Q- What’s a mortgage?

A- This is a legal method by which a borrower can pledge property to a lender as security for a debt.

Q- What's an interest rate?

A- An interest rate when buying a house is the percentage of the loan amount that a lender charges as interest to the borrower; essentially, It represents the cost of borrowing money.

Q- What is amortization?

A- The period over which you'll repay the mortgage, usually up to 25 or 30 years.

Q- What's a mortgage term?

A- The actual length of time for which the money is loaned. The term is usually shorter than the amortization period. At the end of the term, the outstanding debt must either be refinanced at current market rates or paid off in full.

Q- Fixed vs variable mortgage rates – what's the difference?

A- Fixed rates stay the same for the term. Variable rates fluctuate with market interest rates.

Q- How much mortgage can I afford?

A- Lenders use stress tests and your income/debt to determine this. As a mortgage agent, I play a crucial role with this qualification.

Q- What's a down payment?

A- The upfront portion you pay. Minimum is 5% for homes under $500K, 5%-10% on the portion between $500K-$1M, and 20% for homes above $1M.

Q- How does my credit score affect my mortgage?

A- A higher score leads to better rates and makes you a more attractive borrower.

Q- What is the stress test?

A- Lenders must ensure you could still afford the mortgage if interest rates rise significantly.

Q- What is CMHC insurance?

A- Mortgage default insurance is required when your down payment is less than 20%.

Q- What's the difference between a mortgage agent and a bank?

A- Mortgage agents work with many lenders, offering more choice as well as special rates; banks represent their own products.

Q- What's a pre-approval?

A- A conditional commitment from a lender for a specific amount, locking in your rate for a period.

Q- How long does the mortgage process take?

A- Pre-approval is quick. Closing after an offer is accepted usually takes 30-60 days.

Q- What documents do I need to apply for a mortgage?

A- Proof of income, assets, debts, ID, property info. After we chat to know exactly what is needed, I will give you a list.

Q- What are closing costs?

A- Fees associated with finalizing the mortgage (legal, appraisal, land transfer tax, etc.)

Q- How often will I make mortgage payments?

A- You have different flexible options such as monthly, bi-weekly, weekly, often accelerated payments (paying more frequently).

Q- Can I make extra payments on my mortgage?

A- Yes, most mortgages allow lump-sum prepayments or increased regular amounts. *note: All lenders are not the same with their criteria around this, so it is very important that we work together to make sure you get the right mortgage.

Q- What happens if I miss a mortgage payment?

A- Fees and penalties apply, and it can negatively affect your credit. Contact your lender immediately.

Q- Can I renew my mortgage early?

A- Usually, but with penalties. Sometimes it’s worth it, sometimes it’s not depending on the situation.  As your mortgage agent, I will help guide you with this.

Q- What does it mean to refinance my mortgage?

A- Getting a new mortgage to replace your existing one, potentially for better terms or to access equity.

Q- What is the Land Transfer Tax in Ontario?

A- A tax paid when buying property, calculated based on purchase price. First-time buyers may get a rebate.

Q- Are there any first-time homebuyer programs in Ontario?

A- Yes, a couple are the Land Transfer Tax rebate and the Home Buyers' Plan (using RRSPs).  Previously with the HBP you were able to use up to 35k tax free toward down payment or 70k (co-borrowing) as long as it is repaid within 15 years. But as of April 16th 2024 you can now use up to 60k tax free or 120k (co-borrowing) toward down payment while paying back in 15 years.

Q- How do property taxes work in Ontario?

A- Municipalities charge property tax based on assessed home value, paid annually or in installments.

Q- Does Ontario have special rules for buying a condo?

A- Yes, we'll need to review the condo's monthly maintenance fees which are taken into consideration when applying.

Q- What is title insurance and do I need it in Ontario?

A- It protects against property ownership issues. While optional, most lenders require it.

Q- Should I get a home inspection?

A- Highly recommended! It reveals any potential problems before you commit to buying.

Q- What's the role of a real estate lawyer in the mortgage process?

A- They handle legal documents, title searches, transfer of funds, and ensure your interests are protected.

Q- Can I use gifted money for a down payment in Ontario?

A- Yes, usually from immediate family, with documentation proving it's a gift not a loan.

Q- Can I get a mortgage if I'm self-employed?

A- Yes, but qualifying might require different documentation to prove income stability.  I have access to several lenders with stated income programs that are very good.

Q- Where can I find reliable information about current mortgage rates in Ontario?

A- Once we chat and I get all of your documents, I can usually get you pre qualified within 24-48 hours.  Working together, I can get you personalized comparisons that suit your needs.