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Lampe pour faire la lumière sur toutes vos questions hypothécaires - FAQ | Multi-Prêts Hypothèques

Why have a mortgage?

If you value stability and the feeling of pride that comes with owning your home, buying is certainly an option. You could be “master in your own home” rather than living at the mercy of a landlord.

From a financial point of view, a house, a condo or a multiplex represents a low-risk asset that gives you the benefit of enjoying it every day while its value will most likely rise over time. Owning such an asset can also become an effective tool to leverage other projects.

Mortgage versus home equity line of credit: what’s the difference?

A mortgage is a loan secured by real estate. The mortgage can be a closed or open loan and/or a home equity line of credit.

The home equity line of credit provides funds secured by your property, for a total of up to a maximum of 65% of its market value. As in the case of a closed or open mortgage, you must go through a notary to take out a home equity line of credit.

How long can amortization be?

Amortization is the number of years it will take you to pay off your entire mortgage. To choose the period of amortization, it is important to consider your ability to pay, your medium and long-term goals and the down payment your able to make. The period can vary between 10 and 30 years.

If you opt for a shorter amortization period for your mortgage, you will save a lot of money because you will pay less interest on the loan and you will free yourself from your mortgage sooner. However, your mortgage payments will be higher.

To reduce the amortization period, you can also increase the frequency of your payments from monthly to every two weeks or accelerated-week, increase your mortgage payments, make additional capital payments, or make double payments. You can use the Multi-Prêts mortgage payment calculator to simulate different scenarios.

How can I lower my amortization period and my interest fees?

If you choose a shorter amortization period, you will pay off your mortgage faster and save a lot of money.

To reduce your amortization period even more, you can increase the payment frequency to bi-weekly or even weekly accelerated, increase the amount of your mortgage payments, make additional payments on capital or double your payments. Use Multi-Prêts’ mortgage calculator to simulate various scenarios and compare the savings and gains based on various reimbursements set-up.

How does mortgage renewal work?

It is tempting to accept a renewal offer from your bank – often for lack of time – but in  most cases their product is no longer the best one suited to your current needs. Your mortgage broker will be able to examine your present situation with you and offer a better solution in the circumstances. Taking a few minutes to call your Multi-Prêts broker could save you thousands of dollars over a period of 5 years. A mortgage broker has access to products that are often not available at your bank.

Renewing your mortgage is also a good opportunity to take advantage of a favorable rate to finance projects such as renovating your home, planning a trip or just consolidating your debts.

What is a cash back?

Cash back mortgage, or discount is a product whereas the lender gives back a certain amount of money that could be useful for renovation projects, closing fees, buying furniture or appliances or pay off existing debts. If you opt for this product, you could even make an anticipated payment on the capital of your mortgage, potentially saving thousands of dollars in interests.

Are there grants and programs for first time home buyers?

Funding programs do exist for first time buyers, such as the federal and provincial (Quebec) tax credit for the purchase of a first home. Combined, these credits could save you $ 1376 on income tax.

Interesting, isn’t it?

Finally, don’t neglect contacting the municipality where you intend to settle! Many offer a variety of advantageous programs.

How can I save on my mortgage?

  • Increase your payment frequencies. Ask us how much you could save in interest by making accelerated weekly or bi-weekly payments.
  • Take advantage of lump-sum payments
  • Increase your payments
  • Take advantage of the double up option

Each year, at the anniversary date of your loan, you can usually repay up to 20% (could be higher with some financial institutions) of the original borrowed amount without having to pay any commissions or penalties.

Once a year, you can also increase by as much as 20% your regular payment amount without commissions or penalties.

You can also reduce both interest fees and repay your mortgage faster in doubling your usual payments, including principal and interest (taxes & insurance if applicable), at each normal payment date, without commission or penalty. You can choose to double all of your payments or just do it once a year. The whole amount of your additional payment is being applied towards reducing the principal of your loan (capital).

What is a mortgage used for?

A mortgage is a loan granted by a financial institution that is secured by real estate. The amount of the mortgage is calculated on the value of the property purchased minus the down payment.

Several criteria then determine your mortgage, such as the amortization, the frequency of payments and the terms, which notably include the rate.

The amortization of the mortgage can last up to 30 years – or 25 years in the case of insured loans. However, if you have the means, you can save on interest by choosing a shorter amortization to repay your mortgage.

Your payments can be made monthly, bimonthly, every 2 weeks or weekly. You also have the option of making accelerated payments to repay your debt faster and save money.

The terms are the contractual conditions related to your mortgage. It is important to negotiate the most advantageous terms based on your situation. In addition to the mortgage rate, the terms (conditions) include the term (duration), the possibility of additional payments, closing costs, portability, penalties and other conditions. Before making such a significant decision, it is important to be well informed and to be well advised. If this seems complex, your Multi-Prêts mortgage broker will gladly assist you throughout this process.

Which mortgage term is best?

A mortgage is much more than a rate. When you take out your mortgage, you will have to choose the terms of your loan. The choices you make will depend on your needs and on your situation at the time you take out the loan.

Among other things, you will first have to choose the term. The term is the duration of the loan after which you need to renew the clauses of your agreement. The advantage of a short term is that the rate is usually lower. Your decision will be based primarily on your tolerance for risk. If your tolerance is high and a low rate is your priority, then a shorter term will be the most suitable choice for you.

Several other elements will have to be taken into consideration, such as advance repayment, penalty calculation, etc. That’s why relying on a good ally such as a mortgage broker is a wise choice that could make you save a lot.

Which is better, a variable or fixed rate mortgage?

Can I get a mortgage with a low credit score or after a bankruptcy?

What should I do if my mortgage or loan application falls through?

A mortgage broker is an important ally that will help you see more clearly through the multitude of products to choose from. He or she can help you realize your dream despite the difficulties!

Why should I subscribe to a mortgage insurance?

Buying a home will be one of the biggest investments you will ever make. Your mortgage comes with a huge responsibility, and it could compromise your family’s safety.

What would happen if you were to die suddenly? Or if you were to become ill and could not work while your mortgage payments are still running? Because the Multi-Prets brokers want to offer you the best possible products and service, they offer you, along with your mortage, the possibility to subscribe to an insurance policy from Mortgage Protection Plan, which constitutes a good solution to protect yourself and your family.

The mortgage credit insurance will compliment your existing portfolio of insurances to help you enjoy a worry free mortgage. The main advantage of this insurance is that you can transfer your mortgage to another financial institution without having to change insurer.

How much are CMHC fees?

The Canada Mortgage and Housing Corporation (CMHC) is a Crown corporation created in 1945 and fully owned by the federal government. Its role is to help stabilize the housing market. How? By providing greater access to homeownership to Canadians by insuring mortgages for which the down payment may be insufficient for lenders.

The government requires lenders to insure all mortgages with a down payment of less than 20%. With its mortgage loan insurance, the CMHC has been protecting banks for many years against payment default by adding its insurance premium to the loan. The calculation of the premium depends on the down payment of the buyer. There are two other players in the business of loan insurance: Genworth and Canada Guaranty.

How much can I afford for my house?

When you meet with a Multi-Prêts brokers, you will determine together your borrowing capacity. In other words, they will establish the amount you can borrow for the purchase of a property based on your financial situation. However, you should also be aware of your personal limit for making payments because your maximum borrowing capacity may not be a “comfortable” zone of payment with respect to your quality of life. Considering your personal limit based on your budget will spare you from finding yourself in an embarrassing financial situation.

Examine your personal finances, compare your income with your usual expenses and make sure you can repay your debt without making much of an effort. It is also important to know that you can get an interest rate guarantee for 150 to 180 days depending on the lender. This guarantee protects you from any rate increase.

  • For a simulation of your borrowing capacity, please use the How much mortgage can I afford? calculator.

What conditions should be met to start the mortgage process?

In most cases, you must have:

Can I get a mortgage without a down payment?

In Canada, the minimum investment required by financial institutions for properties worth less than $ 500,000 is 5% of the purchase price. For a $ 300,000 property,  the minimum down payment required would therefore be $ 15,000.

You must also prove that you have funds equivalent to 1.5% of the purchase price to cover the closing costs, such as legal fees, notary fees and disbursements, appraisal fees and the costs of a certificate of location.

At first glance, this amount may seem difficult to come up with. However, there are ways to accumulate this sum without drawing on all your savings. First, there are traditional sources of funding such as the Home Buyers Program (HBP), which allows you to use a portion of your RRSP to purchase your first property. Alternately, if you already own a property, you can use the net worth of that property as collateral for the purchase of a second one.

Other – less conventional – options exist. For example, you can get a donation or a loan from close family  members to use as a down payment. You can also take out a loan or personal line of credit to make your down payment. In this case, however, the lender will have to consider repayment installments in calculating your debt ratios.

These options require good financial discipline and a good credit record. Contact your mortgage broker; together, you will examine which options are most beneficial for you!

Also all mortgages with a downpayment of less than 20% will need to be complemented by a mortgage loan insurance through CMH, Genworth or Canada Guaranty.The higher your down payment, the lower the overall cost of borrowing.

Where can I find the funds for my down payment?

  • A donation from a relative
  • Your RRSP (with the Home Buyer’s Plan (HBP) you can withdraw up to $25,000 per person tax-free and without penalties).
  • Your savings

When the source is a gift from your relatives, you have provide a letter signed by the donor confirming that it is a gift, not a loan.

What are the rules for using my RRSP for a down payment?

The government’s the Home Buyers’ Plan, or HBP program, allows each person to withdraw up to $ 25,000 from an RRSP without penalty to pay the down payment or for any other expenses related to the purchase of a house. In the case of a couple that jointly buys a property, this withdrawal can therefore be doubled to a maximum of $ 50,000. However, there are subtleties to this program. For example, you must intend to live in the house you wish to buy using the HBP. If it is not your first home, you must respect the conditions related to the four-year period to withdraw from your RRSP.

The beneficiary of the HBP has 15 years to pay back without interest the amount withdrawn from his or her RRSP. The repayment period begins in the second year following the year in which you made your withdrawal.

What other expenses should I anticipate before buying a property?

Before deciding whether to buy a property or not, evaluate all one time expenses as well as recurring charges related to the purchase and maintenance of a house. To establish your budget, consider the following expense items:

Costs associated with the purchase of a house:

Can I get preapproved for a mortgage?

Our lenders offer preauthorizations that protect your rate against increases for periods ranging from 60 to 180 days. Moreover, in the case of a new construction, many of them grant an appropriate delay considering the scheduled construction work. There is a definite advantage to obtaining your pre-authorization: you will know your borrowing capacity and will be able to look for a home stress-free. In addition, you will have an excellent interest rate during the time you are looking for or building a new home, as well as being protected from any rate hikes.

Multi-Prêts Mortgages offers you an exclusive online tool allowing you to obtain your mortgage prequalification in less than 5 minutes. You will quickly get the best deal among our 20 mortgage lenders, for free. One of our mortgage brokers will follow up on your request and will accompany you throughout your transaction by ensuring that you have the product best suited to your needs.

How to find out my mortgage payments?

Where can you get a mortgage loan?

You’ve done it! You found the home of your dreams! The house with a spacious kitchen, an exposed brick wall in the living room and the huge tub that you were hoping for… It’s perfect. All that’s left to do is secure financing.

Maybe you saved up for this purchase or a wonderful great-aunt gifted you a sum of money. However, you will have to make up the difference and get a mortgage loan to cover the total value. How and where do you go about this?

A mortgage loan is a sum of money that is loaned by a financial institution and then reimbursed in instalments over several years. The payment instalments cover both the interest on the loan and the capital, which is the amount that was loaned.

You can obtain a mortgage loan from a bank and also by contacting a mortgage broker. When you work with a mortgage broker, they will ensure that you are getting the best possible conditions for your mortgage. There’s a very simple reason for this. A broker has access to a wide range of lending institutions so they can shop around and pinpoint the best product for you. If you get a mortgage loan directly from a financial institution, you will only have access to that financial institution’s products, which might not suit your needs. Furthermore, since mortgage lending rules have become stricter in recent years and they can vary from one lender to the other, a broker will be your ally and direct you to the lenders who are most likely to approve your loan.

A mortgage broker also has access to what we call “virtual lenders” that many people are not aware of. These lenders, including First National and MCAP, can be accessed by mortgage brokers and they offer excellent conditions that might be exactly what you need.

What is mortgage refinancing?

Do you dream of a new bathroom? A spacious kitchen where you can indulge your latest passion and craft delicious Indian meals? Would you like to renovate your basement and set up a home theatre? Did your cousin convince you to buy a chalet so you can turn every weekend into a family celebration? If you have owned your home for a few years and you qualify, you may be able to make your dreams come true, thanks to mortgage refinancing.

What are the advantages of mortgage refinancing?

Over the years, the net value of your property has increased. Mortgage refinancing involves re-borrowing the capital you have paid on your mortgage loan so that you can complete other projects. Did you know that you can borrow up to 80% of the market value of your home?

There are many advantages of mortgage refinancing. The refinancing interest rate is lower than that of personal loans and credit cards. If you refinance, you can finally renovate your bathroom for less and increase the value of your home. It’s the perfect solution!

Refinancing your mortgage could also serve as financial leverage that allows you to invest more in your RRSP, plan for retirement or even buy a little slice of paradise where you can while away the days reading and fishing.

No matter which project you’d like to tackle, mortgage refinancing may be a less expensive financial strategy than other types of lending. Our brokers can advise you and help you choose the mortgage solution that best suits your needs, the net value of your primary residence and your ability to pay.

Why choose refinancing?

Do you have projects in mind, but not enough liquid assets? Would you like to renovate your home? Or consolidate your debts? Before taking the plunge, here’s what you should know about refinancing.

Mortgage refinancing allows you to access the net value of your property and borrow up to 80% of its market value minus the balance of your existing mortgage. This is a way to create liquidity or save on interest by refinancing your mortgage at a lower rate than other loans. However, if you plan on refinancing, you must be prepared to wait until the end of your term so you won’t be liable for high penalty fees, which can eat into any potential savings.

You may also decide to refinance in order to consolidate your debts. This can lead to lower monthly payments. A mortgage broker can advise you and provide information that is relevant to your situation.

A home equity line of credit is another refinancing solution. A line of credit can give you access to up to 65% of the net value of your property. It works in the same way as a personal credit line. You can withdraw the money that you need and refund the amount when it suits you. The only obligation is monthly interest payments. Since a line of credit does not create constraints when it comes to what you can purchase or a timeline, it can be tempting to spend more than you can afford so you must be careful!

Can I finance home renovations with a mortgage?

With mortgage refinancing, it is possible to borrow up to 80% of the net worth of your property, including the outstanding balance of your current loan. We advise that you carefully assess your renovation needs to  both protect your investment and increase its value.

Compared to mortgage refinancing, the home equity line of credit offers more flexibility and could be a beneficial choice. You can make capital repayments at your own pace and its rate is lower than for a regular margin of credit.

However, it presents a similar danger with respect to self-discipline as a personal line of credit. Since you can withdraw funds at your own discretion, it is important to keep a check on your expenses and not let it become a source of deb overload. Make sure you are well informed about these two options.

Can I use a mortgage to consolidate debts?

Yes! It is possible, and you could even save a sizeable amount if you consolidate all your high interest rate loans and all your credit card balances with your mortgage. The interest rate on your mortgage is usually much lower than the cumulative rates of your various loans. In addition, you’ll have less to worry about knowing that you have only one payment to make. It is possible to borrow up to 80% of the net worth of your property.

You could save a considerable amount of money by consolidating all you high interest loans and credit cards with your mortgage. Your mortgage interest rate is usually lower than the sum of your other loans. You will have peace of mind knowing you will only have one payment to make.

Debt consolidation is worth considering if you are having trouble making ends meet, if your income has decreased or if you simply find that your interest rates are too high. Debt consolidation is a measure that allows you to regain control of your debts, which will be spread over a greater number of years at a lower interest rate. Please do not hesitate to contact a Multi-Prêts broker who will advise you on the best option available. 

Questions about us and mortgage brokerage

What services can I get with Multi-Prêts?

You can use our services for several types of mortgage loan projects:

What can a Multi-Prêts mortgage broker do for me?

The mortgage broker is the intermediary between a person wishing to subscribe to a mortgage loan and the financial institution that will lend the desired amount.

Their role is primarily to advise, negotiate and obtain the most advantageous loan for the buyer from the financial institution. Dealing with a mortgage broker offers several benefits.

Multi-Prêts brokers negotiate for you with more than 20 recognized financial institutions to get the best rates on the best terms, according to your needs.

As Multi-Prêts Mortgages brokers generate a large volume of transactions with various lenders, they give them rate reductions which you benefit from directly. In addition, the financial institutions pay us, the service is offered to consumers free of charge for any residential mortgage. Finally, the Multi-Prêts brokers ensure the process of your transaction runs smoothly, from presenting your application to the lender until you sign the deed of sale before a notary.

Multi-Prêts’ mortgage consultants negotiate on your behalf with over 20 established financial institutions to get you the best rates at the best possible conditions to fit your particular needs.

Since Multi-Prêts generates a high volume of transactions with different lenders, we consequently obtain rate rebates from which you benefit directly. Also, since financial institutions pay us for our services, the service is free for residential mortgages. The Multi-Prêts mortgage brokers will ensure smooth completion of your mortgage transaction, from the initial file presentation to the lender, to the final act of sale at the notary’s office.

What are the fees charged by a mortgage broker?

The services of a mortgage broker are totally free on residential mortgages. It is the financial institution that pays a finder’s fee for every mortgage loan request transmitted to the institution and that is ultimately closed at the notary’s office. The financial institutions actually bear the cost of these fees. As such, there are no hidden fees to the consumer.

Why can a mortgage broker get a better interest rate than I can at my own bank?

Who do the Multi-Prêts mortgage brokers work for?

How to choose a mortgage broker

A mortgage broker is a professional who specializes in researching and negotiating mortgage financing. To practise their profession, mortgage brokers must be members of the OACIQ, the body that regulates the mortgage broking trade. However, broker fees are paid by the lending institution and not by the client.

A broker’s expertise, knowledge of the market and access to several financial institutions means that they are best placed to pinpoint the mortgage that suits your financial situation.

In order to advise you, brokers have cutting-edge tools that give them access to the terms and conditions of each lending institution and current mortgage rates. Brokers are also always abreast of trends in the mortgage market.

If you’d like to work with a broker, your first step should be online research. You’ll probably find brokers with different profiles and skillsets. Don’t be afraid to look for someone who inspires you and speaks your language. For example, a broker may mention they’re involved in their community or they offer training sessions to first-time buyers. If you’d like to learn more about the industry, a broker who delivers training sessions might be the best choice for you. Take the time to choose a broker that suits your needs and email or call them. Feel free to ask about their experience, transactions they have concluded and the financial institutions they deal with. This will allow you to decide whether they are the best person to represent you. You must feel at ease, reassured and safe in the knowledge that they are listening to you because you will trust them to negotiate one of the biggest investments you will make, your mortgage.

Your broker will become an ally who will guide you through the mortgage process. They will explain the elements you must take into consideration, including your mortgage rate, its term and conditions. Your broker will prepare your file and present it to lenders who might suit your needs. Naturally, the broker will negotiate the best rate on the market. They will also ensure you have the best mortgage conditions. For example, a mortgage rate may be excellent, but there could be restrictions on certain products that will not work for you. This is just one example of the work that a broker will do on your behalf. Working with a broker will save you time and money and they’ll ensure that your mortgage aligns with your needs.

A broker can also advise you on project financing. A mortgage finances a property purchase, but it can also serve as financial leverage for projects such as renovations or the purchase of a pool or chalet.

In short, a broker works in your best interest. A broker will ensure that you are favourably represented to financial institutions so you can obtain financing for your property and the best possible conditions.

Questions about privacy

What is the Multi-Prêts privacy policy?

The privacy of our clients is our priority. We only collect the information that will be useful to our lenders to appropriately assess your financial situation. Only the lenders we deal with have access to your personal information. The information you entrust to us is deemed confidential and will not be disclosed without your prior consent.

How does Multi-Prêts protect my personal information when I submit an online request?

All online requests entrusted to us with personal data are protected by a security system. It means that all communication between you and Multi-Prêts is strictly private and secure. It is, however, your own responsibility to ensure that your local system is adequately protected using appropriate anti-virus, anti-spam and anti-spying software.

If I have further questions that are not dealt with in the FAQs pages, who should I contact?