Frequently Asked Questions

What is a home inspection, and should I have one done?

A home inspection is a visual examination of the property to determine the overall condition of the home. 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 weatherproofing, etc.). Generally you will receive written results from the inspector within 24 hours.


A pre-purchase home inspection can add peace of mind and make a difficult decision much easier. It may indicate that the home needs major structural repairs, which can be factored into your buying decision. A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.


What is mortgage loan insurance?

Mortgage loan insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, Canada Guaranty Mortgage Insurance Company and Genworth Mortgage Insurance Company. This insurance is required by law to insure lenders against default on mortgages with a loan-to-value ratio greater than 80%.


How does bankruptcy affect qualification for a mortgage?

Depending on the circumstances surrounding your bankruptcy, generally some lenders would consider providing mortgage financing after credit has been re-established for at least 2 years after discharge. If you would like to find out if you can qualify, please contact one of our mortgage specialists.


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. Gifted down payments are not allowed in all mortgage programs.


What is a pre-approved mortgage?

A pre-approved mortgage provides an interest rate guarantee from a lender for a specified period of time and for a set mortgage amount. The pre-approval is calculated based on information provided by you (the borrower) and is generally subject to certain conditions being met before the mortgage is finalized. At no point should a pre-approval be considered to be an unconditional mortgage approval.


How can you pay off your mortgage sooner?

There are many different ways to reduce the number of years it will take to pay down your mortgage. You will enjoy significant savings by:

  • Selecting a non-monthly or accelerated payment schedule
  • Increasing your payment frequency schedule
  • Making principal pre-payments
  • Making double-up payments
  • Selecting a shorter amortization


How can you use your RRSP to help you buy your first home?

With the federal government's First Time Home Buyers' Plan, you can use up to $20,000 in Registered Retirement Savings Plan (RRSP) savings ($40,000 for a couple) to help pay for your down payment on your first home. You then have 15 years to repay your RRSP. To qualify, the RRSP funds you're using must be on deposit for at least 90 days. You'll also need a signed agreement to buy a qualifying home.


How much of a mortgage can I afford?

Please see our mortgage calculator or call one of our mortgage professionals for assistance.


How much do I need for a down payment?

Some lenders are currently offering up to 95% financing, which means you will need a 5% down payment to purchase your new home. For details on how to qualify, please contact one of our mortgage professionals. Most lenders offer up to 96% financing on a mortgage-insured basis and will require proof that an additional 1.5% of the purchase price is available for closing costs, as well as the 5% down payment.


In certain circumstances, it is possible to finance 100% of the purchase with excellent credit, positive net worth, and low debt servicing on approved credit by the lender and the mortgage insurance company. The cash requirement of 1.5% of the purchase price for closing costs would still apply.


What are closing costs?

On the day one actually purchases a new home they are required to pay certain costs associated with this endeavor. In addition to your down payment, additional costs may include pre-paid property taxes, land transfer taxes, legal fees and homeowner's insurance premiums; as well as other fees and moving costs.


What happens if I'm not satisfied with a mortgage offer?

Don't accept it. You have no obligation to accept any of the offers that are made to you by any lenders. Even if you accept the mortgage loan offer, there is generally no financial obligation on your part to take the mortgage.


How can I save money on my mortgage?

Lower interest rates, accelerated mortgage payments and periodic pre-payments on your mortgage will all save you money on your overall mortgage. Please consult one of our mortgage experts to see what your options are. Remember, don’t sign your mortgage approval from your existing lender without talking to us first.


Increased Payment Frequency: Instead of paying monthly, consider paying bi-weekly. This simple step is very feasible for most people who are paid bi-weekly. It can cut your mortgage amortization by up to five years, and can save you thousands of dollars. This option is not magic. It is a simple way of increasing your annual mortgage payments without significantly affecting your cash flow.


Pre-pay your mortgage as often as you possibly can. Every pre-payment made means you are no longer paying interest on the moneys pre-paid. You can also use your RRSP tax refund to make an annual pre-payment on your mortgage.


What is title insurance?

The title insurance policy states that if the status of the title to a parcel of real property is other than that represented, and if the insured suffers a loss as a result of title defect, the insurer will reimburse the insured for that loss and any related legal expenses, up to the face amount of the policy.


Title insurance differs significantly from other forms of insurance. While the function of most other forms of insurance is to guard against future events (such as death or accidents or in the case of property, fire or flood), the primary purpose of title insurance is to eliminate risks and prevent losses caused by events that have happened in the past.

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