While the mortgage process can be daunting, we have broken it down into 5 easy steps to help you get started! Plus, a DLC mortgage expert is happy to help guide you every step of the way so it is even easier to make your dreams of home ownership happen.

1. Options: Your mortgage professional has access to 90+ lenders with dozens of solutions to suit your mortgage needs. During our initial consultation, your mortgage professional will review your situation and provide an overview of mortgage options that are best suited to your needs. From there, you can work together to complete your mortgage application and obtain financing.
2. Collection: When it comes to a mortgage application, you’re required to submit the following items to the lender: credit report, agreement of purchase and sale(or estimated mortgage amount if you are refinancing), proof of income/employment, down payment amount, identification and solicitor information. Your mortgage professional is able to assist you with preparing, gathering and sending this documentation in.
3. Submission: Your mortgage professional will submit your mortgage application to the appropriate lender with the mortgage product that best suits your needs. As they work with dozens of lenders from banks to credit unions to trusts and private options, they can put their negotiating power to work for you to get you the best mortgage product.
4. Approval: Once you have been approved for your mortgage, you will be required to sign. From there, you will obtain approval documents including: payment details, mortgage terms and privileges, pre-funding conditions (if they apply). Should the closing date be more than 30 days away, your mortgage professional can also hold the approval documents and monitor the market. When you reach 4 weeks away from closing, they can help finalize the approval documentation.
5. Closing: This is the final step to homeownership where your signed documents are submitted to the lender with all supporting information. From there, the lender will review and approve the final documents and send their instruction package to your lawyer. When you meet with your lawyer, they will require final identification and signatures, and review your closing costs.  It is on the closing day that the mortgage funds will be transferred to your lawyer to close the sale.

If you are looking to purchase your first home, or a new home, in the coming months, reach out to a DLC mortgage expert for the advice and expertise to ensure you get the best mortgage product for YOU.

written by DLC Chief Economist Dr. Sherry Cooper

Approximately 20% of Canadians are self-employed, making this an important segment in the mortgage and financing space. When it comes to self-employed individuals seeking a mortgage, there are some key things to note as this process can differ from the standard mortgage.

Qualifying for a Mortgage

In order to obtain a mortgage as a self-employed individual, most lenders require personal tax Notices of Assessment and respective T1 generals be included with the mortgage application for the previous two years. Typically, individuals who can provide this proof of income – and with acceptable income levels – have little issue obtaining a mortgage product and rates available to the traditional borrower.

Self-Employed Categories

1. For those self-employed individuals who cannot provide the Revenue Canada documents, you will be required to put down 20% and may have higher interest rates.
2. If you can provide the tax documents and don’t have enough stated income, due to write-offs, then you have to do a minimum of 10% down with standard interest rates.
   1. If you are able to put down less than 20% down payment when relying on stated income, the default insurance premiums are higher.
3. If you can provide the tax documents, and you have high enough income, then there are no restrictions.

Documentation Requirements

For those individuals who are self-employed, you must provide the following, in addition to your standard documentation:

• For incorporated businesses – two years of accountant prepared financial statements (Income Statement and Balance Sheet)
• Two most recent years of Personal NOAs (Notice of Assessments) and tax returns
• Potentially 6-12 months of business bank statements
• Confirmation that HST/Source Deductions are current

Calculating Income

When it comes to calculating income for a self-employed application, lenders will either take an average of two years’ income or your most recent annual income if it’s lower.

If you’re self-employed and looking to qualify for a mortgage, or simply have, reach out to a Dominion Lending Centres mortgage professional today! We can work with you to ensure you have the necessary documentation, talk about your options and obtain a pre-approval to help you understand how much you qualify for.

written by DLC Chief Economist Dr. Sherry Cooper

When it comes to mortgages, it can be easy to get overwhelmed by the sheer number of options! Fortunately, we are here to help! Below are some of the mortgage details that you should understand to ensure that you are getting the best mortgage for YOU:

Interest Rate Type

Interest rate is one of the major components to your mortgage and it is important to decide whether you want a fixed-rate, variable-rate or protected (capped) variable-rate mortgage.

A fixed-rate mortgage is ideal for new home owners or those on a fixed income who are more comfortable with a stable monthly payment.

A variable-rate mortgage is ideal for individuals who have room in their budget and want to take advantage of potential interest rate drops – keep in mind, with this mortgage you pay more if the rates go up!

Lastly, the protected (capped) variable-rate mortgage operates similarly to variable-rate, except with a maximum (or capped) rate allowing you to take advantage of interest rate decreases while never paying above a set amount should the rates rise.

Amortization

This is the life of your mortgage and is typically a 25-years period whereby you would pay off the entirety of the loan. You can choose a shorter term, which would result in higher payments but allow you to pay less interest over the lifetime of your mortgage and be mortgage-free faster! Or, you can opt for a longer amortization period, which allows for smaller monthly payments.

Payment Schedule

This is the frequency that you make mortgage payments and ranges from monthly to bi-monthly, bi-weekly, accelerated bi-weekly or even weekly payments. There are many great calculators on My Mortgage Toolbox app (available through Google Play and the iStore) that can help you calculate and compare these payment schedules to see what works best for you.

Mortgage Term

The standard mortgage term is 5-years and refers to the length of time for which options are chosen and agreed upon, such as the interest rate. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.

Open vs. Closed

Open mortgages give you the option to increase mortgage payments or make lump sum deposits on your loan. A closed mortgage does not allow additional payments without penalties.

High Ratio vs. Conventional

A conventional mortgage is where you put the standard 20% down on your home. However, as not everyone is able to do this, many buyers will end up with a high-ratio mortgage product. High-ratio mortgages need to be insured due to financial institutions only being allowed to lend up to 80 percent of the homes purchase price WITHOUT mortgage default insurance. Therefore, if you choose a high-ratio mortgages over a conventional one, you will pay a monthly insurance premium.

Contact a DLC mortgage expert today to get started on your homebuying journey with expert advice and solutions to suit YOUR unique needs!

written by DLC Chief Economist Dr. Sherry Cooper

The first-time homebuyer incentive program is a shared-equity mortgage with the Canadian government that helps qualified first-time buyers reduce their monthly mortgage payments to better afford a home!

The Incentive: This program allows you to obtain an incentive from the government to assist with your down payment, thereby lowering your overall mortgage amount and, in turn, your monthly mortgage costs.

• 5% or 10% for a first-time buyer’s purchase of a newly constructed home
• 5% for a first-time buyer’s purchase of a resale (existing) home
• 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

Qualifying for the Incentive: This program is designed to assist first-time homebuyers, therefore you must:

• Have never purchased a home before
• Have not occupied a home that you, your current spouse or common-law partner owned in the last 4 years
• Have recently experienced a breakdown of marriage or common-law partnership

If you meet the above criteria, further qualifications are based on your income and status as follows:

• Your total qualifying income is no more than $120,000 ($150,000 for homes in Toronto, Vancouver, or Victoria)
• Your total borrowing is less than four times your qualifying income (four and a half times your income if you’re purchasing in Toronto, Vancouver or Victoria)
• You are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
• You meet the minimum down payment requirements

Additional Costs: With the incentive, there are a few additional costs to be aware of such as additional legal fees (your lawyer is closing two mortgages, the one on your behalf and that on the Government’s behalf), appraisal fees to determine the repayment value of your home when it comes due, plus other potential fees such as refinancing or switching costs if you decide to move or update your mortgage.

Repayment Process: When it comes to repayment of the incentive, the homebuyer is required to pay back after 25 years or when the property is sold, whichever comes first. They are also able to repay anytime prior to this without penalty. The repayment is based on fair market value at the time of repayment and you would pay back what you received. For instance, if you received a 5% incentive, you would repay 5% of the current home value at the time of repayment.

Keep in mind, if you choose to port your mortgage or go through a separation during the term and want to buy out your co-borrower, you will have to repay the incentive sooner.

Click here to learn more about the First Time Homebuyer Incentive and contact a DLC Mortgage Expert today to get started on your homebuying journey!

written by DLC Chief Economist Dr. Sherry Cooper