No, have an CMI Mortgage Specialist begin shopping around for
an interest rate at least 90 days before your mortgage matures. Lenders will
often guarantee an interest rate to you as much as 90 days before your mortgage
matures. And, as long as you are not increasing your mortgage, they will cover
the costs of transferring your mortgage too. This means a rate promised well
in advance of your maturity date, thus eliminating any worries of higher rates.
And if rates drop before the actual maturity rate, the new lender will usually
adjust your interest rate lower as well.
Most lenders send out their mortgage renewal notices offering existing clients
their posted interest rates. The rate you are being offered is usually not the
best one. Always ask an CMI Mortgage Specialist to
investigate the possibility of a lower interest rate with the lender or another
lender. If you don't you may end up paying a much higher interest rate on your
renewing mortgage than you need to.
Here are some of the lenders that we negotiate with:
Click
here to see the best rates!
Our Commitment to Service Excellence
“As
the leading independent mortgage broker in Canada our
reputation is of critical importance to us.
We provide our Invis mortgage consultants with comprehensive training and support
to ensure we are the best in the business.
If your experience as our customer does not meet your expectations please contact
us so that we may address your concerns.”
