MORTGAGE BROKERS Mortgage brokers don’t actually lend you the money; they provide you with mortgage advice, help you choose a lender, and work on your behalf to secure you the best mortgage terms and conditions. When looking for a mortgage broker, visit www.caamp.org to find out if the broker is a member of the Canadian Association of Accredited Mortgage Professionals and is an Accredited Mortgage Professional (AMP). You can find a mortgage broker by visiting the websites of the following provincial associations: www.mbabc.ca (British Columbia), www.amba.ca (Alberta) and www.imba.ca (Ontario). If you’re using a real estate agent, he or she may also be able to recommend a mortgage broker.
CREDIT SCORE AND HISTORY Credit and work history are very important when trying to obtain a mortgage. Unfortunately, as a newcomer to Canada, you may not have a credit history that is accessible to Canadian lenders. If you want to buy a home, it is important to begin building a new credit history as early as possible. Talk with your bank. They will be able to help you get a credit card and plan to build a credit history that will help you buy your home. Here are some tips that will help you show that you are able to repay a mortgage: 1. Open a bank account and use it regularly. 2. Consistently pay your bills on time, including rent, utilities, cable, and insurance premiums. 3. Apply for small loans from your bank to begin proving that you can pay on time. 4. Apply for a credit card. 5. Try to remain with the same employer for an extended period of time. Get more information. For a fee, you can obtain your credit score and report. Visit the website of one of the following credit reporting agencies to f ind out how to obtain your credit report: Equifax: http://myservices.equifax.ca/CDN40_prdlist TransUnion: www.transunion.ca
DOWN PAYMENT AND MORTGAGE LOAN INSURANCE
The amount of your mortgage will be determined by the price of the home minus an initial cash payment (called the down payment) made up front. If the down payment is less than 20% of the value of your new home, your lender will probably require “Mortgage Loan Insurance” . In addition to a lower down payment, Mortgage Loan Insurance will help you access interest rates that you otherwise wouldn’t have been able to negotiate. The cost for Mortgage Loan Insurance, called a premium, is usually offset by the savings you get from lower interest rates. CMHC is Canada’s leading mortgage loan insurer. We have helped newcomers with permanent resident status become homeowners with a minimum down payment starting at 5%* – regardless of how long they have been in Canada. Non-permanent residents can also purchase a home with a minimum down payment of 10% of the value of the home. Ask your lender about features and associated premiums related to CMHC’s Mortgage Loan Insurance or simply visit www.cmhc.ca and type “mortgage loan insurance” in the search box. Mortgage Loan Insurance is not the same as mortgage life insurance, which pays off your mortgage in full if you or your spouse dies.
SOURCES OF CREDIT HISTORY FOR MORTGAGE LOAN INSURANCE
CMHC will consider factors other than a traditional credit history when processing the application for Mortgage Loan Insurance from your lender. For example, CMHC will consider the payment of rent or room and board for a 12-month period, plus proof of one additional payment (for example, a utility or cable bill) or documented regular savings for a 12-month period. If this is not available, CMHC will consider payment of any three bills for 12 months. These could include: utilities, cable, childcare, insurance premiums, or documented regular savings. CMHC will also consider factors that show you are able to repay debt, such as a history of dealing with your bank.
* The minimum down payment requirement for mor tgage loan insurance depends on the purchase price of the home. For a purchase price of $500,000 or less, the minimum down payment is 5%.When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining por tion. Mor tgage loan insurance is available only for proper ties with a purchase price or as-improved/renovated value below $1,000,000.
Canada Mor tgage and Housing Corporation 6
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