1. What is a conventional mortgage?
2. What are the sources for mortgage financing?
3. Will I need mortgage insurance?
4. What is the best term to consider?
5. How does bankruptcy affect qualification for a mortgage?
6. What is a pre-approved mortgage?
7. Can I use my RRSP contribution to help me finance my first home?
8. What is a fixed rate mortgage?
9. What is a variable rate mortgage?

What is a conventional mortgage?

A conventional mortgage is usually one where the down payment is equal to 25% or more of the purchase price, a loan to value of or less than 75%, and does not normally require mortgage loan insurance.

What are the sources for mortgage financing?

In Canada, there is a wide range of financial institutions that are involved in the mortgage industry, including:

• Chartered Banks
• Credit Unions
• Trust Companies
• Life Insurance Companies

Your Mortgage Cents consultant will select the lender who’s right for you!

Will I need mortgage insurance?

A mortgage is a large debt and should be life insured for your family’s security.  Most banks have their own mortgage insurance plans.  For the most part, these insurance plans are controlled by the banks themselves.  They are the beneficiary and you have no control over how your benefit is used. 

However, we provide a unique insurance plan which is portable, allows you to be covered for up to 25 critical medical conditions and your benefit amount remains level over the entire life of the mortgage.  With this insurance plan, you are always protected.

How much will it cost me to have a Mortgage Cents consultant?

For most clients, Mortgage Cents provides a free service. We receive our fee from the lender providing your mortgage.  This fee does not increase the cost of the mortgage, because the lender must pay either its own sales staff or a broker to originate mortgages.

What is the best term to consider?

It depends.  Usually, the shorter the term, the lower the rate is. However, many people prefer the comfort of a longer-term mortgage.  This is another area where your Mortgage Cents consultant can help you find the package that is right for you.

How does bankruptcy affect qualification for a mortgage?

Depending on the circumstances surrounding your bankruptcy, generally some lenders would consider providing mortgage financing. The best and easiest way to determine whether or not you are eligible for mortgage financing is to consult with an experienced mortgage broker. The broker will collect your data, ascertain the parameters, and search for the right alternative lender that will accept your application.

What is a pre-approved mortgage?

A pre-approval is one of the first steps a home buyer should take.  Most real estate professionals will want to ensure you have a pre-approved mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range.

A pre-approved mortgage provides a guaranteed interest rate from a lender for a specified period of time (typically 60 to 90 days) and for a set amount of money. The pre-approval is calculated based on information provided by you and is generally subject to certain conditions being met before the mortgage is finalized. Factors include, but are not limited to, whether or not you own a home, the amount of equity you have in your home, the total amount of debt you carry, your income, and payment history

Can I use my RRSP contribution to help me finance my first home?

The “Home Buyers Plan” allows a first-time home buyer to withdraw up to $20,000 from their RRSP for the purpose of buying or building a qualifying home. The advantage to using the Home Buyers Plan is that the RRSP issuer will not withhold tax on the amount nor will you have to claim the amount as income. The amount must be repaid to the RRSP within 15 years with a minimum annual payment of 1/15th of the amount withdrawn. If a repayment is not made for a given year the minimum repayment is included as taxable income for that year.

Today, approximately half of all first-time home buyers use their RRSP savings to help finance a down payment.  Contact a Mortgage Cents specialist for more information on how you can use your RRSP to finance your home.

What is a fixed rate mortgage?

Fixed-rate mortgages are the most common type of mortgage loan. With a fixed rate mortgage, your monthly principle and interest payment do not change over the life of the loan.  Because the interest rate is fixed over the entire period of the loan, your monthly payment is more stable with a fixed-rate mortgage than with other types of mortgages.

What is a variable rate mortgage?

A variable (or adjustable) rate mortgage is one in which payments are fixed for a period of one to two years although interest rates may fluctuate from month to month depending on market conditions. If interest rates go down, more of the payment goes towards reducing the principal; if rates go up, a larger portion of the monthly payment goes towards covering the interest.