What is a mortgage pre-approval?
A fully underwritten mortgage pre-approval provides written confirmation that you are qualified to purchase a house up to a maximum purchase price. The pre-approval often provides an interest rate guarantee from a lender for a specified period of time, usually 60 to 120 days.
Most successful real estate professionals will want to ensure you have a pre-approved mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range.
A pre-approved mortgage is one of the first steps a home buyer should take before beginning the buying process.
What is the minimum down payment needed to purchase a home?
To qualify for a high ratio insured mortgage you will need a down payment of 5% of the total purchase price of the property.
For a conventional mortgage, you will need a minimum down payment of 20% of the total purchase price of the property.
What are CMHC (Canada Mortgage and Housing Corporation), Genworth and Canada Guaranty?
These are the 3 providers of mortgage loan insurance. Mortgage loan insurance is required by lenders when home buyers make a down payment of less than 20% of the purchase price. These are called high ratio insured mortgages. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5%.
There is a cost involved based on a percentage of the home’s purchase price. The cost is referred to as an insurance premium and is usually added on to your mortgage.
What Documentation Is Required To Get A Mortgage?
The documentation that is required to get a mortgage will vary from buyer to buyer especially for those who are self-employed. Common documentation we ask for include ID, paystubs and verification of employment.
Fixed or variable-rate mortgage?
The interest rate on a fixed-rate mortgage is set for a pre-determined term – usually between 1 to 5 years. There is peace-of-mind knowing that your interest rate won’t change during your term no matter what the market conditions are.
With a variable rate, the payments remain the same each month, but the interest rate fluctuates based on market conditions.
The above frequently asked questions are only some of the most popular questions. If you would like to learn more, please contact me by phone @ 204-371-9284 or email lisag@onelinkmortgage.com.
