What is a mortgage?

A mortgage is a loan secured against property, comprising a house and land.

There are two types of mortgages:

1. Hi-ratio: put less than 20% down on a purchase.

2. Conventional: put 20% down or more on a purchase.

Little Known Facts:

• A house for sale through real estate, if less than 20% down, does not require and appraisal. (Generally, if private sale, an appraisal is commonly asked for).
• If a person works a lot of overtime, this income can be used if the lender recieves 2 years T4's or Notice of Assessments (NOA). (Amount used is a 2-year average).
• Some lenders offer up to 5% cash back to assist with down payment. (No negotiation, ie: rates, must take bank posted).
• A mortgage can not be placed on land alone.
• When purchasing a home, regardless of being a first time or repeat buyer, you can purchase with only 5% down.
• You can refinance up to 90% of home value.
• Canadian banks can legally only loan up to 80% of the value of a mortgage.  If unable to make a 20% down payment, the money must be insured by Canada Mortgage & Housing Corporation (CMHC) or G.E. Capital.
• In almost all cases, no credit rating, and better than that, no good credit rating, means no mortgage.
• The amount a person qualifies for is usually based on debts (including what a mortgage would be) as a proportion of 40% debt to income.
• All credit activities- good and bad- remain on your record for 6 years with Equifax Credit, and 7 years with Trans Union Credit.
• You can get pre-approvals with 120 day rate protection (today's rate or lower).
• You can use a maximum amortization of 35 years (total time to pay off 100% of mortgage).