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FAQ's
- How
much can I afford to pay for a home?
- Should
I have a home inspection and what is it?
- What
minimum down payment is needed to buy a home?
- What
is an insured mortgage?
- What
is a high-ratio mortgage?
- What
is a conventional mortgage?
- Why
use an CMI Mortgage Specialist?
- How
much will it cost to use an CMI Mortgage Specialist?
- Is
applying online secure?
- Does
paying my mortgage bi-weekly really save money
or reduce my amortization?
- Does
bankruptcy affect my ability to qualify for
a mortgage?
- Will
child support and alimony affect my qualification?
- Can
I get a mortgage to purchase a home and make
improvements?
- Can
I use gift funds as a down payment?
- What
is a pre-approved mortgage and how do I get
one?
- Is
it necessary to wait for my mortgage to mature?
How much can I afford to pay for a home?
To determine 'affordability' your CMI
Mortgage Specialist will first need to
know your Taxable Income along with the amount
of any debt outstanding and the monthly payments.
Assuming it is your principal residence you are
purchasing, they will then calculate 32% of your
income for use toward a mortgage payment, property
taxes and heating costs. If applicable, half of
the estimated monthly condominium maintenance
fees will also be included in this calculation.
Second, your CMI Mortgage Specialist will
calculate 40% of your Taxable Income and deduct
all of your monthly debt payments, including car
loans, credit cards, lines of credit payments.
The lesser of the first or second calculation
will be used to help determine how much of your
income may be used towards housing related payments,
including your mortgage payment. These calculations
are based on Lenders' usual guidelines.
In addition to considering what the ratios say
you can afford, make sure you calculate how much
you think you can afford. If the payment amount
you are comfortable with is less than 32% of your
income you may want to settle for the lower amount
rather than stretch yourself financially. Make
sure you don't leave yourself house poor. Structure
your payments so that you can still afford simple
luxuries.
To calculate how much of a mortgage you qualify
for contact an CMI
Mortgage Specialist. Call 604-783-6626
or click
here to locate an CMI Specialist.
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Should I have a home inspection and what
is it?
A home inspection is a visual examination of
the property to determine the overall condition
of the home. In the process, 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 weather
proofing, etc.). The results of the inspection
should be provided to the purchaser in written
form, in detail, generally within 24 hours of
the inspection.
A home inspection helps remove a number of unknowns
and increases the likelihood of a successful
purchase.
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What minimum down payment is needed to
buy a home?
A minimum down payment of 5% is required to purchase
a home, subject to certain maximum price restrictions.
For instance, in the Greater Vancouver Area the
maximum purchase price with 5% down is $300,000.
Any purchase price in excess of $300,000 requires
a minimum of 10% as a down payment. In addition
to the down payment, you must also be able to
show that you can cover the applicable closing
costs (i.e. legal fees and disbursements, appraisal
fees and a survey certificate,
where applicable).
Regardless of the amount of your down payment,
at least 5% of it must be from your own cash resources
or a gift from a family member. It cannot be borrowed.
Lenders will generally accept a gift from a family
member as an acceptable down payment provided
a letter stating it is a true gift, not a loan,
is signed by the donor. Where the Mortgage Loan
Insurance is provided by Canada Mortgage and Housing
Corporation (CMHC), the gift
money must be in the your possession before the
application is sent in to CMHC for approval. Where
the Mortgage Loan Insurance is provided by GE
Capital (GE), the gift money is not required
to be in your possession until the closing date.
Mortgages with less than 25% down must have Mortgage
Loan Insurance provided by either CMHC or GE.
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What is an insured mortgage?
Mortgage Loan Insurance is insurance provided
by Canada Mortgage and Housing Corporation (CMHC),
a crown corporation, and GE
Capital Mortgage Insurance Company, an approved
private corporation. This insurance is required
by the Bank Act to insure lenders against default
on mortgages with a loan to value ratio greater
than 75%. The insurance premiums, ranging from
.50% to 3.75%, are paid by the borrower and can
be added directly onto the mortgage amount.
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What is a high-ratio mortgage?
A High-Ratio mortgage is one where the amount
to be borrowed by way of a mortgage is greater
than 75% of the purchase price, or the appraised
value, whichever is less. High-Ratio mortgages
generally require Mortgage Loan Insurance provided
by either Canada Mortgage and Housing Corporation
(CMHC) or GE Capital (GE),
a private Insurer.
The Mortgage Loan Insurance premium is paid to
CMHC or GE and protects the Lender in the event
the mortgage is not repaid and the bank has to
take back the property. The benefit to the borrower
is that it allows them to purchase a home with
less than 25% down payment. The insurance premium
is paid by the borrower and can be added directly
onto the mortgage.
Mortgage Loan Insurance premiums range from .50%
to 3.75% of the mortgage amount and are calculated
based on the overall loan to value. For instance,
borrowers with a 5% down payment, a loan to value
of 95%, would pay a premium of 3.75% while those
with a 20% down payment, a loan to value of 80%,
would pay an insurance premium of 1.25%.
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What is a conventional mortgage?
A conventional mortgage is usually one where the
down payment is equal to 25% or more of the purchase
price(or appraised value if lower), a loan to
value of or less than 75%, and does not normally
require Mortgage Loan Insurance.
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Why should I use an CMI Mortgage Specialist?
CMI has a stellar reputation
in the industry and our Best
Deal Philosophy is our guarantee
of excellent service to you.
CMI
Mortgage Specialists are able to negotiate
on your behalf, structuring your mortgage to
meet the criteria of the lenders, and therefore
getting a mortgage solution that works for you.
Remember an CMI Mortgage Specialist
works for you!
Financial
Institutions can only offer their own products
to the public through their sales force. As
a result, they are not able to provide unbiased
advice or selection since by doing so they risk
losing your mortgage to a company whose product
may provide more value to you. CMI Mortgage
Specialists on the other hand, offer
a wide variety of mortgage products and services
as they deal with many lenders, not just one.
Because of this they are able to search for
product from a variety of lenders, including
banks, trust companies, insurance companies,
credit unions and private lenders, for the one
that offers the best product, rate and terms
for your particular needs. Thus, they can be
totally objective in their recommendations to
you.
Institutional lenders in order to gain market
share from Mortgage Brokerage companies and
individual brokers, pay a finder's fee for referred
business. Due to the volume of business generated
by CMI and the excellent reputation
of its Mortgage Consultants, fees are paid by
the lender and CMI Mortgage Specialists
receive fast approvals in order to gain their
business. This allows the CMI Mortgage
Specialist to shop among the various
financial institutions and private lenders for
the mortgage rate and product that best suits
the needs of the client and, in lmost all cases,
at no cost to you the client.
When you deal directly with a Financial Institution
and your mortgage is declined, for whatever
reason, you must begin the application process
all over again with another Lender. When you
deal with an CMI Mortgage Specialist
the application can quickly be redirected to
another Lender, or several other lenders, for
consideration.
For more information on how CMI can
help you, contact an CMI
Mortgage Specialist today!
Call
604-783-6626.
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How much does it cost to use an CMI Mortgage
Specialist?
The vast majority of mortgage clients do not pay
a fee for the services of an CMI Mortgage
Specialist. To gain a larger market share,
the majority of financial institutions pay a finder's
fee to Mortgage Consultants and at the same time
offer them their best discounted rates and fast
approvals in order to gain their business. This
allows the Mortgage Consultant to shop among the
various financial institutions for the mortgage
rate and product that best suits the needs of
the client and, in almost all cases, at no cost
to the client.
In situations where traditional lenders will not
approve a mortgage because of poor credit, and
where the application must be placed with a private
or non-traditional lender, a brokerage fee may
be charged to the client. This cost must always
be disclosed to the client up front and must be
authorized in writing by the client before it
can be charged.
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Is Applying Online secure?
Very. Your private personal and financial
information is not sent anywhere without your
express permission. Our
Apply Online form is sent directly to our
email box. And all information you provide on
line is encrypted for the greatest possible security.
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Does paying my mortgage bi-weekly really
save money or reduce my amortization?
Payment frequency is not the major factor in
reducing the amortization
period of your mortgage. Principal
reduction is! But what about all the talk of
bi-weekly payments taking five years off your
amortization period. Although you will save
some interest making your payment bi-weekly,
ultimately it is the fact that your total payments
each year are higher that results in the significant
reduction in amortization. For instance, when
a client chooses a bi-weekly payment of $500
over a monthly payment of $1000, in fact they
are choosing to pay an extra $1000 annually.
In most cases a bi-weekly payment is simply
a monthly payment divided by two. That means
that instead of paying $12,000 in monthly payments,
you are now paying $13,000 in bi-weekly payments.
That extra $1000 is what ultimately cuts the
years off your mortgage.
Give
us a call and we would be happy to go through
the numbers with you personally. For more information
on how CMI can help you, contact
an CMI
Mortgage Specialist today!
Call
604-783-6626. top
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Does bankruptcy affect my ability to qualify
for a mortgage?
Depending on the circumstances surrounding your
bankruptcy, generally some lenders would consider
providing mortgage financing. If you are a previously
discharged bankrupt the best way to determine
whether or not you qualify at this time is to
discuss your situation with an CMI Mortgage
Specialist. CMI has
many lenders to approach based on your circumstances.
For more information on how CMI
can help you, contact an CMI
Mortgage Specialist today! Call
604-783-6626.
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How will child support and alimony affect my
mortgage qualification?
Where Child Support and Alimony are paid by you
to another person, generally the amount paid out
is deducted from your total income before determining
the size of mortgage you will qualify for.
Where Child Support and Alimony are received by
you from another person, generally the amount
paid may be added to your total income before
determining the size of mortgage you will qualify
for, provided proof of regular receipt is available
for a period of time determined by the lender.
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Can I get a mortgage to purchase a home and
make improvements?
Subject to qualification, yes. In fact, even purchasers
with 5% down may qualify to buy a home and make
improvements to it. For high-ratio financing,
both Canada Mortgage and Housing Corporation and
GE Capital, insured
mortgages are available to cover the purchase
price of a home as well as an amount to pay for
immediate major renovations or improvements that
the purchaser may wish to make to the property.
This option eliminates the need to finance the
renovations or improvements separately. Some conditions
apply.
Where the improvements are cosmetic, the Mortgage
Loan Insurance Premium is unchanged from the standard
schedule. Where the improvements are deemed to
be structural, the Mortgage Loan Insurance Premium
is increased by .50% over the standard schedule.
For information on Mortgage Loan Insurance Premiums
see High-Ratio Home Mortgage
Financing.
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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. Where the mortgage requires Mortgage
Loan Insurance, Canada Mortgage and Housing Corporation
requires the gift money to be in the purchaser's
possession before the application is sent in to
them for approval. Where Mortgage Loan Insurance
is provided by GE Capital
this is not a requirement. See 'What
is Mortgage Loan Insurance?' for further information.
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What is a pre-approved mortgage and how
do I get one?
A Pre-approved Mortgage provides an interest rate
guarantee from a lender for a specified period
of time (usually 60 to 90 days) and for a set
amount of money. The pre-approval is calculated
based on information provided by you and is generally
subject to certain conditions being met before
the mortgage is finalized. Conditions would usually
be things like 'written employment and income
confirmation' and 'down payment from your own
resources', for example.
The easiest way to get a Mortgage Pre-approval
is by calling your CMI Mortgage Specialist.
You will be asked some questions to determine
your financial situation and then your CMI
Mortgage Specialist will calculate the
size of mortgage you qualify for, using this information.
With your authorization, they will then proceed
with arranging a Pre-approved Mortgage for you
if you are planning to buy property in the near
future. Most successful Real Estate Professionals
will want to ensure you have a Pre-approved Mortgage
in place before they take you out looking for
a home. This is to ensure that they are showing
you property within your affordable price range.
In summary, a Pre-approved Mortgage is one of
the first steps a Home Buyer should take before
beginning the buying process. Contact an CMI
Mortgage Specialist for further information.
Call Bruce Coleman at 604-688-6002
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Is it necessary to wait for my mortgage
to mature?
No, have an CMI Mortgage Specialist
begin shopping around for an interest rate at
least 90 days before your mortgage matures. Lenders
will often guarantee an interest rate to you as
much as 90 days before your mortgage matures.
And, as long as you are not increasing your mortgage,
they will cover the costs of transferring your
mortgage too. This means a rate promised well
in advance of your maturity date, thus eliminating
any worries of higher rates. And if rates drop
before the actual maturity rate, the new lender
will usually adjust your interest rate lower as
well.
Most lenders send out their mortgage renewal notices
offering existing clients their posted interest
rates. The rate you are being offered is usually
not the best one. Always ask an CMI
Mortgage Specialist to investigate
the possibility of a lower interest rate with
the lender or another lender. If you don't you
may end up paying a much higher interest rate
on your renewing mortgage than you need to.
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