There are a wide range of financial institutions that are involved in the mortgage industry in Canada. Some of these include:

• Chartered Banks, Loan Corporations
• Trust Companies, Credit Unions
  
• Finance Companies, Pension Funds
• Life Insurance Companies, Private Individuals

Dale and CaroleAnn will search the market and find the mortgage lender and product that’s right for you!

Although you are not required to have life, critical illness or disability insurance a mortgage is a large debt and should be life insured, for your family's peace of mind. There are several sources for mortgage life insurance; Mortgage Intelligence offers an excellent product called “iprotect”, your lender may offer mortgage insurance and you may want to check with your insurance broker as well.

For most people our services are free. We receive our fee from the lender providing your mortgage. This fee does not increase the cost of the mortgage - find out for yourself by checking our rates.

A broker fee is only charged for some commercial mortgages and when acquiring a private mortgage loan.

Usually the shorter the term the lower the rate. However many people prefer the comfort of a longer-term mortgage. This is another area where Dale and CaroleAnn will show you how different terms can affect you financially.

For more information see our Resource & Information.

The amortization period has a dramatic effect on the amount of interest paid over the length of the mortgage. Consider the example of a $150,000 mortgage with an interest rate of 6.20%

• With a 25 year amortization the monthly payments are $977.61
• With a 20 year amortization the monthly payments are only increased by $107.57 to $1085.18. The savings in interest would be $32,843.40
• With a 15 year amortization the monthly payments are increased by only $298.03 to $1,275.64. The savings in interest would be $63,669.38

* The example assumes the interest rate will remain constant through the whole amortization period.

Call us and we will run a scenario with your mortgage to show you how much interest you can save.

Most mortgages have very flexible payment alternatives. Weekly, bi-weekly, or monthly payments are most common. These choices also have an effect on the overall interest payments.

Consider the example of a $150,000 mortgage with an interest rate of 6.20% over a 5 year term.

	Payment Remaining	Balance at end of term
Weekly	$244.40	$129,285.80
Bi-weekly	$488.81	$129,327.89
Monthly	$977.61	$135,132.08

Each purchaser may borrow up to $25,000 from their RRSP under the Home Buyers’ Plan. (The funds must have been in the RRSP for at least 90 days prior to withdrawal to be eligible under the program)

Provided you buy or build a qualifying home and meet all of the conditions for making a withdrawal under the Home Buyers’ Plan, you can use the particular funds you withdrew under the Home Buyers’ Plan for other purposes. (Not only down payment and closing cost, but for any other purpose you choose.)

This program is available to the first time home buyer only. (You are considered a first time home buyer if, at any time during the period beginning January 1, 1995 and ending 31 days prior to your withdrawal from your RRSP, you did not own a home.

This information is current throughout 1999 and the program has been extended indefinitely.

Repayment of the funds back to your RRSP can be made over 15 years. (The repayment period starts the 1st full year following the year of withdrawal)

If the amount is not repaid in a year, that year’s repayment amount will be added to your income and taxed.

In order for the home to qualify it must be located in Canada and intended to be used as your principal residence.

If you have any questions about the HBP program you can call the General Enquiries section of your local tax services office. You can find the address and telephone number listed under “Revenue Canada” in the Government of Canada section of your telephone book or go to http://www.cra-arc.gc.ca and reference the Homebuyer's Plan.

If you use a telecommunication device for the deaf (TDD), you can get tax information by calling the toll-free, bilingual TDD enquiry service at: 1-800-665-0354

If you are applying for a pre-approved mortgage, have the following information ready for us:

• Have your employer give you a letter of employment on company letterhead outlining your name, position, gross annual income, and number of years employed with the company. A recent pay stub, the most recent Notice of Assessment (NOA) or most recent T4 will be acceptable.
• If you are self-employed, you may need three years financial statements, and tax returns (together with official assessment from Revenue Canada).
• Social Insurance Numbers.
• At least 3 years history of residences and employers.
• Know your banking information (i.e. institutions name, address, type of accounts, account numbers)
• Know your assets and their value (i.e. cash amounts, stocks, bonds, RRSPs, car).
• Know your liabilities (i.e. car loan, credit card balances).
• Also, be sure and advise us about any past credit problems you may have had.
• Finally, write down a list of questions you would like to have answered.

Simply fill in an online application.

If there is ‘one’ thing that causes problems which may delay the closing of your house, it’s verification of the down payment; here’s why:

To meet the requirements of Canada Mortgage and Housing Corporation, Genworth or other mortgage insurers and the major lending institutions, on or before the issuance of a lending commitment you will be asked to provide "confirmation of down payment" from non-borrowed funds in one or more of the following forms.

• Down payment from the sale of an existing property: You will be required to provide a copy of the unconditional "Purchase and Sale Agreement" on your existing property. This needs to be accompanied by a copy of the statement of "Mortgage Balance" on any mortgages presently held against the property. The difference between the sale price and the mortgages owing will substantiate the funds available for your down payment.

• Down payment from a gift: All or part of the minimum equity requirement may be provided by way of a financial gift, as long as all of the following conditions are met:
  1. the donor is an Immediate relative of the borrower;
  2. the approved lender has verified that the money is a genuine gift; and
  3. the approved lender has verified that the funds are in the borrower’s possession prior to the time of the application to CMHC or other insurers for mortgage loan insurance.

• The approved lender will verify the authenticity of the gift by obtaining a written confirmation, signed by the donor and the borrower, which will include the following points:
  1. the money is a genuine gift from the donor and does not ever have to be repaid;
  2. no part of the financial gift is being provided by any third party having any interest (direct or indirect in the sale of the subject property)

The approved lender is not required to forward this confirmation to CMHC, but is expected to retain the Information in its paper or electronic loan record.

• Down payment from your own resources: You must supply verification satisfactory to CMHC or other insurers and the lender of accumulated savings from non-borrowed funds. This may be in the form of a copy of your bank book confirming a balance equivalent to your down payment including the amount of deposit confirming the savings of said amount for a period of not less than 3 months. Should a substantial deposit have been made recently, the source of such funds, i.e. Bonds, Stocks, G.I.C.’s or RRSP receipts will also be required.

• To avoid any delay in funding your transaction we suggest that you provide a form of the above noted confirmation at least 14 days prior to your closing date.

First time homebuyers may be eligible for a refund of all or part of the tax payable up to a maximum of $2000. Refunds may be claimed at time of registration or claimed directly from the Ministry of Revenue. Applications for a refund must be made within 18 months after the date of the transfer. For more information visit http://www.rev.gov.on.ca/en/refund/newhome/

Land Transfer tax is calculated on a sliding scale of percentages based on your real estate (subject property) value. To calculate:

• .5% x the first $55,000 of subject property value
• 1.0% x the value between $55,000 and $250,000
• 1.5% x the value above $250,000
• 2.0% x the value above $400,000 is the subject property is considered to be a single-family residence or duplex.

For an example, the land transfer tax for a single-family residence that sells for $410,000 would be calculated as follows:

• .5% x the first $55,000 = $275
• 1.0% x $195,000 = $1950
• 1.5% x $150,000 = $2250
• 2.0% x 10,000 = $200

$275 + $1950 + $2250 + $200 = $4675 land transfer tax on a $410,000 single-family residence in Ontario.

It is a CMHC program to help home owners and home buyers improve their subject properties and here are some of the features:

• Available for new home construction and purchase or refinance with improvements.
• CMHC-insured advances during construction or improvement period with flexible advancing options to meet financing needs
• Loan-to-Value (LTV) ratios for purchase transactions: up to 95% for 1–2 unit and 90% for 3-4 unit owner-occupied properties based on as-improved value
• LTV ratio for refinance transactions: up to 90% for 1-4 unit owner- occupied properties
• No additional fees or premiums for progress advances

Each lenders “plus improvement” plan may vary.

To avoid any surprises on closing, a good rule of thumb is to set aside an amount equal to 2-3% of the purchase price (most lenders will look for proof that you have a minimum of 1.5% for closing costs) to cover expenses like these:

The Offer

• The Deposit: Part of your down payment, a deposit is due upon acceptance of your offer.

Prior to Closing

• Home Inspection: Prepared by a qualified inspector to assess the property for defects and poor maintenance.
• Appraisal: Prepared by an appraiser chosen by the lender, by CMHC or other mortgage insurers.

Closing Costs

• Legal Fee/Disbursements: Your lawyer will quote his fee for closing the purchase and mortgage(s) plus an approximation for his disbursements, which includes registration fees, courier costs, photocopies, etc. Ask for an estimate.
• Land Transfer Tax: See the chart enclosed in this package to calculate the Land Transfer Tax which is due on closing and reflected in the “Statement of Adjustments” which your lawyer prepares prior to closing day.
• Interest Adjustment: Monthly mortgage payments are due on the first of the month. Unless the closing date is the first of the month, you must prepay the amount of the interest accruing up to the 1st day of the following month, the Interest Adjustment Date.
• CMHC/Genworth & PST: If your mortgage is insured by CMHC or Genworth the insurance premium will usually be added to the mortgage so it is not a cash requirement on closing. However in Ontario, the premium is subject to 8% PST, and the tax must be paid on closing.
• Prepaid Expenses: If the vendor has prepaid any other expenses such as utilities, water and sewage taxes, oil in tank or taxes, he must be compensated. This will be reflected in the Statement of Adjustments.
• Property Tax Hold-back: If the lender is collecting and paying property taxes you may be required to pay to the lender an amount to ensure sufficient funds are available to pay the next installment of property taxes when due.
• Other Fees: When arranging a private mortgage or some commercial mortgages we will charge a broker fee. If so, these costs will be disclosed to you upfront and again at the time the Disclosure Statement is issued to you. Most of the time our fees are paid to us by the lender.