Why use a Mortgage Broker?
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Power of professional
negotiating expertise.
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One stop convenience for
access to numerous
mortgage products.
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Unbiased knowledgeable
advice.
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Access to unadvertised
rates.
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Work for you, not the
Bank.
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What
is the Homebuyers Plan?
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The Home Buyers Plan is
a federal government
program that allows
homebuyers to use
$20,000.00 for each
purchaser from his/her
own RRSP.
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You must not have owned
a principal residence
within the last 5 years.
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You must intend to
occupy your home as a
principal residence.
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Minimum repayment is 15
equal annual instalments.
This schedule can be
accelerated.
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The funds to be
withdrawn must havbe
been invested into the
RRSP for a minimum of 90
days prior to
withdrawal.
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You must complete a Form
T1036 .
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Do I
qualify for the 5% downpayment
program?
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The home must be located
in Canada and is to be
occupied as your
principal residence.
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You have from your own
resources a down payment
of at least 5% of the
purchase price of the
home.
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Your mortgage payment
must not exceed 32% of
your gross household
income. This includes
payment of principal +
interest + property
taxes + heat + condo
fees (if applicable).
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You must be able to
cover closing costs
equivalent to at least
1.5% of the purchase
price.
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You meet the lender's
elibibility requirements
regarding income,
employment and credit
worthiness.
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What
should I expect for closing
costs?
Closing costs are approximately
1.5% of the Purchase Price. .The
following are approximate costs:
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Appraisal Fee: $214.00
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CMHC FEE (if
applicable): 165.00
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Survey Certificate (if
applicable): 250.00
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Home Inspection 250.00
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Legal Fees (approx):
750.00
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Tax Adjustment (if
applicable)
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Interest Adjustment (if
applicable)
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Property Transfer Tax
(if applicable)
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What
is Property Transfer Tax and do
I have to pay it?
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This tax is charged by
the Provincial
Government and is
collected by your lawyer
at closing.
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Each Province varies as
to the amount but it is
usually a percentage of
the purchase price. For
example in British
Columbia, the amount the
purchaser must pay is 1%
of the first $200,000
and 2% of the balance.
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You are exempt from
paying PTT in British
Columbia if you have
never owned a home
anywhere. You must
finance at least 70% of
the purchase price and
the maximum home price
must not exceed
$300,000.00.
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What
type of income proof do I have
to provide?
In
most situations lenders require
a comfort level that the
borrower has sufficient income
and cash flow to service the
mortgage as well as any other
obligations that they may have.
The higher the Loan to Value (ie
mortgage amount vs. purchase
price) the more important this
becomes as the lender is placing
less reliance on the value and
equity in the property and more
on the earning power of the
borrower. The following is a
summary of what Lenders require
depending on what type of job
you have:
Salaried Employees
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Job Letter - Lenders use
100% of the income.
Verification is made on
company letterhead,
signed by appropriate
individual. If you are a
recent hire, the letter
should confirm that
probation period has
been passed. Bonuses,
car allowances and other
forms of remuneration
should be mentioned if
applicable.
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Pay Stubs - Many Lenders
will also require your
most recent pay stubs.
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Hourly
Employees
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Pay Stubs - showing
year-to-date income
verification.
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T4's and/or Personal Tax
Returns (T1 Generals)- 3
years to take an
average.
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Notice of Assessment - (NOA)
- most recent to confirm
no taxes owed.
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Commission Income
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T4's and/or Personal Tax
Returns - 3 years to
take an average.
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Job Letter - confirming
position.
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Notice of Assessment (NOA)
- optional depending on
Lender.
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Self-Employed
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Financial Statements of
Company - 3 years
average of net income
used. Depending on
Lenders policies, The
add-back of various
personal expenses run
through the company may
or may not be allowed (eg's
of allowable addbacks -
Depreciation,
Amortization, CCA
(Capital Cost
Allowance).
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NOA's (Personal Notice
of Assessments).
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Personal Tax Returns (
T1 Generals showing
personal net income).
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