Why do we ask this?

Our goal is to find you the exact financing option that you need. So this first question will set the path for your application. We offer pre-approval, approval and switching/refinancing. Homewise works with multiple lenders to find you the right mortgage to best suit your needs.

*Note, if you are buying a pre-construction condo, you should be choosing the approval option.

Why Mortgage Pre-approval?

If you are someone who has started to think about home ownership, pre-approval is the option to choose. A mortgage pre-approval is a commitment from an institutional lender that sets forth the parameters for which they'll lend you money, such as the rate. Mortgage pre-approval is also important to help you understand what you can afford based on your consumer profile.

Why Mortgage Approval?

Congratulations, you have found a home! Mortgage approval is the step to take when you need financing for a specific property at a specific date. Mortgage approval will find you a lender, and set out all the terms and conditions of the mortgage, including rate. Please note, you can only be approved for a mortgage if you have an accepted purchase and sale agreement.

Why Mortgage Switching/Refinancing?

You already have a mortgage but would like to inquire about moving your mortgage to another institution. You would like to switch mortgages to see if there is a better option for you, or you would like to refinance your mortgage to take-out existing equity. Be advised, if you are looking to refinance your mortgage, the maximum amount you can borrow is 80% of the value of your property.

Why do we ask this?

We ask these questions because we need to gather as much information as possible in order to provide you with the service and expertise you deserve.

Why is this important for pre-approval?

Pre-approvals come with a time limit. It will vary from institution to institution but generally the maximum amount of time we can hold a rate for you is between 90-120 days. It is important to get an idea of your plan so that we can choose the best possible pre-approval for your needs.

Why is this important for approval?

This question is paramount because lenders require this as part of the complete formal application process. We will not be able to submit the application without informing the lender of the date your purchase is closing.

Why is this important for refinancing/switching?

Although the date might change, we need to inform the lender when you would like to close the transaction. We will not be able to submit your application without a specified closing date.

Why do we ask this?

This is important information that should be understood well before the purchase transaction closes.

First Time Home Buyer Benefits

All home buyers are subject to paying land transfer taxes when purchasing their property. First time home buyers, can apply for a rebate from the government, as long as they qualify for it. The maximum provincial (Ontario) LTT rebate is $4,000. Other provinces and cities also have rebates. Your Homewise Advisor will be able to help you know your land transfer tax rebate for your city.

GTA First Time Home Buyer Benefits

In addition to the provincial land transfer rebate, first time home buyers in Toronto can also apply for a land transfer tax rebate from the municipality. The maximum Toronto LTT rebate is $3,725.

If you have any further question, don’t hesitate to use our phone, chat or email contact options to discuss further with one of our mortgage experts.

Why do we ask this?

We need to know the exact address for approval and refinance/switching and general location (city or town) for pre-approval as it is a key parameter in the application process and will allow us to find the most suitable lender for your specific area across Canada.

In addition, Homewise is currently only providing mortgages across Canada. So we want to ensure that we are not having anybody fill out their profile without knowing that they meet our location parameters.

What if you provide the wrong address?

This will be found out in later stages of the application process and your mortgage contract may end up being invalid and potentially will need to be cancelled.

Why do we ask this?

These questions are integral to understand the size of mortgage that you will need. Knowing the size of your down payment will also give us information on whether or not your mortgage will need to be insured with mortgage default insurance.

The 20% Down Payment and Mortgage Default Insurance

According to Canadian mortgage regulations, purchasers who have less than a 20% for their down payment are required to get mortgage default insurance, which is an added cost of borrowing. For example, on a $600,000 mortgage, if a borrower puts down 10%, mortgage default insurance will cost close to $20,000 paid over the 25 year term. If you have more than 20%, you are not required to purchase the insurance.

What is Mortgage Default Insurance?

Mortgage default insurance protects the lenders in the case that a borrower misses a monthly mortgage payment.

Mortgage Default / CMHC Insurance Requirements :

• Maximum amortization period is 25 years.
• The minimum down payment is 5% of the first $500,000, and 10% of the remaining amount from $500,001 up to $999,000.
• Only available for home purchases below $1,000,000. For any home $1,000,000 and above, a 20% down payment is required.

For Refinance/Switch, why do we ask for the remaining principal and previous rate?

To calculate your mortgage (amount you will need to borrow) when you refinance or switch, we will need to know the total dollars remaining from your previous mortgage. We ask for your previous rate to have an idea of what your payments may have been so far.

Why do we ask this?

Lenders require this information in order to provide specific mortgage rates and terms. We try and gather as much information as possible upfront, so that there are no surprises down the road.

What do each of these options mean?

What you plan on doing with your property will affect the terms and conditions of your mortgage. For example, if you plan on buying a property for investment purposes and will rent it out to future tenants, your mortgage rate will be slightly higher than if your property will be owner occupied. If you are buying a cottage, the lender will have specific questions about the location, accessibility and condition of the property.

If you have any further question, don’t hesitate to use our phone, chat or email contact options to discuss further with one of our mortgage experts.

Why do we ask this?

We need to get as much information from your upfront so that we do not need to go back and forth with missing details.

Does property type make a difference?

The type of property you are purchasing has implications for us and the lender. For example, if you are buying a condominium, many, but not all, lenders will not approve your mortgage if the condo is smaller than 500 square feet (important info for people buying in Toronto). If it is smaller, we will not send your application to those lenders we know will not approve the file. Further, condos and townhouses have monthly fees that we will include in our calculations to find you the best mortgage.

Why do we ask this?

A mortgage is a secure and private financial transaction. Institutional lenders need to know your personal information to ensure that they can validate your identification and provide for your individual needs.

Why do we need your Social Insurance Number (SIN)

You Social Insurance Number is the best way to verify your identity. We use this to pull your credit and confirm your name, address, employment and liabilities. However, whether or not to provide your SIN is completely optional and you are under no obligation to do it. We can still process your application in full without your social insurance number. It is however, recommended that you provide it.

Why do we need to know if you are a Canadian citizen?

Recently, a foreign homebuyers tax was implemented in many cities and provinces across Canada. It is important that we know if you are a Canadian resident or not to account for the potential taxes that could arise.

Why do we need to ask about marital status?

If you are separated or divorced, there is a possibility that you will need to be paying monthly alimony. We will need to be aware of this as part of our mortgage calculations under liabilities. Please be honest as this information will also be available through your financial documents.

Why do we ask this?

Understanding your current living questions is a standard question or a mortgage application. It is important for us to know so that we can understand your living situation.

Why is it important for you to be very accurate

A large part of the mortgage process is ensuring your security. Asking questions about your current living situation will be validated against your Equifax credit report to ensure that the information provided is correct.

Why do we ask this?

One of the most important considerations in a mortgage application is your employment status and salary. Institutions use this information to calculate two key ratios that will determine whether or not you will be approved for a mortgage and for how much money.

Why is it important for you to be very accurate

Please try and be as accurate as possible when answering these questions. We cannot provide you with any concrete mortgage information without knowing your salary and employment status. Be advised, once you are satisfied with the terms and conditions of the mortgage we can provide to you, we will ask you to send us employment and income verification in the form of job letters, pay stubs and tax returns. This will all be compared against your application to validate your identification and profile.

Why do we ask this?

Finding you a great mortgage that is tailored to your unique profile is our goal. Beyond just rate, we also want to know what mortgage features best meet your needs. In this step we ask you a series of questions using simple language to get beyond the basic numbers and figures questions asked by banks and classic brokers. This allows us to build your “persona profile” that will align you with the lender whose mortgage features (such as fixed vs. variable, pre-payments, etc) best meet your needs.

Why do we ask these questions with “Three Years” as the length?

Generally, the mortgages that we recommend to the average homebuyer have a 5 year term. So we ask about a three year period to ensure that the change will affect the mortgage for at least 2 years.

Why do we ask if your salary will increase?

Three great features to pay less interest on a mortgage are: accelerated payments, a yearly prepayment, an increase on your payments. If your salary is increasing, your liquidity will potentially increase as well. So you may be able to exercise these feature on your mortgage.

• Accelerated payments - normal bi-weekly payments are paid out twice a month (24 payments per year). Accelerated bi-weekly payments are paid every two weeks (26 payments per year), paying down the mortgage more quickly.
• Yearly prepayment - This can either be a lump sum payment paid yearly (generally 10-20% of the original principal) or a monthly payment increase on top of your normal payments.
• Payment increase - an increase in your mortgage payments. Often called a “Double up”, certain lenders will allow you to increase your payments.

All of these features will pay down your principal more quickly and therefore, shorten your amortization period, lowering the amount of interest you will pay.

Why do we ask if your family size will increase?

If your family size is expected to increase, it may mean that you will have more expenses in your life and therefore less liquidity. So we will look to include mortgage features that provide you a safety net. These could be a longer amortization period (30 years), a monthly payment schedule, as well as the ability to take a mortgage vacation, which allows borrowers to defer a payment.

Why do we ask if you would prefer lower monthly payments if it meant paying more overall?

If you, like many buyers are paying your maximum price for a home, monthly mortgage payments that are as low as possible will be ideal. So we will look to increase the amortization period of your mortgage so that monthly payments are lower (e.g. 30 years). However, in the long run, you will end up paying more interest overall.

Other people want to pay as little interest as possible and pay off their mortgage quickly. For these buyers we recommend a shorter amortization period, higher monthly payments and therefore lower overall interest payments.

Why do we ask if you would like the lowest rate possible?

To some, rate is everything. So if that is your number one prerogative, we will ensure that we look to provide the lowest rate. However, it is important to know that some lenders provide low rates, but those could come with restrictions (i.e. no portability) or a lack of features that could potentially save the borrower more money than a lower rate.

Why do we ask if you would like to use your mortgage to borrow more money from your lender?

Some lenders provide the ability to borrow more money on top of your mortgage. So if that is something that you would like to do on day 1 or in the future, we will ensure that we find you a mortgage with those features available.

Why do we ask if you are more high risk?

Generally, people associate a variable mortgage as higher risk. If you are someone who would like a Fixed mortgage, or would prefer to know exactly how much of your mortgage principal you are paying off - we recommend that you select the low risk option.

Why do we ask how long you plan to own your home?

Some people are in it for the long haul and have not even thought about the possibility of selling their home within 5 years. Others have their future home in site, or they are buying this home a home as an investment for a flip. Understanding how long you expect to be at your home will allow us to make a choice as to how long your term will be (1, 2, 3, 4 or 5 years)

Why do we ask this?

If you plan on purchasing the property with someone else, we need to include their information in the mortgage application. Whoever is listed on the purchase and sale agreement (or title) must also be accounted for in the mortgage application. If you are getting a gift from an immediate family member, they do not need to be on the application but we will need their name at some point in the process.

What is a Co-Applicant?

A co-applicant is someone (such as a husband or wife) that will be applying with the applicant (borrower) and will be registered on the title and/or the mortgage. We will need the co-applicant's income information, living situation and liabilities as their profile will be part of your application.

What is a Co-Signer or Guarantor?

Must be an immediate family member. A co-signer or guarantor is someone who not registered on the title or mortgage, but they are guaranteeing that payments will be made in the case that the mortgage defaults.

Why is it important for you to be very accurate?

Did you know that upwards of 20-40% of first time home buyers get a receive from a family member for their mortgage? A gift is a sum of money from a parent or close relative that will help you with your down payment.

Why do we ask this?

If you are including a co-applicant or co-signer (guarantor) in your application, consider it the same as if they are applying for the mortgage by themselves. We need to know their information (employment, salary and expenses) so that we can help the lender verify that they can qualify for the mortgage.

Why is it important for you to be very accurate

A large part of the mortgage process is ensuring your security. Asking questions about your co’s job situation will be validated against the Equifax credit report to ensure that the information provided is correct.

Why do we ask this?

Assets and liabilities are a key part of the application process. All lenders will need this information to have an idea of what your current financial situation to understand what type of mortgage you can afford. Not only is it a key component of the application process, we also ask these questions to get a sense of our client and build a relationship with you that will last throughout the life of your amortized product.

Why is it important for you to be very accurate

Lenders evaluate each application based on very specific guidelines. We need the full picture in order to provide the lender with the information they need to decide on whether they approve the mortgage.