Frequently
Asked
Questions
1
Where do I start to get a mortgage?
The best place to start is right here right now. By collecting your required documentation, we are able to pre-qualify you for a home purchase.
2
Why do I need to provide documents?
Lenders have specific requirements based on the direction of government to provide borrowers with a mortgage. Included in the document requests will be your ID, employment documents, and can also include financial information pertaining to your down payment.
3
Why wouldn't I just use my own bank?
In many cases, financial institutions have a one product solution for your borrowing needs, whereas we are able to provide you with several lenders possibly including your own financial institution and have them compete with each other for the best rates and terms.
4
What is a down payment?
A down payment is the amount of funds that you as a purchaser has to contribute to your home purchase, which is a minimum of 5% of the purchase price up to $500,000 with an additional amount required for purchases above that. Your down payment can be sources from your own personal funds, a gifted down payment or if you are a first time home buyer and have access to your RSP you can utilize First-Time Home Buyers Plan. Be sure to ask us for more details.
5
Can you buy a house with 5% in Ontario?
Yes, it is possible to buy a house with 5% down payment in Ontario, Canada. However, the minimum down payment required depends on the purchase price of the home. For homes with a purchase price of up to $500,000, the minimum down payment is 5%. For homes with a purchase price between $500,000 and $999,999, the minimum down payment is 5% for the first $500,000 and 10% for the portion of the purchase price above $500,000.
It is important to note that a down payment of less than 20% of the purchase price will require mortgage loan insurance, which will add to the cost of buying a home. Additionally, qualifying for a mortgage with a low down payment can be more difficult and may result in a higher interest rate. It is recommended to speak with a mortgage broker or lender to discuss your options and determine what down payment amount is best for your situation.
6
Who qualifies for first time home buyer in Ontario?
In Ontario, to qualify as a first-time homebuyer, you must meet the following criteria:
1. You have never owned a home, anywhere in the world.
2. You have not cosigned for a mortgage.
3. You are a Canadian citizen, permanent resident, or have been legally authorized to work in Canada for at least one year.
4. You have not occupied a home that you or your current spouse or common-law partner owned or co-owned in the last four years.
If you meet the above criteria, you may be eligible for first-time homebuyer incentives such as the First-Time Home Buyer Incentive (FTHBI), which is a shared equity program with the Canadian government that allows you to borrow 5% or 10% of your home's purchase price to put towards a down payment. Additionally, the Land Transfer Tax Rebate may also be available to you. It is recommended to speak with a mortgage broker or lender to determine what options are available to you as a first-time homebuyer in Ontario.
7
How much income you need to buy a house in Ontario?
The amount of income you need to buy a house in Ontario depends on various factors, such as the purchase price of the home, the size of your down payment, and your credit score. Lenders typically look at your debt-to-income ratio (DTI) when determining your mortgage eligibility.
As a general rule of thumb, it is recommended that your monthly housing costs (mortgage, property taxes, heating costs, and condo fees, if applicable) should not exceed 32% of your gross monthly income. Additionally, your total debt payments (including housing costs, car loans, credit card debt, etc.) should not exceed 42% of your gross monthly income.
For example, if you have a gross monthly income of $5,000, your recommended maximum monthly housing costs would be around $1,600, and your recommended maximum total debt payments would be around $2,100.
However, it is important to note that these are general guidelines, and each lender has their own criteria for assessing mortgage eligibility. It is recommended to speak with a mortgage broker or lender to determine how much income you will need to buy a house in Ontario based on your specific situation.
8
What is the average mortgage term in Ontario?
In Ontario, the most common mortgage term is five years. However, mortgage terms can vary, and some lenders offer terms as short as six months or as long as ten years. The length of the mortgage term you choose will depend on your personal financial goals and circumstances.
A shorter mortgage term, such as one or two years, may be appealing if you think interest rates may decrease in the near future, and you want to take advantage of lower rates when your mortgage term ends. A longer mortgage term, such as five or ten years, may be appealing if you want the security of knowing what your mortgage payments will be for a longer period of time and do not want to worry about fluctuating interest rates.
It is important to note that a longer mortgage term may result in higher interest rates, and you may end up paying more interest over the life of your mortgage. It is recommended to speak with a mortgage broker or lender to determine what mortgage term is best for your situation.