Conventional Mortgage (Uninsured):
The mortgage amount does not exceed 80% of the property's value. The purchaser
is supplying a minimum of 20% of the property's value for a down payment.
Hi-Ratio (Insured):
The mortgage amount exceeds 80% to 100% of the property's value. In these cases all lenders will
require the mortgage to be insured (for default purposes) C.M.H.C./G.E. Capital
CMHC Info/Programme
C.M.H.C. - Canada Mortgage & Housing Corporation:
A government run program insuring mortgages under the National Housing Act.
(Commonly known as N.H.A. Mortgages).
Mortgage Insurance:
If your down payment is less than 20% of the purchase price, an insurance premium on
the mortgage amount is required (this premium may be added to the mortgage amount).
C.M.H.C./G.E. Capital also charges a premium based on the following loan to values:
80.1-85% = 1.75% 85.1-90% = 2.0% 90.1-95% = 2.75% 95.1-100% = 3.5%
For Example:
$100,000
Purchase Price
$ 5,000
Down Payment
$ 95,000
Mortgage Required (95% of L/V)
X
$ 2,612.50
2.75% of Mortgage Amount
$ 97,612.50
Total Mortgage Amount
Sales Tax:
Effective July 1/93 an 8% sales tax is payable to the government through your lender at time of closing. ( I.E. $3087.50 X 8% = $247.00 )
G.D.S.R. (Gross Debt Service Ratio):
The total of your principle, interest, taxes, heat, 1/2 condo fees, and payments cannot
exceed 32% of your gross family income.
T.D.S.R. (Total Debt Service Ratio):
The total of your G.D.S. payments plus any personal loans and outstanding credits card payments cannot exceed 40% of your gross family income.
Term:
Length of time that your mortgage agreement covers & for which your interest rate is guaranteed.
Amortization:
Actual number of years it takes to pay off the entire mortgage.(Now up to 40 Years)
Other Costs to Purchase A Home
Down Payment:
Minimum of 0% of the purchase price.
Appraisal Fee:
Required by the lending institution to ensure the property is sufficient security for the mortgage
advance. Typical charge is $210-$225 (plus G.S.T.). Completed by independent, accredited
appraiser.
Inspection Fee:
Completed by Building Inspector. Suggested if the home you are purchasing is older, or if newly
constructed by a builder who is not under a warranty program. Typical charge @ $250-$275.
Legal Fees: Includes Lawyers' fee for service (ranges from approximately $399-$600) plus any disbursements & G.S.T. required to register your mortgage including Sheriffs Certificate, search on title etc. Typical cost around $450-$550.
Land Transfer Tax: A tax equal to 1% of the purchase price less
$275.00 levied on every purchase and collected upon closing by the Lawyer.
Survey Certificate: Required by the lending institution to ensure
the house is situated on the lot within legal restrictions. Typical cost @ $800. This may be
available from previous owner so please ask! If not available, Land Title Insurance through your lawyer
@ Approx $250.00.
Tax Adjustments: You will be responsible for paying the property
taxes for the portion of the year which you own the property.
Home Insurance: You are responsible for arranging insurance
on your new home in the event of fire or other damage.
Life Insurance: Available at your option through the mortgage
lender to cover the amount of the mortgage in the event of the death of you or your spouse.
Moving Costs: Dependent on how far, how much and who is helping you move.
