Buy your first home with confidence

Your affordability for a mortgage depends on your personal financial situation, including your income, debts, and living expenses. It’s important to determine your own budget and comfort level before deciding how much mortgage you can afford. To get an idea of how much mortgage you might be approved for, lenders will typically consider factors such as your income, credit score, and debt-to-income ratio. This is also known as your purchasing power. The more purchasing power you have, the higher the mortgage or loan size you can be approved for. However, it’s important to remember that you’ll also need to have a proper down payment to match. You can find out more about down payment requirements in this helpful resource. Working with a mortgage broker can also help you navigate the process and find a mortgage that fits your budget and needs.

Mortgages work in Canada by providing a way for individuals to borrow money from a bank or lending company to purchase a home. When you apply for a mortgage, the lender will consider factors such as your income, credit score, and down payment to determine how much they’re willing to lend you. Once you’ve secured the mortgage, you’ll make regular payments to the lender, which will include both the principal amount borrowed and the interest charged on the loan. Over time, as you make your mortgage payments, you’ll build equity in your home. However, it’s important to note that if you stop making payments, the lender has the right to seize your property and sell it to recoup their investment. This is known as foreclosure. Working with a mortgage broker can help you navigate the process and find a mortgage that fits your needs and financial situation.

Reverse mortgages in Canada allow homeowners aged 55 and older to access the equity in their homes without needing to sell the property. With a reverse mortgage, you can receive a lump sum or regular payments, which are based on your age, home value, and other factors. Unlike a traditional mortgage, you do not need to make any payments during the life of the loan. Instead, the loan is repaid when you sell the property or move out. However, it’s important to note that the longer the loan term, the more interest you will need to pay. The maximum amount you can borrow is also determined by your age and the lender. Working with a mortgage broker can help you understand the options available and find a reverse mortgage that works for your unique financial situation.

Variable rate mortgages in Canada are based on a set formula tied to the prime rate. For example, your variable rate might be Prime minus 1.0. As the prime rate changes, so will your mortgage rate. However, unlike adjustable rate mortgages, your payment will remain the same, but the amount of each payment going towards the principal versus the interest will change. If interest rates go down, more of your payment will go towards the principal, and if they go up, more will go towards the interest. It’s important to understand the potential risks and benefits of a variable rate mortgage before choosing this option. While you may benefit from lower interest rates, there is also the possibility that rates could increase, leading to higher payments. Working with a mortgage broker can help you understand the options available and find a mortgage that fits your needs and financial situation.

Subprime mortgages are loans that are typically offered to clients with lower credit scores, who may have difficulty proving their income or who have unique property details. These mortgages are usually issued by a variety of lenders, including banks, trust companies, and Mortgage Investment Corporations (MICs). Subprime mortgages often come with higher interest rates and fees than traditional mortgages, as they are considered riskier loans for the lender. The exact terms of a subprime mortgage will depend on your specific situation and financial profile. It’s important to carefully consider the risks and benefits of a subprime mortgage before deciding if it’s the right option for you. Working with a mortgage broker can help you explore your options and find a mortgage that works for your unique needs and financial situation.