10 Access mortgage rates and products from different lenders, banks, trust companies, investors and financial institutions.
9 Fast credit and mortgage pre-approvals with no cost or obligation.
8 Stay up-to-date on all mortgage rates, terms, products and re-payment options available on the market.
7 Specialize in mortgages and are knowledgeable on current market trends.
6 Experts at matching you with the best-suited mortgage.
5 Get mortgage rates at wholesale, guaranteed up to 120 days.
4 they work for YOU, not for the big banks.
3 They increase competition in the market place, thus keeping rates low.
2 Free consultation with no fees. They save you money!
1 Brokers have vested interest in satisfying your needs since they rely on your referrals and repeat customers.
Here's How Your Mortgage Application Process Works
We discuss and complete the mortgage application with you the client by phone or in person can take the information you have submitted to us via this web site
We submit your application for Pre-Approval from a Financial Institution
You select a property with your realtor and get an accepted offer
You call Macklem Mortgage Services Ltd. at (250)-720-1604 to advise us of the accepted offer
Our office, following the steps below, now processes your mortgage:
Submit the contract to lender
Appraisal is ordered, if required
CMHC or GE Capital approval is requested, if required
Mortgage receives final approval
Follow-up meeting with Macklem Mortgage Services Ltd. to reiew your mortgage
Meet with lender to sign documents, if required
Documents sent to lawyer
Transaction complete
Realtor delivers you the keys to your new home
YOU MOVE IN!!!
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Frequently Asked Questions
What are the sources for mortgage financing?
There are a wide range of financial institutions that are involved in the mortgage industry in Canada. Some of these include:
Chartered Banks, Loan Corporations
Trust Companies, Credit Unions
Finance Companies, Pension Funds
Life Insurance Companies, Private Individuals
Will I need mortgage insurance?
A mortgage is a large debt and should be life insured, for your family's peace of mind. Some lenders include life insurance as part of their cost; others will let you insure the mortgage yourself. But Mortgage Intelligence always recommends mortgage insurance in some form.
What is the best term to consider?
Usually the shorter the term the lower the rate. However many people prefer the comfort of a longer-term mortgage and as an example we have provided a historical tracking of the five-year rates. This is another area where your Mortgage Intelligence Consultant can help.
How does my amortization affect the amount of interest I pay?
The amortization period has a a dramatic effect on the amount of interest paid over the length of the mortgage. Consider the example of a $150,000 mortgage with an interest rate of 6.20%*
With a 25 year amortization the monthly payments are $977.61
With a 20 year amortization the monthly payments are only increased by $107.57 to $1085.18. The savings in interest would be $32,843.40
With a 15 year amortization the monthly payments are increased by only $298.03 to $1,275.64. The savings in interest would be $63,669.38
Most mortgages have very flexible payment alternatives. Weekly, bi-weekly, or monthly payments are most common. These choices also have a great effect on the overall interest payments.
Consider the example of a $150,000 mortgage with an interest rate of 6.20% over a 5 year term.
Payment Remaining balance at end of term
Weekly $244.40 $129,285.80
Bi-weekly $488.81 $129,327.89
Monthly $977.61 $135,132.08
How does the 5% Down Payment Program Work?
Under the 5% Down Payment Program, the minimum down payment of 5% of the purchase price or appraised value, whichever is less.
The down payment must be from customer's own resources or an outright financial gift from immediate relatives.
If the minimum equity requirement is being met by way of a financial gift, the funds must be in the possession of the borrower at the time of application.
Borrowers are also required to demostrate at time of application the ability to cover a closing cost equal to at least 1.5% of the purchase price.
Maximum purchase price can range from $125,000 to $300,000. Your Mortgage Consultant will confirm the maximum in your market area.
Maximum GDRS= 32% (i.e. Principal + Interest + Property Taxes + Heating Costs must not exceed 32% of Gross Income).
Maximum TDRS= 40% (i.e. Principal + Interest + Property Taxes + Heating Costs + Monthly Obligations including Credit Cards & Loans must not exceed 40% of Gross Income).
Minimum loan term for CMHC is 6 months with loan qualification based on the current 5 year rate.
GENCOR (GE Capital) currently has no minimum term requirement. The mortgage loan insurance premium is 3.75% of the mortgage amount. (Premium can be added to the mortgage or paid separately). Credit history must be in good standing.
How does the Home Buyers' Plan (HBP) work?
Each purchaser may borrow up to $20,000 from their RRSP under the Home Buyers' Plan. (The funds must have been in the RRSP for at least 90 days prior to withdrawl to be eligible under the program)
Provied you buy or build a qualifying home and meet all of the conditions for making a withdrawl under the Home Buyers' Plan, you can use the particular funds you withdrew under the Home Buyers' Plan for other purposes. (Not only down payment and closing cost, but for any other purpose you choose.)
This program is available to the first time home buyer only. (You are considered a first time home buyer if, at any time during the period beginning January 1, 1995 and ending 31 days prior to your withdrawl in 1998, you did not own a home while you occupied it as your principal place of residence) This information is current throughout 1999. And the program has been extended indefinitely.
Repayment of the funds back to your RRSP can be made over 15 years. (The repayment period starts in 2001 and ends in 2015)
If the is not reapid in a year, that year's repayment amount will be added to your income and taxed. In order for the home to qualify it must be located in Canada and intended to be used as your principal residence.
This program may be used in connection with the 5% down program.
If you have any questions about the HBP program you can call the General Enquiries section of your local tax services office. You can find the address and telephone number listed under "Revenue Canada" in the Government of Canada section of your telephone book.
If you use a Telecommunication Device for the deaf (TDD), you can get tax information by calling the toll-free, bilingual TDD enquiry service at: 1-800-665-0354
What information is required to be Preapproved for a Mortgage?
If you are applying for a preapproved mortgage, have following information ready to give to your Mortgage Intelligence Consultant:
Have your employer give you a letter on company letterhead outlining your name, position, gross annual income, and number of years employed with the company.
If you are self-employed, you will need three years financial statements, and tax returns (together with official assessment from Revenue Canada).
Social Insurance Numbers.
At least 3 years history of residences and employers.
Know your banking information (i.e. institutions name, address, type of accounts, account numbers)
Know your assets and their value (i.e. cash amounts, stocks, bonds, RRSPs, car).
Know your liabilities (i.e. car loan, credit card balances).
Also, be sure and advise your Mortgage Intelligence Consultant about any past credit problems you may have had.
Finally, write down a list of questions you would like to have answered.
Why is verifying my Down Payment important?
If there is 'one' thing that causes problems which may delay the closing of your house it's verification of the Down Payment. Here's why:
To meet the Requirements of Canada Mortgage and Housing Corporation, GENCOR (GE Capital) and the Major Lending Institutions, on or before the issuance of a lending commitment you will be asked to provide "Confirmation of Down Payment" from Non-borrowed funds in one or more of the following forms.
Down Payment from the Sale of an Existing Property You will be required to provide a copy of the unconditional "Purchase and Sale Agreement" on your existing property. This needs to be accompanied by a copy of the statement of "Mortgage Balance" on any mortgages presently held against the property. The difference between the sale price and the mortgages owing will substaniate the funds available for your down payment.
Down Payment from a Gift All or part of the minimum equity requirement may be provided by way of a financial gift, as long as all of the following conditions are met:
(a) the donor is an Immediate relative of the borrower;
(b) the Approved Lender has verified that the money is a genuine gift; and
(c) the Approved Lender has verified that the funds are in the borrower's possession prior to the time of the application to CMHC or GENCOR for mortgage loan insurance.
The Approved Lender will verify the authenticity of the gift by obtaining a written confirmation, signed by the donor and the borrower, which will include the following points:
(a) the money is a genuine gift from the donor and does not ever have to be repaid;
(b) no part of the financial gift is being provided by any third party having any interest ( direct or indirect in the sale of the subject property)
The Approved Lender is not required to forward this confirmation to CMHC, but is expected to retain the Information in its paper or electronic loan record.
Down Payment from Your Own Resources You must supply verification satisfactory to C.M.H.C. or GENCOR and the lender of accumulated savings from non-borrowed funds. This may be in the form of a copy of your bank book confirming a balance equivalent to your down payment including the amount of deposit confirming the savings of said amount for a period of not less than 3 months. Should a substantial deposit have been made recently, the source of such funds, i.e. Bonds, Stocks, G.I.C.'s or RRSP receipts will also be required.
To avoid any delay in funding your transaction we suggest that you provide a form of the above noted confirmation at least 14 days prior to your closing date.
If there is 'one' thing that causes problems which may delay the closing of your house it's verification of the Down Payment. Here's why:
To meet the Requirements of Canada Mortgage and Housing Corporation, GENCOR (GE Capital) and the Major Lending Institutions, on or before the issuance of a lending commitment you will be asked to provide "Confirmation of Down Payment" from Non-borrowed funds in one or more of the following forms.
Down Payment from the Sale of an Existing Property You will be required to provide a copy of the unconditional "Purchase and Sale Agreement" on your existing property. This needs to be accompanied by a copy of the statement of "Mortgage Balance" on any mortgages presently held against the property. The difference between the sale price and the mortgages owing will substaniate the funds available for your down payment.
Down Payment from a Gift All or part of the minimum equity requirement may be provided by way of a financial gift, as long as all of the following conditions are met:
(a) the donor is an Immediate relative of the borrower;
(b) the Approved Lender has verified that the money is a genuine gift; and
(c) the Approved Lender has verified that the funds are in the borrower's possession prior to the time of the application to CMHC or GENCOR for mortgage loan insurance.
The Approved Lender will verify the authenticity of the gift by obtaining a written confirmation, signed by the donor and the borrower, which will include the following points:
(a) the money is a genuine gift from the donor and does not ever have to be repaid;
(b) no part of the financial gift is being provided by any third party having any interest ( direct or indirect in the sale of the subject property)
The Approved Lender is not required to forward this confirmation to CMHC, but is expected to retain the Information in its paper or electronic loan record.
What is the Purchase Plus Plan?
The Purchase Plus Plan lets you add the cost of upgrades to your mortgae before you move in! Eligible upgrades include - a new electrical service, a new roof, central air, a new furnace, new siding, eaves, soffits, facia, doors, windows, a new kitchen, carpeting...or any other renovation tha would increase the value of the home.
The way it works is like this... Let's assume that you are a first time buyer and have 5% down payment. Before the mortgage financing is arranged, written quotes are obtained from licensed contractors for the repairs and or the improvements to be done to the home. When the application for mortgage financing is made, the request is made for 95% of the purchase price PLUS 95% of the cost to complete the improvements.
Note: The lender will "hold-back" on closing the "improvement" portion of the mortgage until the work has been completed, normally within 30 to 60 days of closing. Once the work has been completed, the lender will advance the balance of the funds and the contractor can be paid.
What does this mean?...let me give you an example...
The purchase price is: $150,000 X 95% = $142,500
The quote for the improvements is: $11,000 X 95% = $10,450
Total Mortgage is: $161,000 X 95% = $152,950
Therefore, an application is made for a mortgage in the amount of $152,950 which is 95% of the purchase price plus 95% of the improvements. On closing this is what happens... The Mortgage advanced to complete the purchase is $142,500 plus the original 5% from the purchasers down paymentt ($7,500) sufficient funds to complete the purchase of $150,000. After closing the contractor completes the improvements (normally within 30 to 60 days after the closing) the lender advances the hold-back of $10,450, the purchaser pays the additional 5% of the cost of the improvements ($550) and the $11,000 owed to the contractor can be paid as per the original qoute for the work.
And you will get $11,000 of the improvements donw to your home woth a cash outlay of only $550 (the balance was financed with your mortgage)!
What costs will I have to pay on closing?
To avoid any surprises on closing, a good rule of thumb is to set aside an amount equal to 2-3% of the purchase price to cover expenses like these:
The Offer
The Deposit: Part of your own down payment, a deposit is due upon acceptance of your offer.
Prior to Closing
Home Inspection: Prepared by a qualified inspector to assess the property for defects and poor maintenance.
Appraisal: Prepared by an appraiser chosen by the lender, by CMHC or GENCOR if the mortgage is insured by either company.
Closing Costs
Legal Fee/Disbursements: Your lawyer will quote his fee for closing the purchase and mortgage(s) plus an approximation for his disbursements, which includes registration fees, courier costs, photocopies, etc. Ask for an estimate.
Land Transfer Tax: See the chart enclosed in this package to calculate the Land Transfer Tax which is due on closing and reflected in the "Statement of Adjustments" which your lawyer prepares prior to closing day.
Interest Adjustment: Monthly mortgage payments are due on the first of the month. Unless the closing date is the first of the month, you must prepay the amount of the interest accuring up to the 1st day of the following month, the Interest Adjustment Date.
CMHC or GE & PST: If your mortgage is insured by CMHC or GENCOR the insurance premium will usually be added to the mortgage so it is not a cash requirement on closing. However, the premium is subject to 8% PST, and the tax must be paid on closing.
Prepaid Expenses: If the Vendor has prepaid any other expenses such as utilities, water, and sewage taxes, oil in tanks or taxes, he must be compensated. This will be reflected in the Statement of Adjustments.
Property Tax Hold-back: If the lender is collecting and paying property taxes you may be required to pay to the lender an amount to ensure sufficient funds are available to pay the next installment of property taxes when due.
Other Fees: Occasionally, a lender or the broker will charge a fee for providing the mortgage. If so, these costs should be disclosed to you at the time the Statement of Mortgage is issued to you.
Clark Power :: RE/MAX Mid-Island Realty 4994 Argyle Street Port Alberni 250-723-5666
