Where can I get a copy of the National Housing Act (NHA)?

A An electronic version of the National Housing Act can be found on the Justice Canada website. Print copies of acts can obtained from Canadian Government Publishing or bookstores that carry Canadian government publications.

How much can I afford to pay for a home?

A To determine 'affordability' I will first need to know your Taxable Income along with the amount of any debt outstanding and the monthly payments. Assuming it is your principal residence you are purchasing, they will then calculate 32% of your income for use toward a mortgage payment, property taxes and heating costs. If applicable, half of the estimated monthly condominium maintenance fees will also be included in this calculation.

Second, I will calculate 40% of your Taxable Income and deduct all of your monthly debt payments, including car loans, credit cards, lines of credit payments. The lesser of the first or second calculation will be used to help determine how much of your income may be used towards housing related payments, including your mortgage payment. These calculations are based on Lenders' usual guidelines.

In addition to considering what the ratios say you can afford, make sure you calculate how much you think you can afford. If the payment amount you are comfortable with is less than 32% of your income you may want to settle for the lower amount rather than stretch yourself financially. Make sure you don't leave yourself house poor. Structure your payments so that you can still afford simple luxuries

Q What is a home inspection and should I have one done?
A A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The results of the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection.

A pre-purchase home inspection can add peace of mind and make a difficult decision much easier. It may indicate that the home needs major structural repairs which can be factored into your buying decision. A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.
Q What is a pre-approval and how do I get one?

A Pre-approved Mortgage provides an interest rate guarantee from a lender for a specified period of time (usually 60 to 120 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. Conditions would usually be things like 'written employment and income confirmation' and 'down payment from your own resources', for example.

The easiest way to get a Mortgage Pre-approval is to apply with us today. We will ask some questions to determine your financial situation and then I will calculate the size of mortgage you qualify for, using this information. With your authorization, they will then proceed with arranging a Pre-approved Mortgage for you if you are planning to buy property in the near future. Most successful 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.

In summary, a Pre-approved Mortgage is one of the first steps a Home Buyer should take before beginning the buying process.

Q What is the minimum down payment needed to buy a home?
A It is possible to purchase a home with no down payment. Click on No down payment options for more information on no down payment products.
Q What is mortgage loan insurance?
A Mortgage Loan Insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, and GE Capital Mortgage Insurance Company, 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 75%. The insurance premiums, ranging from .50% to 3.4%, are paid by the borrower and can be added directly onto the mortgage amount. This is not the same as Mortgage Life Insurance.
Q Should I go with a Fixed Rate or Variable Rate?

That's a difficult question......here are the differences:

Fixed Rate Mortgage
The mortgage rate stays the same for the whole term and the mortgage payments are consistent during the term of the mortgage.

Variable Rate Mortgage
The mortgage rate varies with fluctuations in the bank prime rate. As a result, mortgage payments may vary during the term of the mortgage. A minimum term commitment is often required (usually 3 years). You may have the option to "lock-in" the mortgage at a fixed rate during the term.


What's the difference between a Closed Term and an Open Term?


Closed Term Mortgage
The mortgage contract is typically written for terms of 1 to 10 years. Penalties may be triggered if the borrower wishes to end the contract before the term expires (early repayment).

Open Term Mortgage
The mortgage contract is written for a short term (usually 6 months or 1 year). No penalties are triggered if the borrower wishes to end the contract before the term expires.

Q Should I take a short term or a long term mortgage?
A The options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6 month terms to 10 year terms. Savings can be had by taking a variable or floating rate mortgage. Typically the shorter the term or guarantee of the rate, the lower the rate will be. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision. Make sure you talk to an expert when you are making this decision.
Q What is a high-ratio mortgage?

A High-Ratio mortgage is one where the amount to be borrowed by way of a mortgage is greater than 75% of the purchase price, or the appraised value, whichever is less. High-Ratio mortgages generally require Mortgage Loan Insurance provided by either Canada Mortgage and Housing Corporation (CMHC) or GE Capital (GE), a private Insurer.

The Mortgage Loan Insurance premium is paid to CMHC or GE and protects the Lender in the event the mortgage is not repaid and the bank has to take back the property. The benefit to the borrower is that it allows them to purchase a home with less than 25% down payment. The insurance premium is paid by the borrower and can be added directly onto the mortgage.

Mortgage Loan Insurance premiums range from .50% to 3.4% of the mortgage amount and are calculated based on the overall loan to value. For instance, borrowers with a 5% down payment, a loan to value of 95%, would pay a premium of 3.25% while those with a 20% down payment, a loan to value of 80%, would pay an insurance premium of 1.00%.

Mortgage Loan Insurance is not the same as Mortgage Life Insurance.

Q What is a conventional mortgage?
A 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.
Q Why should I use a BC Homebuyer consultant?

Financial Institutions sell only their own products to the public through their own sales force. As a result, they are not able to provide unbiased advice or selection since by doing so they risk losing your mortgage to a company whose product may provide more value to you. BC Home Buyer Consultants on the other hand, sell a variety of mortgage products and services as they deal with many lenders, not just one. Because of this they are able to search for product from a variety of lenders, including banks, trust companies, insurance companies and credit unions, for the one that offers the best product, rate and terms for your particular needs. Thus, they can be totally objective in their recommendations to you.

BC Home Buyer Consultants are also able to negotiate on your behalf, structuring deals to meet the criteria of the lenders, and therefore getting you a mortgage solution that works for you. Remember a BC Home Buyer Consultant works for you!

To gain market share from Mortgage Broker companies and individual brokers, the majority pay a finder's fee for referred business. Due to our volume of business, fees are paid by the lender and Invis mortgage brokers receive fast approvals in order to gain their business. This allows the mortgage broker to shop among the various financial institutions for the mortgage rate and product that best suits the needs of the client and, in almost all cases, at no cost to you the client.

When you deal directly with a Financial Institution and your mortgage is declined, for whatever reason, you must begin the application process all over again with another Lender. When you deal with a us the application can quickly be redirected to another Lender, or several other lenders, for consideration.

Q Why use a mortgage broker?
A YOUR lending institution will only advise you on their own product. You could visit every institution out there, one by one if you had time......
Or, you can talk to me and I will advise you on the best products available. Whether you are BUYING, SELLING, RE-FINANCING, RENEWING a mortgage, DO YOURSELF A FAVOR, and talk to a professional.

How do Brokers get better deals than many Banks?


The lenders who work with mortgage brokers include traditional sources, such as chartered banks, trust companies, as well as corporate and private pension funds.

In addition to these sources, brokers often develop professional relationships with private sources of funds, termed private lenders. These lenders can provide many various mortgage products not available at conventional sources.

Q How much does it cost to use a mortgage broker?

The vast majority of mortgage clients do not pay a fee for the services of a Mortgage Consultant. To gain a larger market share, the majority of financial institutions pay a finder's fee to Mortgage Consultants and at the same time offer them their best discounted rates and fast approvals in order to gain their business. This allows the Mortgage Consultant to shop among the various financial institutions for the mortgage rate and product that best suits the needs of the client and, in almost all cases, at no cost to the client.

In situations where traditional lenders will not approve a mortgage because of poor credit, and where the application must be placed with a private or non-traditional lender, a brokerage fee may be charged to the client. This cost must always be disclosed to the client up front and must be authorized in writing by the client before it can be charged.

Q What is required to obtain a first Mortgage?
A In order to get the best rate, terms and conditions, you'll need to provide me with:
1. Employment verification with proof of income
2. A good credit rating
3. Verification of source of down payment
4. An online application
Q How does bankruptcy affect my ability to qualify for a mortgage?
A Depending on the circumstances surrounding your bankruptcy, generally some lenders would consider providing mortgage financing. If you are a previously discharged bankrupt the best way to determine whether or not you qualify at this time is to discuss your situation with me. I have many lenders to approach based on your circumstances.
Q Should I wait for my mortgage to mature?

No, have me do the shopping for you for the best interest rate at least 90 days before your mortgage matures. Lenders will often guarantee an interest rate to you between 90-120 days before your mortgage matures. And, as long as you are not increasing your mortgage, they will cover the costs of transferring your mortgage too. This means a rate promised well in advance of your maturity date, thus eliminating any worries of higher rates. And if rates drop before the actual maturity rate, the new lender will usually adjust your interest rate lower as well.

Most lenders send out their mortgage renewal notices offering existing clients their posted interest rates. The rate you are being offered is usually not the best one. Always ask me to check for the best possible rate. If you don't you may end up paying a much higher interest rate on your renewing mortgage than you need to.

Q Cashbacks and gimmicks, do they save me money?
A Be very careful! Some of the gimmicks used to entice you to take a mortgage at an institution may seem very appealing but the long term effect could be costly. A 3% cash back may seem great on closing, but a 1% discount in your rate may save you considerable more over the 5 years. It is important to look at the numbers. I have the software available on our system to compare your options. Give me a call to do the math