Getting approved for a mortgage could be the most important step in the home buying process. If you were not already pre-approved, you will begin your mortgage approval process after you have made your Offer to Purchase and your offer has been accepted. Your Offer to Purchase will be conditional on financing, which means you need to secure your mortgage approval before you can move forward with your home purchase. The mortgage approval process is similar to a  mortgage pre-approval: you will need to provide your mortgage broker or lender with specific details about the home you are purchasing, along with your income…

If your mortgage application is not approved, there are several steps you can take. You could get a guarantor to co-sign the mortgage application. This is often done by a parent or relative. You could seek financing through an alternative lender or a private lender. These companies specialize in lending to homebuyers who cannot obtain a mortgage through a traditional lender like a bank, credit union, or mortgage company.

Most Canadians choose a 5 year fixed term mortgage as it is the most competitively priced mortgage term in the industry however, statistically speaking, approximately 6 out of every 10 Canadians that hold a mortgage break their mortgage on average during the 38th month of their term.

Committing to a fixed-term mortgage for five long years exposes people to the most insidious aspect of residential financing: prepayment charges. The Big 6 Banks typically have the highest mortgage penalties associated with fixed-term mortgages while Mortgage Finance Companies offer the best solutions when it comes to calculating mortgage penalties.

A fair-penalty lender calculates its standard prepayment charges, for lack of a better word, “fairly.” It does so by comparing your actual mortgage rate to a rate equal to (or close to) what it charges new customers for a time frame similar to your remaining term. Unlike the Big Six banks, fair-penalty lenders don’t use arbitrarily inflated rates (“posted rates”) in their calculations. That only serves to drive up penalties.

Many people are conditioned to pay more for big bank financing. Among other things, they trust the brand, like the convenience, or like knowing they can walk into a branch to talk to someone if there’s ever a problem (although, for most people, mortgage problems after closing aren’t too common). Unfortunately, the cost of that convenience is steep. A Simple Example Suppose you are a major bank customer with a $300,000 mortgage at a rate of 2.69% (originally a 5 year fixed term mortgage) taken out 38 months ago. Now imagine you: Need to consolidate debt into your mortgage Just found a new job in…

The First-time Home Buyers' Tax Credit was introduced as part of 'Canada's Economic Action Plan' to assist Canadians in purchasing their first home. It is designed to help recover closing costs such as legal expenses, inspections, and land transfer taxes. The Home Buyers' Tax Credit, at current taxation rates, works out to a rebate of $750 for all first-time buyers. After you buy your first home, the credit must be claimed within the year of purchase and it is non-refundable. In addition, the home you purchase must be a 'qualified' home. If you are purchasing a home with a spouse, partner or friend, the…

In order to be eligible for the First-time Home Buyers' Tax Credit, your home must meet the following requirements: Be within Canada Be an existing or new home Be a single, semi, townhouse, mobile home, condo, or apartment Can include a share in a co-operative housing corporation that gives you possession of the home You must intend to occupy the home within one year of purchase You or your spouse must purchase a qualifying home The home must be registered in either your name or your spouse's name You cannot have owned a home in the previous four years You cannot have lived in a home owned by your…

If you have a disability and are purchasing a home, you do not need to be a first-time home buyer to claim the Home Buyers' Tax Cedit, where a person with a disability is defined as a person who can claim a disability amount on their tax return in the year the home is purchased. The Home Buyers' Tax Credit can be claimed if the home purchased is suitable for the disabled person's needs, and the disabled person occupies the home within one year from the date of purchase.

The land transfer tax rebate is another tax credit available to first-time home buyers in Ontario, British Columbia, and Prince Edward Island. Ontario Land Transfer Tax Rebate First-time homebuyers in Ontario can qualify for a rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000. To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:  You must be a Canadian citizen or permanent resident of Canada,  You must be 18 years of age or older, You must live in the home within 9 months of purchasing it, You cannot have owned a home…

If you buy your home before it is built, or if you substantially renovate an existing home, you could qualify for a rebate of a portion of the sales tax. The amount of the GST/HST new housing rebate depends on the purchase price of the home and can only be claimed if the net purchase price is $450,000 or less. While this rebate is often taken advantage of by first-time buyers, this rebate is available to all Canadians who qualify regardless of whether they have owned a home before.

One great source of funding for your mortgage down payment is a Registered Retirement Savings Plan (RRSP). The Canadian government's Home Buyers' Plan (HBP) allows first time home buyers to borrow up to $35,000 from your RRSP for a down payment, tax-free. If you are purchasing with someone who is also a first-time homebuyer, you can both access $35,000 from your RRSP for a combined total of $70,000. However, since the HBP is considered a loan, it must be repaid within 15 years.

In order to be eligible as a first-time homebuyer, you must meet the following criteria1: RRSP funds you borrow must be in your account for at least 90 days prior to withdrawal You cannot have owned a home within the previous four years If you are buying with a spouse (or common law partner) who is not a first-time homebuyer, you cannot have lived in a house they owned for 4 years You have entered into a written agreement to buy or build a qualifying home You must intend to live in the home within one year of purchase as your primary residence If you have…

It is important to note that any funds you withdraw for the homebuyers' plan must be in your account for 90 days prior to your withdrawal. In order to participate in the Home Buyers' Plan, you must print off a copy of Form T1036 . This form is available from Canada Revenue Agency's website (www.cra-arc.gc.ca). You must fill out Section 1 then give the form to the financial institution that holds your RRSP so they can fill out Section 2. Your financial institution will send you a T4RSP form, which will confirm how much you withdrew from your RRSP as a part of…

If you still have an outstanding balance on your mortgage at the end of your mortgage term, you will have to renew for another term. By law, your lender has to send you a renewal notice 21 days before your term is up, but most allow you to renew with them anytime in the final 120 days of your current mortgage term, without having to pay a penalty to break your term early; this is known as an early mortgage renewal. During the final 120 days of your term, most lenders will contact you with an early renewal offer. The offer will…

If you choose to pursue a Commercial Mortgage, there are specific criteria that you will have to satisfy. The bar is set quite high as the value of loans is considerably higher. Debt service coverage ratio. This is the main criterion that lenders will look at and is essentially the ratio of cash available to the required loan payments. Most lenders will apply a loan-to-value ratio and will expect you to invest some of your own money into the purchase to balance the odds. Credit History. Most lenders will require a good personal credit score as well as evidence that your business…

Canada Mortgage and Housing Corporation (CMHC) is Canada’s provider of mortgage loan insurance for the construction, purchase, and refinancing of multi-unit commercial real estate properties, including rental buildings, licensed care facilities and retirement homes. CMHC Mortgage Loan Insurance enables approved lenders to help borrowers purchase multi-unit properties with a minimum of 15% down. Borrowers can also access competitive interest rates for the life of the mortgage and enjoy reduced renewal risk. A CMHC mortgage provides a number of flexible financing terms available including extended amortization periods and fixed and floating interest rates and is available for first and second mortgage products. A…

A Reverse Mortgage is the opposite of a regular mortgage. A Reverse Mortgage allows you to monetize a portion of your equity, without mandatory principal and interest payments. A simple way to think of it is that you are taking out a loan in installments (or all at once), using your home as both the security for the loan and, in most cases, the asset that will eventually fund paying back the loan. With a Reverse Mortgage, the lender advances you (the homeowner) a cash amount. This is to be repaid when the mortgage comes due. You do have options to…

Depending on your lender and plan, you may be able to get the money from your reverse mortgage loan either upfront (as a one-time lump sum) or partially upfront, with the rest spread out over time. Opting for an upfront payment of a reverse mortgage will result in interest being charged on the entire loan from the first day. However, it may also result in you being charged a lower rate on the mortgage, depending on your lender.

To be considered eligible for a Reverse Mortgage in Canada, you must be: A Canadian homeowner, and Aged 55 or older. If you have a spouse and you are both on the title of the house: Both of you must be at least 55 years old to be eligible, and Both of you must be listed on the reverse mortgage application. Additionally, the home you are using to secure the reverse mortgage must be your primary residence. This usually means you have lived in the home for at least six months to a year, and you must continue to live in the home while the loan…