Getting a home loan, whether you are refinancing or purchasing a new home can be a stressful process. My job, as your mortgage broker, is to make the mortgage process as simple and easy as possible. In doing this, the first step is to educate you on the process and what you need to do to qualify for a mortgage. In doing this, you will come to the table better prepared which will make the home buying process or refinancing for you a much better experience.
The first step to getting a home loan is to have the down payment necessary. You will need to either have 20% equity in your home or have 20% down payment minimum when purchasing a home. This will allow you to enter into a conventional mortgage allowing you to not have to pay CMHC fees.
Whether you have 20% equity built into your home or actual 20% down payment, up to 65% of your mortgage can become a line of credit (HELOC) and the other 15% (or whatever percentage is left over) can be a fixed or variable rate mortgage.
To better understand, let me give you an example. Say that you are buying a house for $400,000 and you have 20% to put down. Your total mortgage would be $320,000. Of this amount, $260,000 could be a line of credit and the other $60,000 can be fixed or variable. If you prefer, you can have a larger amount of this be fixed/variable.
HELOC’s (Home Equity Line of Credit) are currently Prime (3%) + 0.5% = 3.5%. If prime goes up, then so does your rate. We also offer interest only payments that allow you to pay a very small amount of your can choose to pay everything off all at once with no penalty. There are also no penalties for paying it down as much as you choose.
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