Financing Your Property

There are many common methods of financing the purchase of a property, including:
• Cash
• Cash to existing mortgage.
• Cash to a new conventional mortgage.
• Cash to a vendor take back (VTB) mortgage.
• Cash to combination of a conventional mortgage and VTB mortgage.
• Cash to a Hi-Ratio mortgage. (to learn about High Ratio mortgages click here)

Whenever a mortgage is involved in the Financing Process, several steps are required:

• Completion of the loan application by the lender

• The lender processes and reviews the application on information provided by the borrower
• The lending institution requires:

1. An appraisal of the home
2. A Credit Report on the borrower
3. Verification of net worth (assets & liabilities) of the borrower.
4. Verification of down payment
5. Verification of Income of the borrower
Once the loan is approved, a Mortgage Commitment is issued for the borrowers Signature.

First Time Buyers 5% Down Payment 95% financing is available to first time buyers subject to the following criteria: In Fact today You can Purchase A Home with Zero Down if you have great Credit.
• Principle Residence for Canadian Resident
• Maximum 32% of gross family income to carry mortgage, taxes and heating.
• Maximum debt load to 4O% • $250,000 ceiling in the Toronto Area

Special Note: When Buying a condominium the finance company will use anywhere from 50% to all of the monthly maintenance fees to help determine your financial ability to pay a mortgage. In other words the maintenance fees will be part of the qualification process.

This plan has been made into a permanent program. This plan helps those who can afford the monthly cost of home ownership but have difficulty accumulating the down payment to purchase a home.

BUDGETING A KEY FACTOR IN PURCHASING A HOME

THINGS TO CONSIDER:

• Ongoing housing costs, including monthly mortgage payments, taxes, heating, secondary financing and 50% of condominium fees (if applicable). These costs should not exceed 32% of gross annual income.
• Loan payments, car payments, credit car payments. These costs should not exceed 40% of gross annual income.
• Two to three percent of the value of the home to cover annual operating and maintenance costs.
• One-time costs, which include appraisal, survey, land transfer taxes, insurance, moving and legal fees. Consult with a lawyer to determine an accurate estimate of these costs (usually 2% of the value of the home).

EXPENSES TO CONSIDER
• Appraisal
• Home Insurance
• Lawyer’s Fee
• Property Tax Adjustment
• Survey costs
• Fuel Adjustment
• Land Transfer Tax
• Interest Adjustment
• Mortgage Insurance Fee (CMHC)
• Mortgage Insurance Application Fee
• Other

PREPARING YOUR MONTHLY BUDGET:

INCOME = Monthly income (after taxes) + other income

Expenses: Monthly mortgage payment, property taxes, heating costs, home insurance, electricity, water, cable, telephone

Other: Car payment, auto insurance and repairs, gas, credit cards, other loans, groceries, life insurance, entertainment, vacation, clothing, other.

If you would like our Mortgage Representative to sit down with you and help you generate a financial plan to buy a home call us at (416)462-1650  Monday to Friday from 9 a.m. to 5 p.m. or you can use our mortgage and purchase calculators at  Mortgage Calculators. You can  request a call from our mortgage rep at (647)886-1550
.  To get started right away go to  Mortgage Application