Personal Choice Mortgage Services: FAQ
  1. I've never used a mortgage broker before. Is there a fee for your service?
  2. What is a conventional mortgage?
  3. What is a High-Ratio Mortgage?
  4. What is mortgage loan insurance?
  5. What is a fixed rate mortgage?
  6. What is a variable rate mortgage?
  7. What is a "Zero Down" Mortgage?
  8. What is Interest Only Mortgages?
  9. What is a pre-approved mortgage?
  10. What mortgage options are available for new immigrants?
  11. If I have had previous credit problems, can I get a mortgage?
  12. How can you pay off your mortgage sooner?
  13. Do I have the ability to make my mortgage interest tax deductible?
  14. Can I get a mortgage to purchase a home and make improvements?
  15. How will child support and alimony affect my mortgage qualification?
  16. How can you use your RRSP to help you buy your first home?
  1. I've never used a mortgage broker before. Is there a fee for your service?

    No! We get paid by the lender (financial institution) who agrees to finance your mortgage. This "finder's fee" is our compensation for bringing them worthy residential customers like you. These fees are similar from lender to lender, so there is no incentive for us to favor one over the other. In very rare cases, such as if the applicant has non-standard credit or we are arranging a second mortgage for which we are not properly compensated, a brokerage fee may be charged. Otherwise only in the case of commercial financing is a fee charged.

    Please note that as a licensed mortgage brokerage, the Financial Services Commission of Ontario (FSCO) and the Mortgage Brokers Act govern us. All of our agents are registered with FSCO, as well as the Canadian Association of Accredited Mortgage Professionals (CAAMP). Please see our links to both of these associations.

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  2. What is a conventional mortgage?

    A conventional mortgage is one in which the mortgaged amount does not exceed 75% of the market value of the property. This means that the borrower must have 25% or more available for the down payment or equity remaining in their home.

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  3. What is a high ratio mortgage?

    A high ratio mortgage is one in which the financing required is greater than 75% of the appraised value or purchase price of the home. More specifically, a high ratio mortgage would need to be arranged when a purchaser has less that 25% for the downpayment. In this case, it is mandatory that the mortgage has to be insured either by CMHC or Genworth, which protects the lender's investment should the borrower not be able to meet the repayment terms.

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  4. What is mortgage loan insurance?

    Mortgage loan insurance is for clients who have less than 25% down payment or less than 25% equity in their home. If this describes your situation, your mortgage is subject to an insurance premium. This premium insures the lender that should you default on your mortgage payments they will reimburse the lender for their investment. See our links to CMHC and Genworth for a breakdown of insurance premiums.

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  5. What is a fixed rate mortgage?

    In a fixed rate mortgage, the interest is determined and set for the term of the mortgage, which means that there is no change to your principal and interest payment for that particular term. Fixed rate mortgages are most desirable when current interest rates are low.

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  6. What is a variable rate mortgage?

    Also referred to as adjustable rate mortgage, a variable rate mortgage is the opposite of a fixed rate mortgage. The interest rate on this loan may fluctuate during the term of the mortgage reflecting changes in current market rates as dictated by the Prime rate, which is set by the Bank of Canada.

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  7. What is a "Zero Down" mortgage?
    Sometimes saving the necessary cash required for your down payment on a home is not as easy as it looks. However, there are no-down payment programs that can make homeownership happen. If you have excellent credit history and can provide acceptable proof of employment and income, there are products available for you. Give us a call... we'll find the product that best suits you!

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  8. What is an interest only mortgage?

    Just as the title describes, an interest only mortgage is a mortgage loan where you only pay the interest on the mortgage for a fixed term in monthly payments. At the end of the term (ie. 5 years), you have the option of paying the balance owed, refinancing or renewing the mortgage in order to start paying the principal balance. This product has very specific uses and is not for everyone. Typically, in the case where for a period of time cash flow is an issue, an interest only mortgage is a viable option, although many financial advisers would recommend it only for a short, specific period of time.

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  9. What is a pre-approval?

    Requesting a pre-approval allows you to shop for a property within your price range with the comfort of knowing that financing is available, subject to the lender reviewing the subject property. A pre-approval, based on your current financial review and credit check, determines the amount you can borrow, the size of your mortgage payments and your interest rate, which is then guaranteed for a maximum of 120 days.

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  10. What mortgage options are available for new immigrants?

    There are a number of guidelines that govern lenders' approvals. As a new immigrant without an established credit history or a beacon score, this can sometimes create challenges. There are an assortment of products available, however, that are dictated by down payment (LTV), debt ratios (GDS/TDS), previous credit, as well as the ability to provide proof of income whether you are a regular employee or self employed that will help a new immigrant get a mortgage. To better understand what you may qualify for, feel free to contact us and we will research your financing options for you.

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  11. If I have had previous credit problems, can I get a mortgage?

    Conventional lenders such as banks prefer to deal with borrowers who have very good credit history. However, there is a wide variety of products available to suite nearly every potential buyer. Our approach is to find the product that best suits your financial scenario. Lenders are realizing that this is a portion of the market that needs attention and a large number of them specifically cater to these needs. Call us to find the one that best suits you!

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  12. How can I pay down my mortgage sooner?

    There are a number of ways to achieve this. Opting for a bi-weekly payment schedule is one step in the right direction, but it is even more effective when coupled with taking advantage of your particular lender's prepayment policy. It is not really the frequency that makes a big difference, but how much you pay. Any extra payment towards your principal dramatically improves your amortization period, thus decreasing your principal balance quicker and saving you the interest you'd pay over a longer amortization.

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  13. Do I have the ability to make my mortgage interest tax deductible?

    Yes. In a nutshell, there is a very popular strategy otherwise known as the Smith Manoeuvre. It is a process where the non-tax deductible portion of your mortgage is converted into a tax-deductible loan. Using this process, you not only receive tax refunds, you also build a retirement nest egg and pay your mortgage off sooner. The strategic relationship between your Personal Choice mortgage consultant and our/your financial planner is essential.

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  14. Can I get a mortgage to purchase a home and make improvements?

    Yes. This option eliminates the need to finance the renovations or improvements separately. It can also be done in the case of high ratio financing, although some conditions apply. Please note that the funds for the renovations are not advanced up front. Rather, they are reimbursed to the clients after an inspection is complete to insure the value of the work completed is accurately reflected in the homes new overall value. Please feel free to call us for further clarification.

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  15. Will child support and alimony affect my ability to get a mortgage?

    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.

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  16. Can I use my RRSP's to help buy my first home?

    Yes, first time homebuyers may withdraw up to $20,000 from their RRSP tax-free. The amount withdraw must be repaid to the RRSP interest free over a 15 year period commencing the year following the withdrawal with a minimum annual repayment of 1/15 of the amount. If both spouses qualify and are taking joint ownership of the property, up to $40,000 can be withdrawn.

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654 Upper James St.
Hamilton, Ontario, L9C 2Z3
EMAIL: info@pcmortgages.com
PHONE: 905-318-1414
TOLL FREE: 1-877-318-4141
FAX: 905-318-8777