Frequently Asked Mortgage Related Questions:

Why use a Mortgage Broker?

• Receive professional negotiating expertise.
• Convenience and access to numerous new mortgage products.
• Unbiased knowledgeable advice.
• Access to unadvertised rates.
• I work for the YOU, not the bank.

What is the Home-buyers plan?

• Is a Federal Government Program that allows home-buyers to use $25,000 for each purchaser from his/her own RRSP.
• You must not have owned a principal residence within last 5 years.
• You must intend to occupy your home as a principal residence.
• Minimum repayment is 15 equal annual instalments. This schedule can be accelerated.
• The funds to be withdrawn must have been invested into the RRAP for a minimum of 90 days prior to withdrawal.
• You must complete a Form T-1036.

Do I qualify for the 5% down payment program?

• The home must be located in Canada and is to be occupied as your principal

• residence.

• You have from your own resources a down payment of at least 5% of the purchase price of home.
• Your mortgage payment must not exceed 32% of your gross household income. This includes payment of principal + interest + property taxes + heat + condo fees (if applicable).
• You must be able to cover closing costs equivalent to at least 1.5% of the purchase price.
• You meet the lender’s eligibility requirements regarding income, employment and credit worthiness.

What should I expect for closing costs with a traditional lender? (Closing costs are approximately 1.5% of the Purchase Price.)

The following are approximate costs:

• Appraisal Fee: $200.00
• CMHC FEE (if applicable): $165.00
• Survey Certificate (if applicable): $250.00
• Home Inspection: $250.00
• Legal Fees (approx.): $750.00
• Tax Adjustment (if applicable)
• Interest Adjustment (if applicable)
• Property Transfer Tax (if applicable)
• What type of income proof do I need to provide?

Salaried Employees

• Job Letter- Lenders use 100% of the income. Verification is made on company letterhead, signed by appropriate individual. If you are a recent hire, the letter should confirm that probation period has passed. Bonuses, car allowances, and other forms of remuneration should be mentioned in letter if applicable.
• Pay Stubs- Many Lenders will also require your most recent pay-stub(s).

Hourly Employees

• Pay Stubs- showing year-to-date income verification

• T4’s and/or Personal Tax Returns (T-1 Generals)- 3 years to take an average
• Notice of Assessment (NOA)- most recent to confirm no taxes owed.

Commission Income

• T-4’s and/or Personal Tax Returns – 3 years to take an average
• Job Letter- confirming position
• Notice of Assessments (NOA)- optional depending on Lender

Self-Employed

• Financial Statements of Company- 3 years average net income used. Depending on Lenders policies, The add-back of various personal expenses run through company may or may not be allowed. (examples of allowable add-backs- Depreciation, Amortization, Capital Cost Allowance).
• NOA’s (Personal Notice of Assessments) – 2 year history
• Personal Tax Returns (T-1 Generals showing personal net income) – 2 year history

Note:

• Overtime will be used if there is a proven track record. 3 years evidence (T-4’s)
• Bonuses- Once again, a 3 year track record required
• Part-time job- should be in place for a couple of years before using additional income
• Tips- Generally not recognized unless declared
• Car Allowances- Varies from lender to lender
• Alimony and Support- Evidence that payments have been made regularly and a copy of divorce agreement is required. Investment Income – must be received continuously. This source of income is limited to interest, dividends, or some type of ongoing revenue. Capital gains, which result from the liquidation of an asset is a 1 time occurrence and can’t be used.Do not hesitate to call or email with any additional questions.