When should I apply for a mortgage pre-approval in Ontario?
If you plan on buying a home in the near future you should apply for a pre-approval as soon as possible. Pre-approvals are based on the information provided by the applicant such as employment history, total assets, and total debt. The interest rate specified in the pre-approval will be held for a period of 120 to 180 days.
Can I get a pre-approval before I find the home I want to buy?
You are encouraged to get a pre-approval before you begin your home search as it will lead you in the right direction in terms of focusing only on properties that you can buy. If a new constructed home is of interest to you then lenders will extend the preapproval time to fit the construction schedule.
What is the minimum down payment required to purchase a home in Ontario?
The minimum down payment required to purchase a home in Ontario is 5% of the home’s listing price. On top of this price you will also need to cover closing costs which include appraisal fees, legal fees, and survey certificates.
If I have declared bankruptcy, can I still qualify for a mortgage?
Once the bankruptcy is discharged it is best to call a mortgage consultant to determine if you can qualify. Each individual has a different situation, the circumstances surrounding your bankruptcy and your credit history will be taken into account.
What documentation is required for obtaining a mortgage?
You will need to provide full time employment/proof of income, a good credit rating, a verifiable down payment, and an online approval application.
What can be used for a down payment?
You can use your RRSP, accumulated savings, sale proceeds of existing home, sweat equity, or you can use a cash gifts towards your down payment. However, you will need a gift letter to be signed by the donor as confirmation that it is not a loan.
What costs are involved in obtaining a mortgage?
The costs that you will incur are: legal costs ($600-$1000), insurance on the property and mortgage application, sometimes an appraisal will be requested, and lastly tax costs.
How long does it take to complete a mortgage transaction?
Once the lender has all the required information it will typically take two weeks.
What is CMHC or Genworth Insurance?
The CMHC is short form for Canada Mortgage and Housing Corporation, a federal institution that evaluates clients to purchase homes with a lower down payment requirement. They will insure the mortgage instead of the bank and they will add a premium to the mortgage.