Buying a home can be stressful, taxing, and confusing - our goal is to make sure you have all the information you need to make an informed mortgage decision. Below are some Frequently Asked Questions that can prepare you for your journey into home ownership.
What does it mean to be Pre-Approved?
A Pre-Approved Mortgage is one of the first steps a home buyer should take before beginning the shopping/buying process. Here at Integrity Mortgage, it involves a credit check, and an intimate and in-depth look at your unique financial picture, to provide you with specific guidelines to make your buying process efficient and easy. A Pre-Approved Mortgage is an interest rate guarantee from a lender, on a set amount of money, for a specified period of time (usually between 60 to 120 days). At Dominion Lending Centres - Integrity Mortgage BC, we value providing you with your exact purchasing power, and allowing you peace of mind as you step into your home buying journey.
What kind of documents will I need to provide to be Pre-Approved?
There are a multitude of unique circumstances for each of our clients mortgages, so there is no general set list of documents to have on hand. Some good things to keep easy accessible when looking to buy a home would be your Income information (pay stubs, commission statements, etc.), your Tax information (T4's, Notice of Assessments), information on your assets and liabilities (investments, credit card statements), and any information on properties you currently own.
I found a rate from this lender that is low. Why can't you get me that rate?
Mortgage rates are the most advertised feature in today's mortgage market. Why? – because interest rates are numbers, and they are easily comparable! However, there are a multitude of ‘fine print’ details that can affect the way your interest rate aligns with your personal goals – we want to make sure that those fine print details are made clear and allow you to understand every aspect of your mortgage, as well as the lender behind it. We will consult with you to make sure we understand your goals first, and then set out to find you a mortgage rate that meets your needs. It won’t always be the lowest rate on the market, but it will meet your needs and expectations best.
What is Mortgage Loan Insurance?
Mortgage Loan insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, and Genworth, an approved private corporation. This insurance is required by law to insure lenders against default on mortgages with a loan to value ratio greater than 80% (in simpler terms, if you put down less than 20% of the purchase price of the home as your down payment, you will need to get this insurance). The insurance premiums, ranging from 0.50% to 7.0%, are paid by the borrower and can be added directly onto the mortgage amount.
What is a Conventional Mortgage?
A Conventional Mortgage is usually one where the down payment is equal to 20% or more of the purchase price; a loan to value of or less than 80%, and does not require mortgage loan insurance.
How will child support and/or alimony affect my mortgage qualification?
Where child support and/or alimony are paid by you to another person, generally the amount paid out is deducted from your total income before determining the size of the mortgage you will qualify for.
Where child support and/or alimony are received by you from another person, generally the amount paid may be added to your total income before determining the size of the mortgage you will qualify for, provided proof of regular receipt is available for a period of time determined by the lender.
What is a Fixed Rate mortgage?
The interest rate on a fixed-rate mortgage is set for a pre-determined term - usually between 6 months to 10 years. This offers the security of knowing what you will be paying for the term selected.
What is a Variable Rate mortgage?
A Variable Rate Mortgage will have payments that fluctuate month to month depending on prime. If the prime rate goes up, so does your payment, and if prime drops, your payment will follow. This allows you to take advantage of low market rates, but leaves you vulnerable to spikes in prime rates.
How does bankruptcy affect qualification for a mortgage?
The first thing that lenders will consider when looking at a bankruptcy, is whether a previous home was involved with the bankruptcy - if this is the case, it will be difficult to qualify for another mortgage. If a home was not involved with the bankruptcy, you will require two years of reestablished credit following bankruptcy, with a minimum credit allowance of $2500, and no late payments recorded.