These Are Commonly Asked Questions by Self-Employed Mortgage Seekers
Jump to an answer:
- How much is the maximum mortgage I can apply for?
- How can I qualify for a mortgage?
- Do I need to get pre-approval before looking for a house I wish to buy?
- How much down payment do I need to arrange for?
- If I have extra funds, can I pay additional instalments?
- Can I use my RRSP/RSP for a down payment? How do I proceed?
- What is the high ratio mortgage all about?
- Should I opt for a fixed rate or variable rate mortgage?
- As an investor buying a home for the first time, are there any benefits I can use?
- Should I hire the services of mortgage broker?
- What are the fees charged by mortgage brokers?
- How do I get assistance for renewing my mortgage?
Q: How much is the maximum mortgage I can apply for?
A: Mortgage providers will assess your total expenses over each month along with the current debts you owe. Accordingly, they will work out the amount of mortgage you can raise.
Q: How can I qualify for a mortgage?
A: Prospective lenders will request you to provide certain details such as personal information, income levels, and kind of employment along with designation. You also need to provide a credit bureau report. Once these details have been furnished, the lender will evaluate the application and match them with the available loan products. You may also be asked to provide any other documents the provider may need.
Q: Do I need to get pre-approval before looking for a house I wish to buy?
A: It is advisable to get a pre-approval so you know exactly the amount of mortgage you can raise and have a secure rate of interest in hand. This factor protects you from the possibility of the rates rising while you search for the property you want to buy.
Q: How much down payment do I need to arrange for?
A: The down payment you may have to pay can depend on several factors and can range from 0% to 5%. Your mortgage provider will give you complete details of the funds you must raise.
Q: If I have extra funds, can I pay additional instalments?
A: The loan provider will offer you several options regarding the payment schedule that you can choose from.
Q: Can I use my RRSP/RSP for a down payment? How do I proceed?
A: If you’re buying a home for the first time, you can withdraw up to $25,000 to make the down payment without any taxation issues. Your mortgage provider can help you with further information.
Q: What is the high ratio mortgage all about?
A: If you’re offering a down payment of less than 20%, the bank will require you to take out insurance with the CMHC or Genworth and Canada Guaranty.
Q: Should I opt for a fixed rate or variable rate mortgage?
A: At the time of taking the mortgage, the provider will give you all the necessary details so you can make an informed choice.
Q: As an investor buying a home for the first time, are there any benefits I can use?
A: You can use the RSP to make a down payment. Further, if the property you’re buying is worth up to $425,000 or less, you need not pay any property transfer tax.
Q: Should I hire the services of mortgage broker?
A: Mortgage brokers have the expertise to check the market for the mortgage products, interest rates, and other terms and conditions that are best suited for individual clients and their specific needs.
Q: What are the fees charged by mortgage brokers?
A: The mortgage broker receives a referral fee by the mortgage provider that you choose to make you with the loan. You will not have to pay any charges.
Q: How do I get assistance for renewing my mortgage?
A: You can rely on the expertise of your mortgage broker to help you with the renewals and refinancing procedures. It is preferable to choose a particular broker with whom you can build a long term working relationship. This professional can provide you the required information about the changing mortgage market and the steps you should take for economical interest rates and other terms. You can also get the mortgage advice you need according to your changing life situations.