Mortgage FAQs

Real estate mortgage & home-buying tips

Real estate mortgage

Click here for FAQs on the Prime Rate Change and how it works with an adjustable-rate mortgage.

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Should I get pre-approved for a mortgage before I look for a home?
Yes. It's important to get pre-approved for a mortgage before you start house hunting. This lets you know exactly how much home you can afford so you won't waste time looking at properties that are outside of your price range. Your real estate mortgage broker will take you through the pre-approval process to secure the mortgage amount you need.

Can I buy a home with less than a 20% down payment?
Yes, but you would have to take out a high-ratio mortgage. Any down payment that is less than 20% does not qualify for a conventional mortgage, so it must be insured with default insurance from Canada Mortgage and Housing Corporation (CMHC) or Genworth. As of February 15, 2016, the minimum down payment for new insured mortgages will increase from 5 per cent to 10 per cent for the portion of the house price above $500,000. The 5 per cent minimum down payment for properties up to $500,000 remains unchanged.

How can I use my RRSP to help buy my first home?
You can take advantage of the Home Buyers' Plan (HBP). This program allows you to withdraw funds from your RRSP to buy a home. You can withdraw up to $35,000 in a calendar year. Generally, you have to repay all withdrawals back to your RRSPs within a period of no more than 15 years. You will have to repay an amount to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, the amount will have to be declared as RRSP income for that year.

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What are condo fees and who pays them?
Condo fees are monthly maintenance fees that condo buildings charge. Condo fees represent your percentage share of the costs to run the building as a whole and are generally calculated according to the total square footage of your unit. Condo fees are not included as part of your mortgage payment so you will be required to make your condo fee payments separately to your condo corporation once you take possession of your unit.

Why do I need home or condo insurance and when should it start?
Whether you purchase a home or a condo in Canada, you are legally required to have home insurance (also referred to as fire insurance) on your property in order to secure your mortgage. This is to cover the cost of damages to your home and possessions in the event of an unexpected occurrence such as fire, flooding, theft or vandalism. For condo owners, your condo corporation’s insurance policy will not cover your personal losses; therefore, you will need to obtain your own condo insurance to cover the possessions in your unit. You will be required to give a copy of your home insurance certificate to your lawyer prior to your closing date, and the coverage start date of the policy should be the day you take possession of your property.

Are there prepayment options on my mortgage?
Yes, you have prepayment options with both our fixed-rate and our adjustable-rate mortgages. You can prepay up to 20% of the original principal balance each year based on the anniversary of the loan (minimum payment is $100). You can also increase payments by up to 20% of the original registered amount each anniversary year.

Can I change the payment frequency for my mortgage?
Yes, you can change how often you pay your mortgage. You can choose monthly, semi-monthly, bi-weekly or weekly payments.

How can I pay off my mortgage sooner?
The quicker you reduce your principal, the more you can save in interest. In fact, you can save thousands of dollars in interest without making major changes to your lifestyle. Here are four ways to pay off your mortgage sooner.

1. Accelerate your payment schedule. 2. Prepay up to 20% of your mortgage balance each year. 3. Increase your payments up to 20% without penalty. 4. Amortize your mortgage over a shorter time frame.

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What is the difference between refinancing and renewing?
Refinancing is when you arrange a new mortgage for an increased amount before the end of your term. Often, homeowners will refinance their home to access some of the equity they've built in their home to renovate or consolidate debt. All our residential mortgage solutions let you refinance and borrow up to 80% of the current property value of your home (provided you occupy the home). The amount borrowed is added to your existing mortgage.

Renewing is when your mortgage reaches the end of its term. You can choose to pay it off fully or partially without penalty, or you can renew your mortgage for another term of your choice.

How often can I refinance my mortgage?
There is no limit on how many times you can refinance. However, you must qualify each time you apply.

What are the benefits of working with a CMLS affiliate mortgage broker?
As impartial experts, mortgage brokers specialize in finding you the best mortgage products at fair and competitive interest rates. They'll work with you to tailor a mortgage solution best suited for your individual situation.

Talk to CMLS Financial Today

We invite you to learn more and to ask how we can be of service to you.


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