Canadian Mortgage FAQs is collection of questions we are routinely asked throughout the Mortgage Approval process. Don’t hesitate to contact us if you don’t see your question here and we would be happy to answer.
What is the minimum down payment required to buy a house in Canada?
The minimum down payment for a home in Canada is 5% of the purchase price or the appraised value, whichever is less. For homes valued at $500,000 or less, the minimum down payment would be $25,000. For purchase amounts between $500,001 and up to $999,999 the down payment is based on the 5% of the first 500,000 and 10% of the remaining amount up to the maximum.
What kinds of mortgage products are available to Canadian homebuyers?
Canadian homebuyers have access to a variety of mortgage products including fixed-rate, adjustable-rate (ARM) mortgages, and hybrid mortgages which combine both fixed and adjustable rates. Additionally, there are special loan programs such as high-ratio loans, government-insured loans and refinancing options available depending on your financial circumstances.
How do I choose the right mortgage product for my needs? At what point should I see a mortgage broker?
Choosing the right mortgage product can depend on several factors including your budget, how long you plan on staying in your home, and your current financial situation. It’s important to research all available options and speak with a trusted lender to help you determine which product best suits your needs.
Are there different types of interest rates for Canadian mortgages?
Yes. Interest rates for Canadian mortgages can vary depending on the type of product you choose, as well as other personal factors like credit score and income level. Generally speaking, fixed rate mortgages offer more stability while adjustable rate mortgages may provide more flexibility over time but with more risk.
What are pre-approvals and how do they work?
A pre-approval is when a lender assesses an individual’s creditworthiness before they begin shopping for a home loan so that they know how much money they can borrow and what kind of terms they can expect from lenders before making an offer on a property. The pre-approval process requires borrowers to provide detailed financial documents in order to be assessed by the lender before approval can be granted.
Is it better to use a mortgage broker or a bank?
This can depend on the individual’s specific circumstances; however generally speaking going through either a bank or broker will work out similarly in terms of getting access to competitive interest rates if you shop around carefully enough and have good credit history/income level/etc.. Ultimately it’s up to each borrower’s personal preference but using a broker can often times lead to more options when choosing between different mortgage products and lenders overall than just one route alone could provide access too .
What fees are associated with getting approved for a Canadian mortgage loan?
Fees associated with getting approved for a mortgage loan may include appraisal fees (to assess property value) as well as title search fees (to transfer ownership). Other expenses such as closing costs may also apply depending on where you live. These will include legal fees or taxes charged by governments during the transfer process. Make sure you ask about all potential costs upfront so that there are no surprises later on
Can I use rental income towards getting approved for a Canadian mortgage loan?
Yes! Rental income from tenants living within your own residence in a self contained suite can be used. Keep in mind that some restrictions apply based on specific lender policy. Typically, lenders will require proof that rental income prior to approval. Confirmation of rental income proof may be way of current lease/rental agreements. Additionally, an appraiser’s opinion of economic rents may be within lender policy.
Is it possible to get prequalified online when applying for a Canadian Mortgage Loan ?
Absolutely! Our online application form allows potential borrowers to enter their basic information including salary , employment status , assets & liabilities , etc. This information will be used to determine is an applicant is eligible for pre-qualification. However, final approval will come after submitting all necessary documents such as proof of income confirmation & down payment.
Are there any tax benefits with a Mortgage Loan ?
Yes – incentives such as Property Transfer Tax exemptions are available depending upon local jurisdictions & regulations. Additionally, the federal government offers down payment savings plans. The RSP homebuyers purchase plan as well as the recently introduced Tax-Free homebuying savings account. Thus it’s important always consult professional advisors prior making any major decisions involving real estate investments !
Is there penalty for early repayment when it comes to Canadian mortgages?
Yes! In most cases there will be a penalty owing if you pay off your loan before the term maturity. This penalty typically consists of 3 months’ worth interest OR an interest rate differential on fixed rate mortgages. Charges but may vary depending upon lender policies. Always ensure that you are aware what those penalties entail prior making the mortgage decisions.
How does refinancing work when it comes to Canadian mortgages?
Refinancing involves taking out a new loan that replaces your existing one at better terms or interest rates . This allows borrowers to reduce their monthly payments or access cash out equity from their home . There are many refinancing options available. Switching from variable rate loans to fixed rate loans , shortening the amortization period , consolidating high interest debts.