Well, right now on a 5-year fixed I have access to a range of rates. Rates are dependent on several things: your credit score, your income and total debt, the size of your mortgage, and perhaps most importantly, whether you are buying a property with mortgage insurance (eg. less than 20% down payment) or whether you are willing to accept “bad fine print and tricks” such as extremely harsh penalties or not being permitted to refinance your home. I won’t know any of this until I pull your credit and put your application together. Let’s get started and rest assured, if you qualify, the rate is yours

In some cases, foreign income can be used. Generally, the applicant should be able to provide bank statements or wire transfers showing deposits, and should be able to provide a W-2 wage and tax statement (for USD) and/or a US exchange rate and foreign tax credit section of the Canadian tax return

We offer several mortgages for newcomers. The first type requires full time employment and requires 5-10% down payment as an insured mortgage - and we have amazing rates on these mortgages. The second newcomer mortgage usually requires 35% down payment and generally lenders prefer professionals (E.g. Doctor, engineer) from another country.

The simplest home countries are the US and G7 countries (United Kingdom, United States, Japan, France, Germany, Canada and Italy). If a SIN begins with a 9, they are a temporary resident, we will need to know when the SIN expires. The most critical factor is stable, proven employment with no probation or short term contract. It is preferred that the applicant have some established credit. If credit is thin, credit from other countries can sometimes be used.

Credit bureaus can be ordered directly via Equifax. To substantiate credit history you can try to understand if they have any credit cards, cellphones, utilities, or rent they are regularly paying. It is also urged that the downpayment be located in Canada. If all of the other factors are solid, some lenders may even consider 10% down.

We have access to a variety of mortgages, and can explore the options. With EI or CERB alone, you are unlikely to qualify. Are there other sources of income that may have been forgotten? Do you have a return to work date? We can qualify applicants using several alternative incomes: alimony or child support from an ex spouse; CPP, OAS, or private pensions, disability income, Child Tax Credit, foster parent income, etc. If there is no other source of income, is there an opportunity for a guarantor or cosigner - or perhaps there is equity in your property?

A guarantor can be used to strengthen a mortgage application based on higher income, assets or more established credit. Their names will be on the mortgage loan documents however they will not be on the title of the property. A guarantor’s debts are included as well. A co-signer will be on the title of the property as well as on the mortgage loan documents. A co-signer will be considered a co-applicant and will have all their debts added to the liabilities. A co-signer does not need to own 50% of the property, they can often own 1% of the property. The main consideration for a co-signer is that they are fully accountable for the mortgage. This means if they want to purchase another property, this entire mortgage will be considered as part of their debt load - even if they own only 1% of the property

Generally, the spouse does not need to be on the mortgage. If the property is the matrimonial home with only one person on title, the other must sign at the lawyer as a consenting spouse and obtain Independent Legal Advice (at the lender’s discretion). If the spouse is on title, they must also be on the mortgage. If you are married, and this is your matrimonial home, the majority of lenders may require spousal consent. If you want the lowest rates, these lenders WILL need spousal consent. If the spouse’s income is required, they would need to be on the mortgage. If you don’t need your spouse’s income they don’t have to be on title. Potentially, the spouse might need independent legal advice, especially if the transaction is related to the sale of real estate. Certain lenders may have varying rules

There are many reasons why a home may not qualify for a mortgage. Within the condo market, the term “Blacklist” is sometimes used. This signifies that an insurer or lender may not want to lend here. The reasons could vary from kitec plumbing issues, to micro condos, to condo board issues and even lawsuits between the builder and property management company. Detached homes also have a variety of features that can make them unsuitable to lend on. Some additional factors could be: knob & tube, asbestos, off grid properties, island properties, house boats, mobile homes, previous grow ops, UFFI insulation, no proper water well or septic, etc. Cottages can also be very specific, it is best to get the MLS listing to check with the lender.

A fixed-rate means you are locked in for a term and know what your monthly mortgage payment is, which will not change until the end of the term. Variable rates are often lower than fixed rates, however, they often fluctuate with changes to the Bank of Canada Rate. There are some variable rate lenders where the interest rate fluctuates, but the payment stays the same throughout the term. The other main advantage of variable rates is that the penalty is generally only 3 months of interest. The main disadvantage of a fixed rate is that the penalty could be very, very high if you need to break the mortgage during the term - especially at a big bank.

It depends on the property type and value. The minimum down payment for a residential property under $500,000 when purchasing a property is 5%; however, the property must be owner-occupied, and you will be required to pay mortgage insurance and you must qualify for the mortgage. If you don’t want to pay mortgage insurance, then you need to put 20% down. Some lenders require a larger down payment for “business for self” applicants or rental properties.

Most of the lenders we work with allow for strong prepayment privileges. Typically you can prepay 15%-20% of the principal per year. Alternatively, some lenders allow you to double up payments increasing your payment amount by 15-20% each time.

You cannot exceed 80% of the value of your home. Remember, if you qualified originally for your mortgage under the old rules, you would now be subject to the stress test when applying for a refinance. If you have accumulated debt, a refinance will help to get rid of high-interest payments and, in most cases, increase cash flow. With low rates, a refinance can be used for other investments, which would provide a higher return than the interest you are paying on your mortgage.

A property in which there is a downpayment of less than 20%, is considered to be a High Ratio mortgage. The minimum requirements are 5% down payment on the first 500k and 10% of any funds above this. Insurance is required by law for purchases with less than 20% down payment. Insurance premium costs are based on the size of the down payment (It is most expensive if 5-9.99% down and can cost approx 4%). Some of our best rates are for insured mortgages. Note that the maximum purchase price is $999,999 and there are other requirements as well.

This is how often you pay your mortgage. Payments can happen weekly, bi-weekly and accelerated payments would happen 26 times per year. Semimonthly is twice per month. Bi-weekly accelerated payments are the monthly payment divided by two and paid 26 times per year. A bi-weekly non-accelerated payment is a monthly payment x12 /26. Assuming $1000/ mo, BWA is $500 and BWNA is $460. In essence, you are paying slightly more, and impacting your principal more by doing accelerated payments. Keep in mind, not all lenders allow both]

For insured mortgages, a minimum of 1.5% of the purchase price - over and above the down payment must be readily available to show the lender, and some lenders may require proof of these available funds upon approval. Especially for insured or high ratio mortgages, many lenders ask clients to have a buffer of 1.5% of the purchase price (or closing costs) in their bank account as a ‘rule of thumb or estimate.’ Keep in mind the GTA and GVA are double the land transfer taxes.

Bridge Financing is when the property a client purchased is closing before the property the client has sold, and the client needs to pay for the new property in full on closing. Not all lenders offer bridge financing. If your client requires a bridge, ensure you go to that lender for all of their financing needs. Bridge financing fees are anywhere from $250 - $700+, and most lenders charge approximately prime plus 4%. Lenders will also look to register a lien on both the purchased property and the property being sold.

We can usually get paperwork back from a lender in 1-3 days. For the Condition of Financing (COF) 5 days is ideal but 3 days should be OK if all the documents are provided upfront, however, an appraisal might take 2-5 business days. Mortgages closing in 30 days work for most lenders and this is what is recommended. We can close as fast as 2 weeks (or less) with some lenders (TD, Scotia).

A mortgage charge is typically used for a 1st mortgage and is registered for the amount of that loan. A collateral charge is typically used to secure a 1st mortgage and line of credit and can be registered at a much higher amount than the combined debt. Some lenders are now registering collateral mortgages against a 1st mortgage (only) at higher amounts, as this type of registration is harder to switch out of at maturity.

First time home buyers have several incentives through the government. The primary incentives for first-time buyers include:

Borrowers may use their RRSPs for their down payment as an interest free loan. First time buyers need the funds in their account for at least 100 days (because there is a 90 day requirement, and another 10 days are needed to fund the mortgage).

First time home buyers are eligible for land transfer tax rebates. This will come after they make the purchase, so this money should not be relied upon up front. There is a first-time home buyers incentive. In this program the government takes a shared ownership of the property. The program is not especially relevant in Toronto due to high prices. The government attempted to modify the program for Toronto, however, it was never revisited due to the pandemic.

There are 5 well known big banks in Canada. They have many products and make profit by paying 0.01% for a savings account and granting a mortgage at a higher rate (eg. 2%). They also make money with lots of fees and service charges.

Mortgage Finance Companies have only one line of business - mortgages! They generally offer more competitive rates, great mortgage products and better service levels. Mortgage finance companies don’t have ‘posted rates’ the way the banks do; so, when it comes to penalty calculations on a fixed rate product, you can save yourself thousands of dollars should you have to break your term. You are also not paying for branches on every street corner! They are regulated under OSFI, the same regulators as that of the banks and often, they are actually lending money directly from the Big Banks. Many of our owners rely on these lenders for their own personal mortgages - as they can provide outstanding value to the borrower].

Mortgage Loan DEFAULT Insurance is required if the down payment is less than 20%. This insurance protects the LENDER in the event you default on your mortgage payments. There are currently 3 mortgage loan insurance companies: CMHC, Sagen and Canada Guarantee.

All lenders require you to have a home insurance policy. This home insurance protects you in case of fire, severe weather conditions, accidents, or anything that can cause damage to your home. Home insurance policies offer full replacement or payouts in the case of damage. Home insurance is for YOUR protection and it also protects the lender on their collateral.

These are two completely different types of insurance. Your house insurance protects you in case of fire, severe weather conditions, accidents, or anything that can cause damage to your home or you. Mortgage loan default insurance is for the lender and protects the lender in case of a mortgage loan default.

Your lender will require title insurance and it is arranged directly by the lawyer or title company. Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership

For a one time fee, called a premium, a title insurance policy may provide protection from unknown title defects (title issues that prevent you from having clear ownership of the property). Examples could include:

• Existing liens against the property’s title (e.g., the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium secured against the property).

• Encroachment issues (E.g., a structure on your property needs to be removed because it is on your neighbor’s property).

• Title fraud.

• Errors in surveys and public records.

• Other title related issues that can affect your ability to sell, mortgage, or lease your property in the future.

• Your title insurance policy will protect you as long as you own your property and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title. You should speak with your lawyer for the specific details].

The credit bureau companies (Equifax and Transunion) understand that borrowers are often shopping for a good mortgage. Therefore, there is a 45-day “window” for credit pulls. All pulls or inquiries done within a 45 day period, related to mortgages count as considered in the same context.

Note to contrast someone who becomes unemployed and then applies for a Home Depot credit card, then an Esso card, then Walmart and then maxes out the balances. This WOULD have an impact on the credit score because the borrower is actively seeking credit due to a bad financial situation.

We have many lenders for all types of transactions. You may have to pay a bit of a higher rate, but more often than not, a mortgage can be found. We won’t know until your application is complete and your credit bureau is pulled. As an example, some of our lenders can offer best rates with a credit score in the 600’s, depending on the situation. Other lenders have their own credit scoring system, which also helps us to leverage a stronger application.

Some A lenders with best rates will consider a purchase transaction after the discharge date with 2-years of reestablished credit. Each scenario is very unique. A better understanding is required. Some B lenders will pay out the discharge.

The length of time a client remains in an alternative lending product will vary based on their unique situation; most alternative mortgages offer one or two-year terms. There are some lenders who offer three and even five-year terms, but this is much more rare.

There are some borrowers who remain in this space for the long haul. It is unlikely they will ever qualify for a mortgage with an A lender because of credit and/ or income issues. That is OK, they are grateful there is a reasonable alternative

INQUIRIES

Stay on bureau for 3 years. If less than 5 inquiries, they stay on indefinitely

TRADE ACCOUNTS

Open or closed 6 years from date of the last activity

JUDGEMENTS

6 years from the date filed

COLLECTIONS

6 years from the date of the last payment/5 years from the date of the date assigned

CONSUMER DEBT COUNSELLING/ PROPOSAL

3 years from settlement date/ 6 years from the date filed

BANKRUPTCY

6 years from the discharge date/7 years from the date filed.

DOUBLE BANKRUPTCY

14 years from the date settled

GARNISHMENT

6 years from the date filed

FORECLOSURE

6 years from the date filed