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Phone: 1-780-909-2265 or 1-855-457-3377

Roberta Hardern
roberta@mortgagesuccess.ca
1-780-909-2265 or 1-855-457-3377

Answers


How much can I afford to pay for a home?

To find out how much you will be able to pay for your new home, you need to analyze your taxable income along with the amount of debt that you have to pay off through monthly payments. If it is your main residence that you are going to purchase, calculate approximately 32% of your income to make the mortgage payment, property taxes and heating costs. This ratio may be substantially higher under certain circumstances.

Next, you need to calculate 40% of your taxable income and from that, deduct all of your other monthly payments such as car loans, credit card bills and other such debts. The lesser of these two calculations will be used to determine how much of your income may be used towards housing related payments, including your mortgage.  Due to recent changes in the guidelines you may be able to use up to 44% of taxable income towards the cost housing related payments

Apart from what the ratios tell you, you should make calculations of your own to determine how much 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 take all other expenses into consideration too so that you can easily afford the basic luxuries.

What is a Home Inspection? Should I have it done?

A home inspection is a visual examination of a house by a qualified professional to determine the overall condition and value of the home. When conducting a proper inspection, an authorized home inspector should check all the major components of the house such as the roof, ceilings, walls, and floors along with other systems such as the electrical connections, heating, plumbing and drainage and weather proofing. The inspector usually gives the results of the inspection in writing to the home owner within 24 hours of the inspection.

It is always advisable to get a home inspection done before making a purchase decision. A thorough inspection is likely to clear a majority of the doubts that you might have when purchasing a home. The inspection gives an idea about the quality of the construction and indicates whether any major repair work will be required. This allows you to calculate all the add-on costs before making the final decision. An inspection will definitely give you a more secure feeling about your purchase decision by removing most of your doubts.

What is the minimum down payment that you need to make when purchasing a home on a mortgage?

In most cases, you will need to pay a minimum of 5% of the house value as a down payment. In addition to the down payment, you must also be able to show that you have the capacity to cover other closing costs such as the legal fees and disbursements, appraisal fees and a survey certificate.

As a rule, at least 5% of the down payment must be from your own cash resources or a gift from a family member. This cannot be a borrowed amount. Several programs are available in the market that allow some alternate sources of down payment. The CMHC is one organization offering such programs. Certain lenders also accept gift money from a family member or friend as a down payment. However, such a sum needs a signed letter from the donor stating that it is a gift and not a loan.

For any down payment that is less than 20% of the total value, a loan insurance from either the CMHC or GE is required.

What is Mortgage Loan Insurance?

Mortgage Loan Insurance is an insurance cover provided to a lender against default on mortgage installments, when the down payment amount is less than 20%. Like any other insurance, mortgage loan insurance too requires premium payments. The premium amount can vary between 0.5% to 3.75%, depending on the insurance provider and how much of the purchase price is financed by the mortgage; greater the down payment, lesser will be the premium. Mortgage loan insurance is distinct from Mortgage Life Insurance as the latter guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.

What is a Conventional Mortgage?

A conventional mortgage is one in which the down payment amount is equal to more than 20% of the purchase price (or where the loan value is less than 80%). Such a mortgage normally does not require mortgage loan insurance.

What is a High-Rate Mortgage?

A mortgage which is greater than 80% of the purchase price or appraisal, whichever is less, is known as a High-Ratio mortgage. A High-Ratio Mortgage requires mortgage loan insurance. Premiums for a mortgage loan insurance can range from 0.5% to 3.75%, depending on the value of the mortgage.

What is a pre-approved mortgage? What is the benefit of getting pre-approved?

A pre-approved mortgage is one that 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 on the basis of information provided by the borrower and is subject to certain conditions being fulfilled before the mortgage if finalized. These conditions usually include factors such as a written confirmation of employment and income among other things. Many brokers prefer it when their clients have a pre-approved mortgage as this gives a clear idea of the affordable price range when hunting for a new home.

The benefits of getting a pre-approved mortgage are many. First of all, pre-approval gives you an idea of what you can afford, making your search for a new home much simpler. It also does away with the tension of trying to find out what your monthly installments are going to be. Probably the greatest advantage of getting a pre-approved loan is that it allows you to lock in a rate. As the lender guarantees a fixed rate when pre-approving the mortgage, the borrower can secure that same rate even when the market prices climb up. In case a situation arises where the interest rates fall below those that were pre-approved, the lenders usually offer the lower rate.

Can I qualify for a mortgage if I have been declared bankrupt?

Some lenders may consider you eligible for a mortgage even though you have faced bankruptcy. However, this decision may vary from lender to lender and will greatly depend on the circumstances surrounding the bankruptcy. Certain measures can be taken by the prospective borrowers to improve their credit rating. Approach your mortgage broker for details.

What is the documentation required to obtain a mortgage?

To make your mortgage application process as simple and lucid as possible, it is advisable that you collect all these documents beforehand so as to avoid any interruptions later.

  • Personal information and identification such as your drivers license or passport.
  • Job details, including confirmation and proof of income.
  • Your sources of income.
  • Proof of financial assets.
  • Information and details of all your bank accounts, loans and other debts.
  • Source and amount of down payment.
  • Proof of source of funds for the closing costs (usually about 1.5% of purchase price)

How will child support and alimony affect my mortgage qualification?

If you are paying child support and alimony to another person, generally the amount paid out is deducted from your total income before determining the mortgage amount that you would qualify for.

If you are receiving child support and alimony from another person, the amount paid to you will be added to your total income before determining the mortgage that you will qualify for. However, you will be required to produce a regular receipt for the same for a set time period as specified by the lender.

What is the difference between a fixed rate mortgage and a variable rate mortgage?

In a fixed rate mortgage, the interest rate is pre-determined at the beginning of the loan term, which can range from 6 months to 25 years. The advantage of this type of mortgage is that it offers a security of knowing your monthly payments beforehand and allows you to plan accordingly.

In a variable or floating rate mortgage, the payments are fixed for a period of one or two years but the interest rates can fluctuate every month depending on the market conditions. If the interest rates drop, more of the payment goes towards reducing the principal; if the rates go up, a larger portion of the monthly payment goes towards covering the interest. The interest rate is based on a predetermined formula which is in-turn based on the prime-lending rate.
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    home equity loans, mortgage purchase financing, mortgage refinancing, Best Mortgage Rates in Cambridge, Ontario, first and second mortgage options for Canadians. Apply online for a home equity loan or mortgage at email or contact a Franchisee Name mortgage specialist and discover the equity value of your home.

    Bad Credit Mortgages in Canada
    It may surprise you to know that even Canadians who have bad credit may qualify for a mortgage. Mortgage Success works to help all types of people, even those with bad credit, overcome their financial obstacles to get the mortgage financing they need.

    For instance, if you have had reliable employment and/or income and have had some slow payments, Mortgage Success can help secure first mortgage for you. Even Canadians who have extremely bad credit including bankruptcies, those that are self-employed or a recent immigrants can be qualified to get a first or, in some cases, a second mortgage. Situations are unique and at Mortgage Success we will take the time to evaluate all of your circumstances to ensure that you get financing and at best rates and terms available.

    In Canada, a down payment is a very critical factor in securing a mortgage loan. The down payment is what the lenders will receive if the mortgage goes into collections. Most lenders will require a minimum of 15% down from potential homeowner especially one with bad credit. How much a lender will ultimately require; however, does take into account other factors such as income and the severity of the bad credit.

    Proving income can be tricky, especially for those who are self-employed, but income requirements become more flexible if the down payment as the percentage of the down payment increases. One thing holds true and that is that the longer period a prospective homebuyer can prove a steady flow of income, the easier it will be to secure financing.

    In Canada, the property itself is a key factor in securing a bad credit mortgage loan. The home must be in good shape and be considered “marketable”. Should the borrower default, the lender wants to be sure that they can recoup their losses through the sale of the home. This works to the advantage of Canadians living in urban areas where the demand for homes is higher.

    The credit requirements for a bad credit mortgage vary. Some Canadian lenders require that all bad debts are paid off prior to lending the money. Other lenders will not be concerned with the prior bad debt as long as the down payment is at 20%. Mortgage Success will work with you to get the financing that best suits your unique situation.

    For those Canadians who have a bankruptcy in their past, a mortgage loan may still be available. Some of the requirements include: the bankruptcy has been discharged for longer than 2 years, a down payment is available and credit has been reestablished following the bankruptcy; however, even those who have not reached the two year benchmark may qualify for a loan if they have a larger down payment.

    Mortgage Refinance in Canada
    Undergoing a mortgage refinance will pay off your current mortgage and any additional legal claims against your home and establish an entirely new mortgage. Every year thousands of Canadians consider mortgage refinance and for a variety of reasons. At Mortgage Success, we can guide you through the process and ensure that you make the right decisions to reflect your unique set of circumstances.

    One of the most common reasons Canadians decide to investigate a mortgage refinance is a change in interest rates or mortgage options. To determine whether refinancing is a sound financial decision, Mortgage Success will help you evaluate and compare the cost of changing your mortgage to the cost savings based on the new rates. Just a few minutes spent with us conducting a review of your mortgage has the potential to save your tens of thousands of dollars over the course of your loan.

    For those with an existing investment portfolio or those with a desire to create one, a mortgage refinance loan can help in a variety of ways. It can provide the capital needed to make an investment purchase. It can also be used to create a debt swap – allowing currently taxable debt to become tax deductible. Undergoing mortgage refinancing can also create access to the capital needed to acquire investment properties. A mortgage refinance allows the owner to take the equity from one property and use it as a down payment for another property.

    As tuition costs in Canada continue to rise, it is more and more common for parents to use a mortgage refinance to fund their children’s education. A mortgage refinance allows parents to use the equity in their home to pay for college and help provide a sound financial future for their children.

    Another reason Canadians are opting for mortgage refinancing is to fund home improvements. For those who are spending over $15,000 for remodel, a mortgage refinance may drastically reduce the cost of interest paid for an unsecured loan or line of credit.

    A mortgage refinance also offer Canadians who have large amounts of debt to use the equity in their home to pay it off. This can dramatically reduce monthly payments and interest charges. Whatever your reasons are for considering a mortgage refinance loan, Mortgage Success can help you evaluate your options and help you determine what makes sense for your needs.

    Get the Best Mortgage Rates in Canada
    Mortgage Success provides our clients with best mortgages rates available in Canada. We bring a wealth of experience and knowledge to every client, and use it to provide them with some of the lowest mortgage rates in Canada. Our mortgage rates are updated regularly, so if you see different rates on other Canadian mortgage sites, their rates may have not been updated. We use all our contacts and information to find the best rates, terms and service available.

    Whether you are in the market for a mortgage renewal, debt consolidation or other special needs loan, our mortgage rates are the best in Canada. By working with a variety of banks and mortgage institutions, even private funders, Mortgage Success is able to offer you simply the best in financial solutions and mortgage rates. The recent fluctuations in interest rates can make it very confusing and difficult to compare rates and terms. Even seasoned buyers find it difficult to track and analyze the information. The solution to cutting through all the confusion is easy. At Mortgage Success we compare the mortgage rates for you to ensure that you get the best mortgage rate in Canada that is available to you. Simply put, we do the work and you save tens of thousands of dollars in interest. And, you build the most equity at the quickest pace. Finding you the best mortgage is what Mortgage Success is all about, so let us do the hard part, while you focus on achieving the rest of your dreams.

    Available Lines of Credit in Canada
    Most lending institutions in Canada offer their customers a line of credit option. A line or credit is simply a revolving loan with a preset credit limit which is to be paid in a set time period. Access to a line of credit provides Canadians with a means of gathering capital whenever it is needed. In some ways, a line credit works in a similar way to a credit allowing you to have access to the funds again as soon as you have made a payment. One of the benefits of using a line of credit; however, is that they have lower interest rates than most credit cards. Another benefit of a line of credit is that repayment terms are flexible. If, for instance, you have the funds are available then you can repay the entire loan without incurring a penalty. A line of credit is an excellent way to tap into additional funds when you need them. Mortgage Success can work with you to find the lender in Canada with the best rates and terms available so you can take that vacation, buy that new dining room set or whatever it is that you are dreaming about. A line of credit with one of our lenders in Canada gives you access to the funds you need to make your dreams a reality. We’ll work with them and on your behalf so you have the terms you need to make payments that work with your budget.

    Thinking About Buying Your Own Home?
    Canadians make the decision to become a first time home buyer for a variety reasons. Many people want the privacy of having their own home. Others are attracted by the independence and freedom of being able to make their own decorating decisions, to have a garden, to add additions for growing families. The purchase of a home allows first time home buyers to put down roots and start building financial security. At The Mortgage Success we understand that the reasons why Canadians decide to become a first time home buyer are as vast as the country itself.

    One reason to consider becoming a first time home buyer in Canada is that homes are appreciating quickly and purchasing a home can help build your net worth. As an added bonus, your first home, since it will be your principal residence, will not be accessed a capital gains tax. This makes owning your own home a very attractive proposition.

    Another reason to purchase a home is it builds equity that you can use to leverage other buying decisions down the road. Every month part of your payment gets applied to the principal of your loan and that creates equity. That equity can be used to start a business, to finance an education, to make home improvements, etc., providing you with a lifetime of options that renters simply do not have.

    Deciding to become a first time home buyer in Canada makes sense, but many people still hesitate, wondering whether they have enough financial resources to make a purchase. Most lending institutions will require at least five percent down to make a loan. Ideally, of course, you would put down even more. As long as there are no other purchases that require the use of your savings; however, having that five percent available is enough to let you begin to consider becoming a first time home buyer.

    In addition, many first time homebuyers in Canada are also eligible for the Home Buyer’s Plan. This plan allows first time home buyers in Canada to use up to $25,000 of their RRSP to purchase a home. The money is considered tax-free as long as it is paid back within 15 years. This puts home ownership in reach of even those without a healthy savings account.

    So, if you have not started the mortgage pre-qualification process, now is the time. This will let you determine how large a mortgage you are qualified to have, and it will also allow you extra time to look around for the best rates, terms and options, prior to finding that dream house.

    Need Answers About Debt Consolidation?
    Being a good credit manager means making sure that you are eligible for the best options for your set of circumstances. Debt consolidation can provide you with a means of quickly and easily reducing, or even eliminating, your debt – saving you thousands of dollars in interest and penalties.

    Debt consolidation allows you to combine all your lines of credit into a single loan and pay it down. This opens up your cash flow and gives you additional credit options. In fact, many Canadians find that debt consolidation gives them not only a lower overall rate and also allows them to extend terms.

    Debt consolidation allows Canadians to use the equity in their home to pay down unsecured debt like credit cards. It provides them with a single monthly payment which greatly reduces their financial complications by placing all their debt in a single place.

    Homeowners in Canada with a high amount of unsecured debt should consider combining their debt with a single lender. Mortgage Success offers a variety of debt consolidation options as well as 24/7 online access and customer service to help you review and modify your loans to get the best rates and terms available.

    Need a Home Equity Loan?
    Mortgage Success offers Canadians the option of using the equity in their home to secure additional credit. This provides homeowners in Canada with a more accommodating substitute to conventional mortgages and provides them with an option that lets them pay at their own pace.

    A home equity loan can give a homeowner in Canada access to credit equal to 80% of their home’s purchase price or to its appraised value – whichever is lower -- minus any outstanding mortgages or additional charges. What’s more, as the balance of their loan decreases, the amount of their available credit starts to grow.

    A home equity loan provides Canadians with the means to finance college, to pay for a wedding, to start a business, to fulfill their dreams without incurring high interest credit card debt.

    Whatever their home equity loan needs, Mortgage Success offers options that help Canadians secure their dreams without jeopardizing their financial futures. Mortgage Success offers homeowners fixed rate or variable rate home equity loans that are devised to fit the needs of our customers and our 24/7 online access and customer service lets them review and modify loans to get the best rates and terms available on their time schedules.

    Credit Repair
    If you are a Canadian who has been laid off, in the midst of a divorce or other financial stumbling block, Mortgage Success may be able to work out a new mortgage that allows you to pay off your debts, improve your credit score and relieve some of your financial stress. The key to successful management is letting us know, so that we can help you avoid major credit damage.

    If there is not sufficient equity in your home to allow refinancing, Mortgage Success will work to put you in touch with one of our trusted partners. Our partners can be trusted to put your interest’s first and help you find solutions that meet your life’s needs.

    If you are a Canadian interested in purchasing a home, but have already suffered with extensive credit damage, there are some steps you can take to ensure that your credit is on the road to repair:

    1. Start by opening a savings account and begin making regular deposits.
    2. Establish a connection with a lending institution by taking out a small loan using the savings account as security.
    3. Repay the loan quickly.
    4. Next, apply for a low limit credit card again using your savings as security.*
    5. Use the card regularly and make payments on time and over the monthly required payment amount.

    *Note: Canada's Office of Consumer Affairs (OCA) warns that too many credit inquires in a short period of time can have a negative impact on your credit score, so limit your credit card request to one or two. Once you’ve established a record of reliable repayment, Mortgage Success is here to help you along the road to financial security.

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