Our most frequently asked questions
How much down payment do I need?
The amount of mortgage down payment required depends primarily on your credit. For homebuyers with fairly good credit, a minimum 5% down payment is required to secure the lowest mortgage rates.
Can I buy a home with no money down?
It wasn’t that long ago where borrowers with good credit could buy a home with no money down. Following the new B-20 mortgage rules accounced in October 2012, the only way to borrow with 0% down payment is to borrow their down payment from a verifiable source (ie, a line of credit, or credit card as opposed to a loan from a friend or family member). Learn more about a no money down mortgage.
Can I use my RRSP for a down payment?
Yes. You can withdraw up to $25,000 from your RRSP tax free per mortgage applicant. This money has to be paid back into the RRSP within 15 years to avoid being charged tax.
Why use a mortgage broker?
When you visit your bank for a mortgage, they are only able to talk to you about their products and their rates. The person you deal with is of course, a bank employee and their duty is the do the best job they can for their employer, the bank, earning them the most money. Would you want to shop for your dream home without a real estate agent or handle a tax audit without an accountant? Your home is the largest purchase you will ever make, and a mortgage broker can end up saving you tens of thousands of dollars over the life of your mortgage loan, if not more.
At CityCan Financial, we represent YOU and not the banks. We have a fiduciary responsibility to look after your best interests and ensure that you are getting the best rate and product available for your needs. We deal with many different mortgage lenders, and receive rate updates from them daily. By dealing with CityCan Financial, there are many more mortgage products to choose from and more choice means lower mortgage interest rates. By dealing with multiple mortgage lenders, we will get them competing for your business! We are also able to shop your mortgage around to multiple lenders with only a single credit check. When shopping for a mortgage on your own, each time someone checks your credit, it drops your credit score.
The best part about dealing with CityCan Financial is that for qualified borrowers, it is a free service, as we get a finders fee from the mortgage lender.
How does a mortgage broker get paid?
With most institutional lenders, mortgage brokers receive a finder’s fee from the lender, which is how they are able to provide their service at no charge to qualified borrowers. How do you know if you are a qualified borrower? If you have strong credit history, solid employment and enough income to support the mortgage loan, then you are a qualified borrower. For unqualified applicants, a brokerage fee is charged, but this is something that will be disclosed to you., then you are a qualified borrower. For unqualified applicants, a brokerage fee is charged, but this is something that will be disclosed to you.
I have bad credit. Can I still get a mortgage?
Just because you have had some credit issues in the past doesn’t mean you can’t get a mortgage, as there are still options open to you. Providing that you have 15% down payment, we can arrange a private mortgage loan or a bad credit mortgage for you. In some cases, more than 15% down payment may be required.
Does it affect my credit score every time a credit check is done?
Yes. You credit score will drop each time a potential money lender views your credit. If you have a borderline credit score, then one extra credit check can move you into a different lending category. If you have solid credit, then a few points from the odd credit check will not affect you in any way. You can obtain your own credit bureau through Equifax at no charge by mail or by fax., however the free credit bureau will not show your credit score. For a charge, Equifax will provide you with a full credit bureau including your beacon score. For more information, you can visit www.equifax.ca.
Is it better to go with a fixed rate or a variable rate mortgage?
This can be a tricky question to answer, as opinions can vary from person to person depending on their ability to handle risk. The big benefit to a variable rate is you typically start off with a lower monthly payment and a lower mortgage rate, but as soon as the prime rate goes up, so does your mortgage rate and so do your monthly payments. However, the rate could also go down having a reverse affect and putting you in a more positive situation. If the rates appear to be in a downward trend, you may want to take a look at your variable rate options, but you must keep in mind that variable rate mortgages are 5 year terms, and anything can happen over those 5 years.
With a fixed rate mortgage, you know exactly what your rate is going to be for the next 5 years as it is locked in. If you are the type that will spend a lot of time worrying about where interest rates are going, than a fixed rate may be a better option.
How long will it take to get my mortgage approved?
Most mortgages approved within 24 hours of application for qualified borrowers but in some cases, mortgage approvals can be granted in as little as two hours. Unqualified applicants usually take longer as there is more work involved in shopping the mortgage around to various lenders.
What documentation to I need to provide?
For most mortgages, a letter from your employer confirming your salary (or guaranteed hours), start date and position, as well as a recent pay stub. If you get paid overtime than your T4s from the past two years will also be required. In some cases, you may need to provide your recent Notice Of Assessment (NOA)as well. These are the basics and added documentation may be required for some mortgage approvals.
How long can you hold a mortgage rate for?
While this can vary depending on the mortgage product, it is most commonly 120 days.
How can I get the lowest mortgage rate?
CityCan Financial deals with over many different mortgage lenders and receives mortgage rate updates daily. By dealing in mortgages on a wholesale level, and by having such a broad choice in options, we are able to find you the lowest mortgage rate you qualify for. Our lenders will compete for your business!
