Mortgage Information

If you’re thinking of buying a home or transferring or refinancing your existing mortgage, use these handy calculators to:

• Figure out how much you can afford to spend on a home.
• Determine what your mortgage payments will be.
• Compare different ways of paying your mortgage off faster.
• Add lump sum or top-up payments to your mortgage calculation.
• See your amortization schedule (which provides a breakdown of principal and interest payments for the life of the mortgage)

It’s a written commitment from a lender that you will get a mortgage for a set amount at a set interest rate, locked in for 60-120 days, depending on the lender. The commitment is subject to a financial assessment and property appraisal. This service is always free and without obligation.

A pre-approved mortgage gives you an edge. Before you even start house hunting, you’ll know how much you can afford, your interest rate, and your monthly payments. With your financing already mapped out, you can concentrate on finding the right home in your price range.

A pre-approved mortgage shows you’re a serious buyer. In a situation where several people are bidding on the home you want, you may decide to offer the list price and beat out earlier offers.

When you find the home that’s right for you, your next step is to make an offer to purchase the home from the current owner. The owner can accept your offer, make changes to the offer and present you with a counter-offer, or reject the offer.

The Offer to Purchase is a legally binding agreement between you and the person selling the house. It’s a good idea to have your lawyer review it with you before it is presented to the seller. It includes:

• Your name
• The seller’s name
• The address or legal description of the property
• The price you are prepared to pay for the home
• The items you expect to be included in the purchase price
• The amount of your cash deposit
• Your financing arrangements
• The closing date
• Specific terms or conditions that must be met as part of the purchase
• A time limit for meeting these conditions

Discuss the Offer to Purchase with your lawyer before you sign it. Remember, it becomes a legally binding agreement the moment it is accepted. If you decide to cancel an offer that has already been accepted, you could lose your deposit and the person selling the home could sue you for damages. If the seller does not accept your offer, your deposit will be returned.

You’re in the home stretch, finalizing the details of your mortgage and closing the purchase of your new home. Now you need to call your mortgage specialist and send them the following info:

• A copy of the real estate listing
• A copy of the accepted Offer to Purchase
• Information on the source of your down payment
• Income verification if you are employed
• A letter from your employer verifying your place of employment and income, or T4s and Notice of Assessment, or T1 General Tax Return and Notice of Assessment
• Income verification if you are self-employed
• 3 years of Financial Statements and 3 years of Notice of Assessments, or 3 years of T1 General Tax Returns and 3 years of Notice of Assessments

Your mortgage specialist will want to verify the value of the property you are buying, your current financial picture and your credit history, so a property appraisal and credit report will be ordered.

If your down payment is less than 25%, your mortgage is considered "high ratio" and you must pay insurance premiums. You decide whether you want to pay the premium in cash or have your lender add it to your mortgage amount.

Be prepared to pay fees for the mortgage application, credit report and property appraisal.

Closing the purchase
Closing day is the day you become the official owner of your home. However, the closing process usually takes a few days.

Typically, you visit your lawyer’s office to review and sign documents relating to the mortgage, the property you are buying, the ownership of the property and the conditions of the purchase. Your lawyer will also ask you to bring a certified cheque to cover the closing costs and any other outstanding costs.

Once your mortgage and the deed for the property are officially recorded, you become the official owner of the property.