What You Need To Know
So you want to buy a home. Before you actually sit down with a mortgage broker it’s smart to find out what size of mortgage you could get approved for. Here are some of the questions you’ll need answers for in our [pre-approved mortgage application].
When you agree to the terms of this mortgage, it remains that way till the end of the term:
- Mortgage secure for the term
- Remains unchanged for the agreed term
- Penalties assessed if you wish to pay off the mortgage or renegotiate the terms. These can be excessive
- May give option to make extra payments without penalty under “prepayment privilege”
- Rates have tended to be lower than open mortgages in “normal” economic times
The benefit is that you always know what your payments are and can plan accordingly.
A variable rate mortgage may be converted at any time during the term to a fixed rate product. The lender will offer conversion to the closest term to the time remaining on your contract.
For example, if you have 26 months left, then the closest term is 2 years. The lender will offer you their 2 year fixed rate. It’s important to know that there are differences in how payout penalties are calculated for fixed rates vs variable rates – see the next section for details.
This mortgage gives the borrower flexibility. It can be repaid any time without penalty. The borrower can take advantage of lowest interest rates, especially in today’s low interest economy.
- Flexible term
- May be repaid any time
You, the mortgage holder, may be challenged if interest rates take a sharp rise.
Typically this type of mortgage is a short-term option made available by your current mortgage lender when your current mortgage is coming up for renewal.
You may request a convertible mortgage if you want to buy yourself time while trying to decide which mortgage you want to renew into; you are in the process of transferring to another lender; you are selling the property and don’t want to get locked into another contract. These mortgages are typically open, so you won’t have to worry about a payout penalty.
- Secure term as per closed mortgage
- Allows conversion to a longer term without penalty
- Useful option if rates expected to rise
Useful option for seniors who require cash for whatever reason, allowing them to remain in their homes
- For homeowners 55+
- Permits cash withdrawal from home without having to move or sell
- Low interest rate
- Enables homeowner to pay off higher cost debt and other liabilities
Mortgages By The Numbers:
Three Important Facts to Know
What Do I Need to Apply For a Mortgage?
Here are all the different things you need to apply for a mortgage
Salaried or Hourly Wage Employees
- Letter of Employment on company letterhead with name and contact information for party authorized to verify the information; must state minimum guaranteed income/hours, rate, tenure and position. Letters of Employment must be dated within 30 days of application.
- Most recent pay stub: showing year-to- date earnings
- Most recent T4 or ROE* (2 years’ T4’s will be required if using OT / Bonuses / Shift Differential, etc)
- Most recent Notice of Assessment*
*These items may be requested if you are not guaranteed hours or if you have recently changed employment
Additional documents related to your tax returns will be required. Balance Mortgages will help you gather these for your application process.
Don’t know where you put your Tax Documents? No problem! Sign up with the CRA for any-time access to your tax records –
Self-Employed Requirements for Mortgage Application**
- Most recent 2 years’ Notices of Assessment
- Most recent 2 years’ T1 General w/ Statement of Business Activities
- Articles of Incorporation with list of directors and shareholders
- Business Registration
- Most recent 2 years’ Company Financials
**Any two or more items in this category may be requested, depending on the particulars of your business structure
NOTE: if you receive a pension, Child Tax Credit, AISH, Foster Care income, CPP, etc, these incomes may be used – please ask your mortgage broker for more information
We had dealt with Cynthia when she worked with another firm and were so impressed with her knowledge and excellent work that when we were in the market again, we looked for her. She always educated us about our options, which was highly valuable to us.
– Tyler and Caitlin
We appreciate all the work you did for us….It’s been a pleasure working with you. Thank you for helping us during this stressful situation. Also thanks for all your help with our friends, Jim and Arizona. We will definitely refer you to others when we hear of anyone needing assistance.
– Justin and Sally
Help For Realtors & Builders
Does your client need help with their first mortgage? Let us help your clients get the right mortgage to suit their needs and existing lifestyle. Our client education will help you find the affordable home for your clients, while ensuring that they will value your own wok.