Top 5 most common mortgage questions
How much downpayment is required?
The minimum downpayment required for an insured mortgages is 5%. If you are buying a $300,000 purchase price, your minimum downpayment would be $15,000. This can be borrowed, gifted, saved or withdrawn from your RRSP's. NO, there is no such thing as 100% downpayment programs.
01
I won't qualify due to my credit score
MYTH! The minimum credit score required to qualify for a mortgage is 600. The score you may see pulling your own score via Equifax could be different than what WE see at the lenders. Many lending institutions have their OWN minimum scores as well. Credit score requirements for different mortgage programs are different. Mortgage programs could be flex down, new to Canada, low doc, self employed, etc.
Most important is to ensure you are working with a broker who can see your score, assess your unique situation and place you in the right program.
02
DID YOU KNOW?
Costs such as legal fees and appraisals can be covered with some lenders. Money Savings!
What is your lowest rate?
Tell me what rate you deserve? That will be my answer. Getting the lowest rate doesn't always mean the best program or even a program you qualify for. As mortgage brokers, we get "rate specials". Specials might only be for those closing their mortgage in 30, 45, or 90 day or only high ratio (ie insured) or no rentals, self employed, transfers or borrowed downpayments. Lenders put out rate specials all the time, it doesn't mean it is the low rate program that will fit you. If you get a "low rate" no frills mortgage, you could be in a world of hurt with penalties IF you had to break that mortgage contract for any reason, such as divorce, moving, or needing to pay-off debts. Great article to read.
I would less concerned about rate and more interested in how this mortgage will not negatively and financially impact you over the next 5-10 years. Not to be a hardass here, however, if the difference of 2.99% and 2.89% is your deciding factor in your budget, then you are likely not ready to have the financial obligations and costs of a mortgage.
03
DID YOU KNOW?
Mortgage Insurance is NOT mandatory. Don't let your bank tell you otherwise.
04
Can I build my renovations into my mortgage?
Absolutely! Only on a new mortgage contract such as purchase or refinance (not a renewal). Insurers will allow up to $40,000 worth or renos to be approved. See this blog post for details.
Why is a broker different than me just going to my bank?
Short answer...If you go to a Ford dealership for a new car, you can't get a Mercedes. You will have to hop from one dealership to another looking for the right perks, price and lease/own finance programs. It's the same for mortgages. As mortgage brokers, we take ONE application, discuss your family situation and then give you a few options on which lenders and programs will fit your perfectly.
05
DID YOU KNOW?
Mortgage Brokers are FREE. We are paid by the lending instition that your mortgage is placed with.