Uandimortgage.com

Why use a mortgage broker?
What is the Homebuyers' Plan?
Do I qualify for the 5% down-payment program?
What should I expect for closing costs?
What type of income proof do I have to provide?

Why use a mortgage broker?

• Power of professional negotiating expertise.
• One stop convenience for access to numerous mortgage products.
• Unbiased knowledgeable advice.
• Access to unadvertised rates.
• Work for you, not the Bank.

• The Home Buyers Plan is a federal government program that allows homebuyers to use $25,000.00 for each purchaser from his/her own RRSP.
• You must not have owned a principal residence within the last 5 years.
• You must intend to occupy your home as a principal residence.
• Minimum repayment is 15 equal annual installments. This schedule can be accelerated.
• The funds, to be withdrawn, must have been invested into the RRSP for a minimum of 90 days prior to withdrawal.
• You must complete a Form T1036.

Do I qualify for the 5% downpayment program?

• The home must be located in Canada and is to be occupied as your principal residence.
• You have, from your own resources, a down payment of at least 5% of the purchase price of the home.
• Your mortgage payment must not exceed 32% of your gross household income. This includes payment of principal + interest + property taxes + heat + condo fees (if applicable).
• You must be able to cover closing costs equivalent to at least 1.5% of the purchase price.
• You meet the lender's eligibility requirements regarding income, employment and credit worthiness.

What should I expect for closing costs?

The following are approximate costs:

• Appraisal Fee: $300.00
• Home Inspection $250.00
• Legal Fees (approx): $1,200.00
• Title Insurance: $200.00
• Property Tax Adjustment (if applicable)
• Interest Adjustment (if applicable)
• Property Transfer Tax (not applicable in Alberta)

What type of income proof do I have to provide?

In most situations lenders require a comfort level that the borrower has sufficient income and cash flow to service the mortgage as well as any other obligations that they may have. The higher the Loan to Value (ie mortgage amount vs. purchase price) the more important this becomes as the lender is placing less reliance on the value and equity in the property and more on the earning power of the borrower. The following is a summary of what Lenders require depending on what type of job you have:

Salaried Employees

• Job Letter - Lenders use 100% of the income. Verification is made on company letterhead, signed by appropriate individual. If you are a recent hire, the letter should confirm that probation period has been passed. Bonuses, car allowances and other forms of remuneration should be mentioned if applicable.
• Pay Stubs - Many Lenders will also require your most recent pay stubs.

Hourly Employees

• Pay Stubs - showing year-to-date income verification.
• T4's and/or Personal Tax Returns (T1 Generals)- the last 2 years, to take an average.
• Notice of Assessment - (NOA) - most recent, to confirm no taxes owed.

Commission Income

• T4's and/or Personal Tax Returns - the last 2 years, to take an average.
• Job Letter - confirming position.
• Notice of Assessment (NOA) - optional depending on Lender.

Self-Employed

• Financial Statements of Company - 2 years average of net income used. Depending on Lenders policies, the add-back of various personal expenses, on the company's financial statements, may be allowed (eg's of allowable addbacks - Depreciation, Office-at-home expenses, vehicle expenses).
• NOA's - Last 2 years' Personal Notice of Assessments.
• Personal Tax Returns - last 2 years' T1 Generals showing personal net income.

Overtime - Will be used as long as there is a proven track record - 2 years evidence (T-4's).

Bonuses - Once again a 2 yr track record required.

Part-time Job - should be in place for 2 years before using the additional income.

Tips - allowed if declared on the personal tax return.

Car Allowances - This varies from lender to lender.

Alimony and Support - Evidence that payments have been made regularly and a copy of divorce agreement is required.

Investment Income - This is allowed if the income is ongoing.
Capital gains, which result from the liquidation of an asset is a 1 time occurrence and can't be used.