FAQ – Refinance GTA

Yes. Your ideal mortgage formula has probably already been created, but if you want to consider a change let’s review the possible benefits and implications.

There is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.*

If your transaction is due to close in the middle of the month, but your regular mortgage payments are set for the start of the month, your first mortgage payment could be delayed for several weeks. To cover this, a date is set as the IAD and an amount is collected on closing to cover this Interest Adjustment Date period.

The down Payment usually represents between 5-20% of the total price of the property.

What is the difference between High Ratio Mortgage Insurance and Mortgage Life Insurance?

High Ratio Mortgage Insurance protects the lender against payment default by the home buyer. It is required by most lenders if the home buyer has less than 20% down payment. An insurance premium will apply. Mortgage Life Insurance protects your dependents and loved ones in the event of your death.

When the mortgage lender pays the Property Taxes, how are payments calculated?

The estimated amount of your Property Taxes can be added to the mortgage payment and paid on your behalf at the appropriate times. Depending on the balance in your tax account, it may be necessary to increase or decrease the amount of monthly payments to reflect the timing of Property Tax Payments.*

* Tax information consists of general comments only, for full details see the applicable legislation or review with your advisor.

Various Mortgage products may be available with rate caps from 4 months up to 12 months.

A rate cap locks in the maximum interest rate a client will receive for their mortgage. The rate cap is based on the rates at the time of application for the selected product, less any discretionary pricing if given.

Some self-build/progress mortgages can fund construction of your new home while you remain in your current house. This will have to be approved by the lender. This approach, if approved by the lender, can be a more economical strategy of structuring your finances rather than selling your current home and moving to rental accommodations.

Provided you qualify, the lender will require confirmation of the sale of your current home (a written unconditional sale agreement) upon reaching a predetermined point of completion of the new home.

For peace of mind and in order to ensure you have more cash to work with, many applicants opt to sell prior to starting construction on the new home and reside in short-term rental accommodations or with other family members.

No, the rate cap is set for the period chosen. If the rate cap expires, current rates will take effect.

As the mortgage was approved as an insured mortgage you will still have to pay the original mortgage premium to the insurer, as this is part of the original terms and conditions of the mortgage, regardless of whether this mortgage is cancelled or amended to conventional.

Yes, when a land draw is approved on a conventional mortgage the 1st draw is split into two portions (remember lands draws can be approved on conventional mortgages only).

Land draws are subject to approval for conventional mortgages when the land is being purchased, has been purchased and is free and clear, or if there is an outstanding loan secured by the land.

If the property is 95-99% complete, will the lender treat as 100% complete?

What is the minimum percentage lenders will fund final advance on?

Lenders will only fund if the house is 100% complete (less 3% allowance for seasonal holdbacks). This means that the house can be complete to 97% and the only thing that is not complete is something like siding or pouring the driveway. If this is the case, the lender will only fund 97% to the solicitor holding back the 3% until a final inspection advises the house is 100% complete.