Frequently Asked Questions

  • It determines the maximum mortgage loan for which you qualify.
  • It allows your realtor to show you a range of properties in your price range.
  • It allows your realtor to make a realistic offer on your purchase, and saves time in the negotiation process.
  • It holds the interest rate for a period of up to 120 days, guarding you against rate fluctuations.
  • It provides peace of mind during the home buying process.
A federal government plan allows first-time home buyers to use their RRSP´s to help finance their home purchase. This money can be used as a down payment, or to help with other closing costs. The RRSP home ownership withdrawal forms are available from your RRSP holder. The criteria are as follows:

  • Each applicant can withdraw up to $25,000 tax free.
  • Applicants cannot have owned a principle residence within the past 5 years.
  • You must reside in the home for at least one year.
  • The RRSP funds must have been invested for more than 90 days before withdrawal to qualify.
  • The withdrawn amount must be repaid, over an interest-free repayment period that can be as long as 15 years.
An open mortgage gives you the most flexibility in making extra payments towards your mortgage principle and even lets you pay off your mortgage entirely whenever you wish to. If you have uncertainty in your life such as serious illness, a looming separation, a possible job transfer to another city, or plan on selling or paying off your mortgage, it may be better to have an open mortgage. This way if you have to move, you can pay off your mortgage without penalty. This could save you in prepayment penalties. Note: Open mortgages usually have higher rates than closed mortgages.

Warning: Not all open mortgages are created equal. Check to see just how “open” your mortgage is!

Compared to open, a closed mortgage offers limited privileges in paying off your mortgage early. You cannot pay off your mortgage in full without attracting penalties. Often though, you do have the ability to prepay up to 10-20% of the original mortgage balance, each year as well as increase your payments. Most mortgages are closed but are portable and assumable.

Warning: Not all closed mortgages are created equal. Check with Invis-Feisal & Associates as to how your prepayment penalties are calculated.

It simply means that for the term of your mortgage the interest rate charged is a fixed amount and does not change during the term of your mortgage.
Compared to a fixed rate mortgage, a variable interest rate “floats”. Although the mortgage payment amount may stay the same the actual interest charged may change on a monthly basis. A drop in interest rates is great news for you and it will mean that more of your mortgage payment will go towards reducing your mortgage principle. If interest rates rise then less money will be used for reducing your principle and will instead be used for paying higher interest costs. If you think interest rates will stay low or even fall, then a variable rate mortgage makes a lot of sense.

With mortgages you pay a price for certainty. You generally pay more for a fixed rate mortgage because the lender is taking the risk as to what the rates will do by fixing the rate for you. You generally pay less for a variable rate mortgage because it is you that is taking the risk of uncertainty as to how interest rates will move ­ up or down.

With low interest rates, variable interest rate mortgages have become popular. Often it is possible to get a rate under the bank prime rate!

Paying weekly or bi-weekly gets more money onto your mortgage over the year. This will add up to paying your mortgage down faster over the long term.

Eg. If your mortgage payment was $1000 a month, and you paid it bi-weekly at $500 every two weeks, at the end of the year you would have paid $13,000 towards your mortgage as opposed to $12,000 by paying monthly. That extra amount will reduce the total overall interest costs and therefore the number of years it takes to pay off your mortgage. Going weekly at $250 per week will also put $13,000 towards your mortgage just as bi-weekly did and give you the same result.

If setting your payments bi-weekly or weekly does not work for you then just pay monthly and put an extra monthly payment on once a year (double up one payment) and you will get almost the same benefit.

Eg. Assume a mortgage amount of $420,000 with 5.35% APR with 5 year term over 30 year amortization. The monthly payment is $2,330.02 and the interest cost for the mortgage lifetime would be $418,805.31.

Step 1: Change to a bi­weekly payment of $1,165.01 ­ save $81,605.69

Step 2: Now add an extra $100 to your payment and see your savings grow!

Monthly payments would be $2430.02 with a savings of $76,890.66

Change to bi-weekly payments of $1,265.01 ­ save $111,840.96!

Your amortization is the total length of time it will take you to pay off your mortgage. Often when you first get a mortgage it is amortized over 25 years. If you make your mortgage payments over 25 years your mortgage will be paid off. However, your amortization period will not stay constant because different borrowing terms at each renewal vary the amount of interest charged over your amortization period. The length of time to pay off your mortgage will be determined by the interest charge, the loan amount and the amount of payment you make. You should first qualify for a 25-year amortization and then change the amortization down to 15 years by making a larger monthly payment. A 15-year amortization is a great goal for everyone. A good rule of thumb is to pay down your mortgage by at least 1% each year from the original amount. Make your monthly payment and add in this “top up” amount. It is the amount of “extra” payments that you make that reduces your principal, which saves you, interest charges. Another rule of thumb, when interest rates are low, is to make your mortgage payments as large as possible in your monthly budge. If interest rates rise by next renewal keep your mortgage payments the same and ride out the high rates by taking shorter renewal terms. This way you will get in the habit of making the same larger mortgage payment over time and by doing so will save thousands in interest charges.
Whenever you need a mortgage loan that is greater than 80% of the current market appraised value of your home, it is considered a high ratio or insured mortgage. In certain situations, and depending on the property and your credit, you can borrow up to 95% of the value of your home. The Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada and Canada Guarantee insure the lender in case you default on your loan. For this service you must pay for this one time insurance premium, included on top of your loan amount.
Usually the shorter the term, the lower the rate. However many people prefer the comfort of a longer-term mortgage for its stability. We often recommend a longer term for First Time Buyers. Variable rate mortgages are also a very attractive product that may be right for you. Talk to us to determine whether fixed or variable is best suited for you.
Yes, most institutions will allow the option of paying your own taxes, or having them included with your mortgage payments. However, some lenders may insist that they be included with the mortgage due to the loan to value ratio. If your lender will not collect taxes on your behalf, you could set up withdrawals with your municipal tax office.
All lenders will charge a penalty if you pay your mortgage out prior to the end of the term. Usually the penalty is the greater of three months interest, or the interest rate differential, however, this does vary slightly from lender to lender, so be sure to ask us for more information.
Under the RRSP Homebuyers Plan (HBP) you would not be considered a first time buyer and therefore unable to use your RRSP’s as you have resided in a home with your spouse. However,if you have not held title to your principal residence you would be qualified as a 1st time home buyer in order to qualify for the Property Purchase Tax Exemption Information on these two programs are below:

1. RRSP Homeowner´s Plan ­ allows you to withdraw up to $25,000 from your RRSP tax free (you have 15 years to pay this money back into an RRSP).

2. Property Purchase Tax Exemption ­ if you have not owned any real estate as your principal residence anywhere in the world you would be exempt. (Province of British Columbia).

It largely depends on the RRSP issuer. If you have money in cash accounts, typically you can get access to these monies right away but if your money is in mutual funds it can take up to 3 weeks for the request to be processed. I recommend that you contact your issuer to get the accurate amount of time so that you are prepared.
To determine “affordability” your consultant will first need to know your Taxable Income along with the amount of any debt outstanding and the monthly payments. Then, they will need to calculate 42% of your Taxable Income and deduct all of your monthly debt payments, including car loans, credit cards, line of credit payments. This calculation will be used to help determine how much of your income may be used towards housing related payments, including your mortgage payment. These calculations are based on Lenders´ usual guidelines. If you have no other debts, lenders may allow you to use 42% of your income towards your housing costs.

In addition to considering what the ratios say you can afford, make sure you calculate how much you think you can afford. If the payment amount you are comfortable with is less than 42% of your income, you may want to settle for the lower amount rather than stretch yourself financially. Make sure you don´t leave yourself house poor. Structure your payments so that you can still afford simple luxuries.

A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The results of the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection.

A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.

A down payment of 5% of the purchase price can be used to purchase a home. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable).

Lenders will generally accept a gift from a family member as an acceptable down payment provided a letter stating it is a true gift, not a loan, is signed by the donor. Most lenders will also require proof of receipt of the gift funds prior to completion, as well as confirmation that the donor has the funds available to gift.

Mortgages with less than 20% down must have Mortgage Loan Insurance provided by either CMHC, Genworth or Canada Guarantee.

We are able to negotiate on your behalf, structuring your mortgage to meet the criteria of the lenders, and therefore getting a mortgage solution that works best for you.

Financial Institutions can only offer their own products to the public through their sales force. As a result, they are not able to provide unbiased advice or selection since by doing so they risk losing your mortgage to a company whose product may provide more value to you. At Invis-Feisal & Associates, we offer a wide variety of mortgage products and services as we deal with many lenders, not just one. Because of this we are able to search for product from a variety of lenders, including banks, trust companies, insurance companies, credit unions and private lenders, for the one that offers the best product, rate and terms for your particular needs. Thus, we can be totally objective and unbiased in our recommendations to you.

Institutional lenders in order to gain market share from Mortgage Brokerage companies and individual brokers, pay a finder´s fee for referred business. Due to the volume of business generated by Invis and the excellent reputation of its Mortgage Consultants, fees are paid by the lender and we at Invis-Feisal & Associates receive fast approvals in order to gain their business. This allows us to shop among the various financial institutions and private lenders for the mortgage rate and product that best suits the needs of the client and, in almost all cases, at no cost to you the client.

When you deal directly with a Financial Institution and your mortgage is declined, for whatever reason, you must begin the application process all over again with another lender. When you deal with us, the application can quickly be redirected to another lender, or several other lenders, for consideration.

In situations where traditional lenders will not approve a mortgage because of poor credit, and where the application must be placed with a private or non-traditional lender, a brokerage fee may be charged to the client. This cost must always be disclosed to the client up front and must be authorized in writing by the client before it can be charged.

Your private, personal and financial information is not sent anywhere without your express permission. Our Apply Online form is sent directly to our mortgage application software. And all information you provide on-line is encrypted for the greatest possible security.
Depending on the circumstances surrounding your bankruptcy, generally some lenders would consider providing mortgage financing. If you are a previously discharged bankrupt the best way to determine whether or not you qualify at this time is to discuss your situation with us. We have many lenders to approach based on your circumstances.
Where Child Support and Alimony are paid by you to another person, generally the amount paid out is deducted from your total income before determining the size of mortgage you will qualify for.

Where Child Support and Alimony are received by you from another person, generally the amount paid may be added to your total income before determining the size of mortgage you will qualify for, provided proof of regular receipt is available for a period of time determined by the lender.

Subject to qualification, yes. In fact, even purchasers with 5% down may qualify to buy a home and make improvements to it. For high-ratio financing, Canada Mortgage and Housing Corporation (CMHC), Genworth and Canada Guarantee will insure mortgages to cover the purchase price of a home as well as an amount to pay for immediate major renovations or improvements that the purchaser may wish to make to the property. This is called “Purchase Plus Improvements”. This option eliminates the need to finance the renovations or improvements separately. Some conditions apply so ask us for your eligibility.
No, begin shopping around for an interest rate at least 90 ­- 120 days before your mortgage matures. Lenders will often guarantee an interest rate to you as much as 90 -­ 120 days before your mortgage matures. And, as long as you are not increasing your mortgage, they will cover the costs of transferring your mortgage too. This means a rate promised well in advance of your maturity date, thus eliminating any worries of higher rates. And if rates drop before the actual maturity rate, the new lender will adjust your interest rate lower as well.

Most lenders send out their mortgage renewal notices offering existing clients their posted interest rates. The rate you are being offered is usually not the best one. Always ask us to investigate the possibility of a lower interest rate with the lender or another lender. If you don´t, you may end up paying a much higher interest rate on your renewing mortgage than you need.

Contact us 120 days prior to your maturity and we can help obtain the best option for you upon renewal.