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F.A.Q.
Who is eligible for a mortgage ?
In recent years, new financial institutions have arrived in Quebec . These offer innovative solutions to allow many types of borrowers to purchase or refinance a property.
Who is eligible for mortgage financing?
- Salaried Employees
- Entrepreneurs
- A Self-Employed person
- A retired person
- Investors
- A Person with poor credit
- A Person with prior bankruptcies/other financial problems
- A Person with no down payment
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What is a credit report ?
A credit report is the information that is contained in an individual's credit file. A credit file is created when a person first borrows money or applies for credit and contains all the information that a credit reporting agency has received from companies that have extended credit to you. On a regular basis, companies that lend money or issue credit cards to an individual - including banks, finance companies, credit unions, retailers - send specific factual information related to the financial transactions they have with you to credit reporting agencies.
Credit information is gathered by credit reporting agencies, sometimes called credit bureaus. There are two major credit reporting agencies in Canada :
Equifax And/or
Transunion
They store and maintain credit information about individual Canadians for use by members of the credit reporting agency. The credit reporting agencies organize and store this information so that it can be referred to in the future, with your consent.
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What are a conventional mortgage and a high-ratio mortgage ?
A conventional mortgage is a loan for up to 80% of the appraised value or purchase price of the property, whichever is less. The remaining 20% (called the downpayment or equity ) comes from your resources.
Example : purchase price or market value $100,000: mortgage amount $80,000.
- A high-ratio mortgage is a loan for more than 80% of the appraised value or purchase price of the property, whichever is less.
Example : purchase price or market value: $100,000, mortgage amount: $90,000.
- A high-ratio mortgage must be insured u under Canadian law. This is to protect the financial institution against any mortgage default in the event that the borrower cannot make his/her mortgage payments over a period of time.
- The insurers for this type of loan can be:
- This insurance is not to be confused with mortgage life insurance. It is possible for the lending institution to require that a mortgage be insure even though the loan is for less than 80% of the value.
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What is the Home Buyer's Plan (HBP)?
The Home Buyers' Plan (HBP) allows you to withdraw up to $35,000 from RRSP's to buy or build a qualifying home for yourself (as a first-time home buyer) or for someone who is related to you and is disabled. You may still be considered a first-time home buyer if you own a rental property or if you have not recently owned a home. You can make withdrawals from more than one RRSP as long as you are the annuitant (plan owner) of each RRSP. Your RRSP issuer will not withhold tax on these amounts. Generally, you will not be allowed to withdraw funds from a locked-in RRSP.
You do not have to include eligible withdrawals in your income when you withdraw funds from your RRSP under the HBP; however, you have to repay the amounts over a 15-year period.
Conditions
Certain conditions must be met before you can withdraw funds from your RRSP under the HBP. To consult all conditions, you must refer to Government of Canada.
Important dates
October 1: Normally you must buy or build the home before October 1 of the year after the year of the withdrawal. For example, if you withdrew funds from an RRSP in March 2022, you must buy or build the home before October 1, 2023.
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Will my former poor credit or my prior bankruptcies automatically keep me from being approved for a mortgage?
The ever evolving financial markets make place for new financial institutions that offer a broad range of non conventional mortgage products adapted to all types of borrowers and their different economic situations. This allows for those who once only dreamt of owning a home and having a mortgage to now turn that dream into a REALITY.
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What documents will I be asked to provide?
Probably, lenders will ask those documents to confirm your revenue, your down payment along with the type of transaction you may apply. It is your responsibility to provide this information.
Table 1
| BORROWER’S REVENUE |
Salaried employees
Letter of Employment with salary, starting date, status and occupation
1 or 2 Last pay stubs
Self employed
1 to 3 years of Federal Notice of Assessment (if appropriate)
1 to 3 years of Federal income tax return (if appropriate)
Entrepreneur ( corporation or registered )
Financial statement for 1 to 3 years (if appropriate)
Owner of other properties
Last income tax return and lease(s)
|
| PROOF OF DOWN PAYMENT |
RRSP
Last statement (90 days)
Investment
Last statement (90 days)
Bank account
Account statement showing 3 months of transactions (if appropriate)
Gift from a family member : parents, children, siblings only
Letter from the donor specifying that the funds do not need to be repaid.Proof that funds are deposited in the borrower's account.
Sale of other property
Offer to purchase
Last mortgage statement
Copy of buyer’s final approval letter |
Table 2
| PURCHASE
If new building………
|
-Offer to purchase
-MLS description (if existing)
-Lease (if existing)
-Proof of borrower revenue (refer to table 1)
-proof of down payment (refer to table 1)
Building Plan & specifications |
| REFINANCE |
-Land Survey (certificate of location)
-City and school tax account
-Last mortgage statement
-Proof of borrower revenue |
| RENEWAL /TRANSFER |
-Dee of sale
-Deed of loan
-Land survey
-Current home insurance certificate
-Last City and School tax account
municipale et scolaire
-Last mortgage statement
-Proof of borrower revenue |
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What do I commit to when applying online ?
The process is free and there is no commitment on your part. It is simply a tool for us to receive your information and analyze the different options that will be available to you.
Since purchasing or refinancing a property will be one of the biggest investments you'll ever make, it is very important to know what your options are and what solutions will best suit your needs.
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