Whistler Real Estate Co Ltd, #137- 4370 Lorimer Road, Whistler, BC V0N 1B4

Mortgage Financing Options

Conventional Financing - this is what banks and lenders call your mortgage application if you are putting at least 20% down.

High Ratio Financing - this requires 'mortgage insurance' from CMHC or Genworth, and is required if you are putting less than 20% down. In this instance, 2 approvals are necessary, one from the bank and one from the mortgage insurance provider.

With high ratio mortgage financing, the level of down payment you have effects the cost or premium of the insurance. For example, with 5% down, the insurance premium is 2.75%, and with 10% down, the insurance premium is 2.00%. This insurance is a one-time fee for as long as you own the property, and it can be added to the mortgage; you do not have to pay this out-of-pocket. For an extended amortization, there is a premium surcharge of an extra 0.20% for a 30 year amortization. This means that with 5% down, and a 30 year amortization, the premium would be 2.95%, and with 10% down the premium would be 2.20%.

Click here for a table of CMHC insurance premiums.

The Paperwork

When applying for a mortgage, you will have to provide the following information:

• A completed application, which is basically a summary of your personal information regarding where you work, and information regarding your assets and liabilities. Click here to access the on-line application on our web site.
• Confirmation of your income and employment. This is usually provided by way of a combination of the following: employment letter from your employer confirming your position, income, and length of time employed, current payslip, past T-4's and/or your tax returns and/or Notice of Assessments from Revenue Canada. If your income fluctuates from year to year, a 2 to 3 year history is required.
• Verification of your down payment and closing costs. This is required so the bank can see where the source of the down payment is coming from. This is usually provided by way of RRSP or bank account statements, family gift letter, tax refund or vacation slip, bill of sale from a vehicle, or any other documentation that confirms where the funds have come from. It is standard for the banks to request a 90 day history of account statements.
• It is an excellent idea to go through this process in advance of looking for your new home, so you have a good idea of what you qualify for, and also so you can arrange a rate hold. This is referred to as a pre-approval, and there is no cost or obligation to arrange.

RRSP Withdrawal

Revenue Canada allows you to withdraw up to $25,000 from your RRSP if you are a first time home buyer. Funds withdrawn must be repaid over a 15 year period. You may pay back the RRSP funds earlier, however if you do not make an installment, the portion that was supposed to be repaid is included as income for that year.

Click here to access the Revenue Canada web site for further details.

BC Government Property Transfer Tax Waiver

When buying a home in BC, there is usually a BC Government property transfer tax. As a first time home buyer however, this tax can be waived if certain conditions are met:

• You are a Canadian citizen, or a permanent resident as determined by Immigration Canada.
• You have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property.
• You have never owned an interest in a principal residence anywhere in the world at anytime.
• You have never received a first time home buyers' exemption or refund.
• The fair market value of the property is not more than the qualifying value of $425,000 (only if purchasing an existing home).
• The land is 0.5 hectares (1.24 acres) or smaller.
• The property will only be used as your principal residence.

 Feel free to contact any one of our mortgage broker professionals for additional information on qualifying for your first home purchase.

www.garibaldimortgage.com