Frequently Asked Questions
Click the Questions Below to Expand
What kinds of mortgages are available?
Hi-Ratio Mortgage (Insured)
The mortgage has a LTV(loan to value) of greater than 80%. These mortgages have less than a 20% down payment and are legally required to be insured by one of the three mortgage loan insurers in Canada. All variable rate mortgages and fixed terms need to qualify at the greater of the contract rate(the rate the borrower pays) and the Bank of Canada qualifying rate.
Conventional Mortgage (Insurable)
The mortgage has a LTV of less than or equaled to 80%. These mortgages have at least a 20% down payment and can qualify under the insurer’s guidelines. All variable rate mortgages and fixed terms need to qualify at the greater of the contract rate(the rate the borrower pays) and the Bank of Canada qualifying rate.
Conventional Mortgage (Uninsured)
The mortgage has a LTV of less than and equaled to 80%. These mortgages have at least a 20% down payment and do not qualify under the insurer’s guidelines. Five year and greater fixed rate mortgages are qualified at the greater of the Bank of Canada qualifying rate and their contract rate(the rate the borrower pays) plus 2%.
What is the minimum down payment needed to purchase a home?
A minimum down payment of 5% is required to purchase a home. In addition to the down payment, you must also be able to show that you can cover 1.5% of the property purchase price for applicable closing costs (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable). Mortgages with less than 20% down must have mortgage loan insurance. In some instances, borrowers with lower debt service ratios may be able to borrow the 5% down payment creating a mortgage where 100% financing is used.
What is mortgage loan insurance?
Mortgage loan insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, and Sagen (previously Genworth Canada) and Canada Guaranty both approved private corporations. This insurance is required by law to insure lenders against default on mortgages with a loan to value ratio greater than 80% (less than 20% down payment). The insurance premiums, ranging from 0.60 to 4.50%, are paid by the borrower and can be added directly onto the mortgage amount. This is not the same as mortgage life insurance.
What does a mortgage broker do?
A mortgage broker works on your behalf to provide insight and knowledge with respect to many lenders’ products and policies. A mortgage broker is aware of market trends and present mortgage rates and can provide you with a mortgage product best suited for your individual needs.
Why is it called a Mortgage?
A mortgage is a conveyance of property(which the borrower gives) to a lender as security for a loan. Such security is recoverable on the payment or discharge of the debt at a specified date. An encumbrance is registered on title of the lands. Mortgages are the primary means by which people finance the purchase of their homes.
What is a home inspection and should I have one done?
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 (roof, 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.
Why should I deal with mortgagesbycraig.com?
Everything we do, we believe in challenging the status quo, we believe in thinking differently. The way we challenge the status quo, is by making our service simple, well organized, efficient and stress free. We create happiness for people of all credit and income backgrounds by providing them with low cost mortgage solutions. See what other people have said about their experience dealing with us, click here.
Why don’t you have any rates posted on your site?
Rates change frequently among lenders and every mortgage transaction is unique. We want to be competitive and do not want to mislead you by posting a rate that is too high or perhaps a rate that is too low, only available to a small group of people with excellent credit. With better credit comes better rates and we work to get you the best rate possible.
If your services are free how do you make your money?
We receive a finder’s fee from the lender about 2 weeks after you receive funding. Standard financing services are free; only for the most challenging financial situations a fee may be charged.
A friend told me I could refinance my home to make some renovations. What does that mean?
By refinancing your loan, you increase the existing mortgage on your home up to 80% of its current value or as improved value. The funds are paid to you on closing and may be used for any purpose you wish.
What are the advantages in using a mortgage broker?
A mortgage broker can save you not only time, but also heartache. With the experience and knowledge gained by specializing, the mortgage broker will ask you all the right questions to present your application in its best possible light. By giving the information to the mortgage broker, they then can present it to the lender in a form the lender will accept, in turn making the mortgage application experience less stressful.
Why do you need all this information?
Your mortgage lender wants to make sure that you are well-qualified to make monthly mortgage payments and that you can continue making payments on your loan should you encounter unexpected circumstances. Going through a detailed documentation process protects both you and your lender. By offering an honest view of your personal finances, you are more likely to end up with a mortgage you can comfortably afford. And your lender is less likely to deal with issues such as delinquent payments or, in extreme cases, foreclosure.