Pre-Qualifier Affordability
Mortgage Comparison
If you're thinking of buying a home or transferring or
refinancing your existing mortgage, use these handy
calculators to:
-
Figure out how much you can afford to spend on a
home.
-
Determine what your mortgage amount and payments
will be.
-
Compare different ways of paying your mortgage off
faster.
-
Add lump sum or top-up payments to your mortgage
calculation.
-
See your amortization schedule (which provides a
breakdown of principal and interest payments for the
life of the mortgage).
The
Mortgage Process:
Get a
pre-approved mortgage certificate
A
pre-approved mortgage certificate is a written
commitment that you will get a mortgage for a set amount
of money, at a specific rate of interest that is
guaranteed for 60 to 120 days, depending on the
financial organization you choose. The commitment is
made subject to a financial assessment and property
appraisal. The service is free and without obligation.
Why is
it a good idea to get a pre-approved mortgage?
A
pre-approved mortgage gives you an edge. Before you even
go house hunting, you will know the size of your
mortgage, the interest rate, and the size of your
monthly mortgage payments. With your financing already
mapped out, you can concentrate on finding the right
home in your price range.
A
pre-approved mortgage also puts you in a strong
bargaining position when you make an Offer to Purchase.
If the seller wants to make a quick sale, you may be
able to negotiate a price lower than the list price,
because the seller knows that you are a serious buyer.
On the other hand, if several people are bidding on the
home you want, you may decide to offer to purchase at
the list price, to beat out earlier offers.
Contact
your mortgage broker to get a pre-approval.
Making an
Offer to Purchase
When
you find the home that's right for you, your next step
is to make an offer to purchase the home from the
current owner. The owner can accept your offer, make
changes to the offer and present you with a
counter-offer, or reject the offer.
The
Offer to Purchase
The Offer to Purchase is a legally binding agreement
between you and the person selling the house. It's a
good idea to have your lawyer review the offer with you
before it is presented to the seller. It sets out:
-
Your name.
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The seller's name.
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The address or legal description of the property.
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The price you are prepared to pay for the home.
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The items you expect to be included in the purchase
price.
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The amount of your cash deposit.
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Your financing arrangements, such as your mortgage.
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The closing date.
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Specific terms or conditions that must be met as
part of the purchase.
- A
time limit for meeting these conditions.
Discuss
the Offer to Purchase with your lawyer before you sign
it. Remember, it becomes a legally binding agreement the
moment it is accepted. If you decide to cancel an offer
that has already been accepted, you could lose your
deposit and the person selling the home could sue you
for damages. If the seller does not accept your offer,
your deposit will be returned.
When your
offer is accepted
Your offer has been accepted. Good. You're now in the
home stretch - finalizing the details of your mortgage
and closing the purchase of your new home. Call your
assigned Mortgage Specialist. Your Mortgage Specialist
will need to receive the following documents and
information:
- A
copy of the real estate listing.
- A
copy of the accepted Offer to Purchase.
-
Information on the source of your down payment.
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Income verification if you are employed.
- A
letter from your employer verifying your place of
employment and income, or T4s and Notice of
Assessment, or T1 General Tax Return and Notice of
Assessment.
-
Income verification if you are self-employed.
- 3
years of Financial Statements and 3 years of Notice
of Assessments, or 3 years of T1 General Tax Returns
and 3 years of Notice of Assessments.
Processing
the mortgage application
Your Mortgage Specialist will want to verify the value
of the property you are buying, your current financial
picture and your credit history, so a property appraisal
and credit report will be ordered.
Also,
if your down payment is less than 25%, you qualify for a
high ratio mortgage on which you would have to pay
insurance premiums. You decide whether you want to pay
the premium in cash or have your lender add it to your
mortgage amount. Your Mortgage Representative can
contact Canada Mortgage and Housing Corporation (CMHC)
or GE Capital Mortgage Insurance Company of Canada (GEMI)
to make the arrangements.
Be
prepared to pay fees for the mortgage application,
credit report and property appraisal.
Closing
the purchase
Closing day is the day you become the official owner of
your home. However, the closing process usually takes a
few days.
Typically, you visit your lawyer's office to review and
sign documents relating to the mortgage, the property
you are buying, the ownership of the property and the
conditions of the purchase. Your lawyer will also ask
you to bring a certified cheque to cover the closing
costs and any other outstanding costs.
Once
your mortgage and the deed for the property are
officially recorded, you become the official owner of
the property.
Congratulations! You've just bought a home!
For
more information, please
click here.
