GETTING A MORTGAGE  

Most mortgage lending companies grant credit based on 2 factors:

1. Your Gross Debt Service Ratio (GDS Ratio), Total Debt Service Ratio (TDS Ratio), a satisfactory credit report and sufficient income and years on the job. 
2. The security contained in the value of the home – for a conventional first mortgage:  up to 75% of the appraised value or sale price, whichever is lower.

See attached page for CMHC mortgage for loaned to value ratio over 75%)

All mortgage lending companies look at your ability to pay your debts,  based on previous loans, credit cards and credit information available through credit bureaus.

We have dealt often with the Royal Bank, and Marie Illerbrun  in procuring financing for our clients.  Marie is an experienced Mortgage Specialist who will put together the best mortgage for you in the most efficient manner.

She provides:

• pre-arranged mortgages 
• extended interest rate guarantees at competitive prices
• first time home buyer incentives
• 6 month to 25 year terms
• choice of weekly, bi-weekly, semi-monthly or monthly payments
• life and disability insurance
• free professional advise and service where it’s most convenient for you 
• convenient appointments, including early mornings, evenings, weekends and holidays 
• Plus more!

Should you require more information, Marie can be reached by paging her at 823-7067.

Whether you choose to work with Marie or any other financial institution, it is a necessary step to be pre-approved for your mortgage, in order to determine the price range that we are going to look at to find you your new home.  

Conventional Mortgage

(mortgage is less than 75% of the purchase price)  

Assuming the purchase price is $150,000 ESTIMATED MONTHLY COSTS and 7% interest rate

Plus Miscellaneous expenses (set up utilities, moving expenses, etc.)

High Ratio Mortgage

(mortgage is more than 75% of the purchase price)

Assuming the purchase price is $150,000

Plus Miscellaneous expenses (set up utilities, moving expenses, etc.)

ESTIMATED MONTHLY COSTS

Assuming 7% Interest rate 

Plus phone, cable TV, insurance, etc.

High Ratio Financing

(Canada Mortgage & Housing Corporation)

YOU NEED MORTGAGE LOAN INSURANCE WHEN YOU BORROW MORE THAN 75% OF THE LENDING VALUE OF A HOME.  THIS IS CALLED A HIGH RATIO MORTGAGE LOAN

PROGRAM 1: Minimum 5% Downpayment

• You must be buying or building a home as your principal Residence
• Maximum House Prices:  $250,000

• Maximum Loan Amount is 95% of the lending value of the house

PROGRAM 2: Anything over $250,000

Maximum Loan Amount is 90% of the lending value of the house

CMHC PREMIUM

COSTS:

CMHC Application Fee: $235 due at time of application

CMHC PREMIUM can be paid on closing but more often it is added to the mortgage amount and paid over the duration of the mortgage.

Provincial sales tax of 8% of the CMHC PREMIUM must be paid at the time of closing of your house (not added to the mortgage).

For more details, talk to your Mortgage Specialist or you can call CMHC toll free at 1(877) 823-7444.

Ontario Home Ownership Savings Plan  

The purpose of this program is to help Ontario residents save for a first home.  Persons with net incomes of less than $40,000 or couples with combined net incomes of less than $80,000 can benefit from the program.

You can qualify to open on OHOSP if: 

• you are 18 years of age or older  
• you are a resident of Ontario
• you have a valid Social Insurance Number
• you have never owned an eligible home
• your spouse has not owned a home since your marriage, or since the establishment of your spousal (common-law) relationship
• you have never before opened an OHOSP  

Your OHOSP funds will only be released when you buy an eligible home in Ontario,suitable to live in year-round.  You or your spouse must live in the home for at least 30 days in a row within two years from the date you took ownership.

If you are planning to build a home, you may use your savings to build the home but not to purchase the land.  

When an OHOSP planholder files an annual income tax return, a claim for an OHOSP tax credit of up to $500 per person ($1,000 per couple) may be made.  This tax credit is based on yearly income and  the amount deposited into the plan during the year.  

First time homebuyers who purchase a newly built home, can apply for a rebate of the Land Transfer Tax.  

You do not need to have an OHOSP to take advantage of this offer nor is there a limit on your income.

A home purchased for up to $200,000 will receive a full refund of the Land Transfer Tax.  Homes purchased for more than $200,000 will pay the Land Transfer Tax on the balance (the Land Transfer Tax on $200,000 is $1,725 so this is the maximum rebate).

For more details, contact the Ontario Ministry of Finance at 1-800-263-7965.

This program is available as of the date of this document so, please call the Ministry of Finance to confirm if this program is still available). 

RRSP Homebuyer’s Plan  

The Home Buyer’s Plan allows you to withdraw up to $20,000 per purchaser from your RRSP to buy or build a qualifying home.   

If you have saved money as a downpayment, you can put it into an RRSP to get the tax refund and then you can pull it back out of your RRSP to use it towards your downpayment.

TO PARTICIPATE IN THIS PROGRAM:

• You must have had the money in your RRSP for a minimum of 90 days before you withdraw the funds (to get the tax refund)
• You must not have owned a home in the previous 4 years. 
• You must have a non locked-in RRSP 
• You must be a resident of Canada  
• You must occupy the qualifying home as your principal residence no later than one year after buying or building the home
• You must repay your RRSP in a maximum of 15 years (paying at least 1/15 of the amount each year)

Please speak with your RRSP issuer or call Revenue Canada toll free at 800-959-8281