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There are a wide range of financial institutions that are involved in the mortgage industry in Canada. Some of these include: Chartered Banks, Loan corporations, Trust companies, Credit Unions, Finance companies, Pension Funds, Life Insurance companies, Private Individuals.

We will help select the mortgage lender that is right for you!

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A mortgage is a large debt and should be life insured, for you family's peace of mind. Some lenders include life insurance as part of their cost while others will let you insure the mortgage yourself. Mortgage Intelligence always recommends mortgage insurance in some form.

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In the Province of Ontario, Mortgage Intelligence is the Mortgage Broker. We are mortgage agents for Mortgage Intelligence.

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For most people the Mortgage Intelligence agent provides a free service. They receive their fee from the lender providing your mortgage. If there is a fee involved it will be fully disclosed to you.

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No - because the lender either has to pay its own sales staff to originate mortgages or it can pay a broker - it's all the same.

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Usually the shorter the term the lower the rate. However many people prefer the comfort of a longer-term mortgage and as an example we have provided a historical tracking of the five-year rates. This is another are where we can help.

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The amortization period has a dramatic effect on the amount of interest paid over the length of the mortgage. Consider the example of a $150,000 mortgage with an interest rate of 6.20%*

With a 25 year amortization the monthly payments are $977.61

With a 20 year amortization the monthly payments are only increased by $107.57 to $1,085.18

The savings in interest would be $32,843.40

With a 15 year amortization the monthly payments are increased by only $298.03 to $1,275.64

The savings in interest would be $63,669.38

*The example assumes the interest rate will remain constant through the whole amortization period.

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Most mortgages have very flexible payment alternatives. Weekly, bi-weekly, or monthly payments are most common. These choices also have a great effect on the overall interest payments.

Consider the example of a $150,000 mortgage with an interest rate of 6.20% over a 5 year term.

How does the 5% down payment program work?

Under the 5% down payment program, the minimum down payment of 5% of the purchase price or appraised value, whichever is less. The down payment must be from the customer's own resources or an outright financial gift from immediate relatives. If the minimum equity requirement is being met by way of a financial gift, the funds must be in the possession of the borrower at the time of application. Borrowers are also required to demonstrate at time of application the ability to cover a closing cost equal to at least 1.5% of the purchase price.

Maximum GDSR = 32%(Principal + Interest + Property taxes + Heating costs must not exceed 32% of gross income).

Maximum TDSR = 40% (Principal + Interest + Property taxes + Heating costs + monthly obligations including credit cards and loans must not exceed 40% of gross income).

Minimum loan term for CMHC is 6 months with loan qualification based on the current 3 year rate.

Genworth (GE Capital) currently has no minimum term requirement. 

The mortgage loan insurance premium is 2.75% of the mortgage amount (Premium can be added to the mortgage or paid separately).

Credit history must be in good standing.

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Each purchaser may borrow up to $20,000 from their RRSP under the  Home Buyers’ Plan. (The funds must have been in the RRSP for

at least 90 days prior to withdrawal to be eligible under the program) Provided you buy or build a qualifying home and meet all of the conditions for making a withdrawal under the Home Buyers’ Plan, you can use the particular funds you withdrew under the Home Buyers’ Plan for other purposes. (Not only down payment and closing cost, but for any other purpose you choose.) This program is available to the first time home buyer only. (You are considered a first time home buyer if, at any time during the period beginning January 1, 1995 and ending 31 days prior to your withdrawal in 1998, you did not own a home while you occupied

it as your principal place of residence) This information is current throughout 1999. And the program has been extended indefinitely. Repayment of the funds back to your RRSP can be made over 15 years. (The repayment period starts in 2001 and ends in 2015) If the amount is not repaid in a year, that year’s repayment amount will be added to your income and taxed.  In order for the home to qualify it must be located in Canada and intended to be used as your principal residence. This program may be used in connection with the 5% down program.  If you have any questions about the HBP program you can   call the General Enquiries section of your local tax services office.   You can find the address and telephone number listed under   “Revenue Canada” in the Government of Canada section of your   telephone book. If you use a Telecommunication Device for the deaf (TDD),   you can get tax information by calling the toll-free, bilingual   TDD enquiry service at: 1-800-665-0354

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If you are applying for a pre-approved mortgage, have following information ready to give to your Mortgage Intelligence agent:

Have your employer give you a letter on company letterhead outlining your name, position, gross annual income, and  number of years employed with the company.

If you are self-employed, you will need three years financial statements, and tax returns (together with official  assessment from Revenue Canada).

Social Insurance Numbers. 

At least 3 years history of residences and employers. 

Know your banking information (i.e. institutions name,

address, type of accounts, account numbers)

Know your assets and their value (i.e. cash amounts,

stocks, bonds, RRSPs, car).

Know your liabilities (i.e. car loan, credit card balances). 

Also, be sure and advise your Mortgage Intelligence

agent about any past credit problems you may have had.

Finally, write down a list of questions you would like to have answered.

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If there is ‘one’ thing that causes problems which may delay the closing of your house it’s verification of the Down Payment. Here’s why:

To meet the Requirements of Canada Mortgage and Housing Corporation, GENCOR (GE Capital) and the Major Lending Institutions on or before the issuance of a lending commitment you will be asked to provide "Confirmation of Down Payment" from Non-borrowed funds in one or more of the following forms.

Down Payment from the Sale of an Existing Property  - You will be required to provide a copy of the unconditional  "Purchase and Sale Agreement" on your existing property. This needs to be accompanied by a copy of the statement  of "Mortgage Balance" on any mortgages presently held against the property.  The difference between the sale price and the mortgages owing will substantiate the funds available for your down payment.

Down Payment from a Gift  - All or part of the minimum  equity requirement may be provided by way of a financial gift,  as long as all of the following conditions are met:

the donor is an Immediate relative of the borrower;

the Approved Lender has verified that the money is a genuine gift; and

the Approved Lender has verified that the funds are in the borrower’s possession prior to the time of the application to CMHC or GENCOR for mortgage loan insurance.

The Approved Lender will verify the authenticity of the gift by obtaining  a written confirmation, signed by the donor and the borrower, which will include the following points:

the money is a genuine gift from the donor and does not ever  have to be repaid;

no part of the financial gift is being provided by any third  party having any interest (direct or indirect in the sale of the subject property)

The Approved Lender is not required to forward this confirmation to CMHC, but is expected to retain the Information in its paper or electronic loan record.

Down Payment from Your Own Resources - You must supply verification satisfactory to C.M.H.C. or GENCOR and the lender of accumulated savings from non-borrowed funds. This may be in the form of a copy of your bank book confirming a balance equivalent  to your down payment including the amount of deposit confirming  the savings of said amount for a period of not less than 3 months. Should a substantial deposit have been made recently, the source of such funds, i.e. Bonds, Stocks, G.I.C.’s or RRSP receipts will also be required. To avoid any delay in funding your transaction  we suggest that you provide a form of the above   noted confirmation at least 14 days prior to your closing date.

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The Ontario Land Transfer Tax refund to be extended to continue helping families buy their first home and to support job creation in the housing industry, Ontario passed legislation (fiscal 2000) to extend the Land Transfer Tax (LTT) refund. The Land Transfer Tax refund applies to first-time buyers of newly built homes.  The maximum refund is $2,000 and equals the land transfer tax payable on a house valued at $227,500.

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You must be at least 18 years old.

The refund applies to a newly built home.

Application for refund must be made within 18 months after the date of conveyance.

The purchaser must occupy the home as his or her principle residence within 9 months of the date of conveyance.

You cannot have previously owned a home, or an interest in a home, anywhere in the world.

If you have a spouse or same-sex partner, he or she cannot have owned a home, or an interest in a home, anywhere in the world while he/she was your spouse or same-sex partner.

You cannot have received an OHOSP-based refund of land transfer tax.

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The amount of the refund will be the entire amount of tax paid or payable, up to a maximum of $2,000.  If you own less than 100% interest in the new home, the amount will be reduced and calculated according to the amount of your interest in the new home. 

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You can receive an immediate refund at the time of registration by submitting a properly completed – Land Transfer Tax Refund Affidavit for First Time Purchasers of Newly Constructed Homes - to the Land Registry Office.

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Ontario Land Transfer Tax:  0.5% on the first $55,000 of the purchase price; plus, 1% on the balance of the purchase price up to $250,000; plus, 1.5% on any amount over $250,000 up to $400,000; and then 2.0% on the balance of the purchase price over $400,000.  The land transfer tax is due on closing and reflected in the “Statement of Adjustments” which your lawyer prepares prior to closing day.

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This program is designed for people who wish to purchase a home that may require some immediate upgrades . . . a new electrical service, a new roof, central air, a new furnace, new siding, eaves, soffit, fascia, doors, windows, a new kitchen, carpeting . . . or any other renovation that would increase the value of the home.

The way it works is like this…Let’s assume that you are a first time buyer and have 5% down payment.  Before the mortgage financing is arranged, written quotes are obtained from licensed contractors for the repairs and or the improvements to be done to the home.  When the application for mortgage financing is made, the request is made for 95% of the purchase price PLUS 95% of the cost to complete the improvements.  Note: The lender will “hold-back” on closing the “improvement” portion of the mortgage until the work has been completed and inspected, normally within 30 to 60 days of closing.  Once the work has been completed, the lender will advance the balance of the funds and the contractor can be paid.

What does this mean?  Let us give you an example…

Therefore, an application is made for a mortgage in the amount of $104,500, which represents 95% of the purchase price plus 95% of the improvements.

On closing this is what happens…The Mortgage advanced to complete the purchase is $95,000 plus the original 5% from the purchaser’s down payment ($5,000) sufficient funds to complete the purchase of $100,000.

After closing the contractor completes the improvements (normally within 30 to 60 days after the closing) the lender advances the hold-back of $9,500, the purchaser pays the additional 5% of the cost of the improvements ($500) and the $10,000 owed to the contractor can be paid as per the original quote for the work.

Everyone’s a winner! 

The purchaser is happy because they got $10,000 of improvements done to the home with a cash outlay of only $500 (the balance was financed with their mortgage).

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You may be able to claim a rebate for a portion of the GST you pay on the purchase price or cost of building your home if you buy a new or substantially renovated home, mobile home, floating or modular home from a builder or vendor. Or, you buy a share in the capital stock of a co-operative housing corporation, or construct or substantially renovate your home (or hire someone to do so).  Also applicable if your home is destroyed by fire and is rebuilt.  Contact the Canada Customs and Revenue Agency in your community for the Completion Guide and Application Form. In most cases, your solicitor will take care of this for you.

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Rule of Thumb:  2 - 3% of the Purchase Price

To avoid any surprises on closing, here is a list of what to expect in the way of costs.

Deposit:  Part of your down payment, a deposit is due upon acceptance of your offer.

Home Inspection:  Prepared by a qualified inspector to assess the property for defects and poor maintenance.

Appraisal:  Prepared by an appraiser chosen by the lender, CMHC or GE  (if applicable).

Legal Fee/Disbursements:  Your lawyer will quote the fee for closing the purchase and mortgage(s) plus an approximation for the disbursements, which includes registration fees, courier costs, photocopies, etc.  Ask for an estimate.

Land Survey or Title Insurance:  Your lawyer or the lender will specify whether a survey is necessary or if title insurance will be acceptable in lieu of a survey.

Fire Insurance:  You will have to arrange and maintain fire and extended coverage insurance for the outstanding balance of the mortgage or the replacement value of the building.

Ontario Land Transfer Tax:  0.5% on the first $55,000 of the purchase price; plus, 1% on the balance of the purchase price up to $250,000; plus, 1.5% on any amount over $250,000 up to $400,000; and then 2.0% on the balance of the purchase price over $400,000.  The land transfer tax is due on closing and reflected in the “Statement of Adjustments” which your lawyer prepares prior to closing day.

Interest Adjustment:  Monthly mortgage payments are usually due on the first of the month.  Unless the closing date is the first of the month, you must prepay the amount of the interest accruing up to the 1st day of the following month known as the “interest adjustment date” (IAD).  If however, you choose bi-weekly or weekly payments your interest adjustment period may be much shorter.

Prepaid Expenses:  If the Vendor has prepaid any other expenses such as utilities, water and sewage taxes, oil in tank or property taxes, they must be compensated.  This will be reflected in the Statement of Adjustments.

Property Tax Hold-back:  If the lender is collecting and paying property taxes you may be required to pay to the lender an amount to ensure sufficient funds are available to pay the next instalment of property taxes when due.  An alternative to a property tax holdback is for the lender to increase the tax portion of the regular payment proportionately to ensure sufficient funds are on hand in time to pay the taxes when due.

Other Fees: Occasionally, a lender or the broker will charge a fee for providing the mortgage.  If so, these costs should be disclosed to you at the time the Statement of Mortgage (disclosure statement) is issued to you.

GST:  Is payable on all new homes, commercial properties and land.  GST is NOT payable on un-renovated residential re-sales.

Moving Expenses:  You may have to allow for the expense of a professional mover or the rental of a moving van.

Appliances:  You will likely need four major appliances.

Decorating:  Carpets, drapes, furniture and painting may be necessary.

Repairs:  You may have some immediate renovations to do especially if the financial institution withholds some of the mortgage money on the condition specific repairs be made.

Tools:  You may need lawn tools, garbage cans and snow removal equipment.

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