Mortgage Info

Arranging Your Mortgage

Mortgage payments are made up of a principal sum (the amount borrowed) and interest (the cost to you of borrowing money). The best plan for any type of mortgage is to minimize the amount of interest you pay - and lenders offer several ways to help do this.

  • Mortgage Calculator
  • A larger down payment means your home ultimately costs less because a smaller mortgage means less interest.
  • A shorter amortization, the period over which a loan is repaid.
  • A weekly or biweekly payment schedule, instead of monthly. By making payments every two weeks, instead of monthly, a 25-year mortgage can be reduced to 20 years.

Sea To Sky Mortgages

You don’t have to get your mortgage from the same place you have your savings or chequing accounts. Also, at the end of each term, you may be able to change the options of your mortgage, such as the payment schedule, the term, the rate or even who holds the mortgage.

What a Lender Wants From You
  • Personal information – age, marital status, dependents
  • Details of employment, including proof of income (T-4 slips, personal income tax returns or a letter from your employer stating your position)
  • Other sources of income, for instance, pensions or rental income
  • Current banking information
  • Verification of your down payment
  • Consent to run a credit investigation
  • A list of assets, including property and vehicles
  • A list of liabilities, for example, credit card balances, car loans - the total amount you owe and your monthly payment amounts
  • Fees for an appraisal or for a copy of a valid appraisal report if one was recently done
  • Mortgage insurance fees if a high-ratio mortgage is required
  • A copy of the property listing
  • A copy of the Agreement of Purchase and Sale on a resale home
  • The condominium financial statements, if applicable.
Approval Process
A mortgage approval should take only a few days. During this process, the lender will do a credit check and spot check other information you have provided. In addition, an appraisal of the value of your home may be obtained. If required, a request for mortgage loan insurance is submitted to CMHC or a private insurer. The lender then approves or rejects your mortgage loan.
Pre-approval
With pre-approval, your lender approves the amount of your mortgage and gives you a written confirmation or certificate for a fixed time period before you start looking for a home. The pre-approval term, usually lasting from 60 to 90 days, also sets the mortgage rate the lender will offer to you. If rates go down in that period, the lender should offer you the new lower rate
Mortgage Loan Insurance

When you need a mortgage loan that is more than 75% of the purchase price of your home, a mortgage loan insurance maybe required. It protects the lender and, by law, most Canadian lending institutions require it.

Having mortgage loan insurance means that if you, the borrower, default on your mortgage, the lender is paid back by the insurer - CMHC. With the risk of losing their money removed, lenders have the confidence to make mortgage loans of up to 95% of the purchase price of the home (subject to price ceilings). That means your down payment can be as little as 5% of the house price. With mortgage loan insurance, many Canadians who might be unable to obtain a 25% down payment can still buy a home.

What it costs
There are two components: an application fee and an insurance premium. The application fee typically ranges from $75.00 - $235.00 and mortgage loan insurance premiums range from 0.5% - 3.25% of the amount of your loan (additional charges may apply), depending on the size of the loan and the value of your home. The premium can be added to your mortgage payments, or paid off in a lump sum at the time of purchase to save interest charges on the premium itself.
Where to get it
See your lender, who can obtain mortgage loan insurance from CMHC. CMHC will insure mortgages of up to 95% of the home’s purchase price or the market value of the property, whichever is less.