Down Payment

You can purchase a home in Canada for as little as 5% down. However this does depend on a
few different factors. These factors will include your current credit score, your debt to income
ratio, and overall purchase price. Not everyone will qualify with 5% down, it depends if you meet
the lender and insurance companies lending criteria. An additional factor when purchasing a
home with less than 20% down is mortgage insurance. Mortgage loan insurance protects the
lender in case you don’t make a payment, and is required if you have less than 20% of the
home’s purchase price down.

Purchase Price

Borrowers can put down 5% (if they meet lenders criteria) on the first $500,000.00 of the home’s
purchase price. If the home’s purchase price is between $500,000.00 and $999,999.99 you will
need to put 10% down for the portion of the purchase price that is higher than $500,000.00.
Lastly if a home’s purchase price exceeds $1,000,000.00 then the portion of the purchase price
that exceeds that limit will require 20% down.

Sources

Your down payment can come from a number of different sources. This includes but is not
limited to: personal savings, investments, RRSP (first time home buyers only), a gift from an
immediate family member. If your down payment source is a gift from a family member you must
prove the money is a gift, and not a loan, they will need to provide a gift letter that includes the
following information: The giftor’s personal information (name, address, phone number), The
giftor’s relationship to you, The dollar amount of the gift, The date they gave you the money (to
be verified in your bank statements), A declaration that the money is a gift and does not need to
be repaid. For other down payment sources the lender will also have criteria that must be met.
If you have any questions on down payments or need any mortgage information please contact
me at the number below.

Ashley Crowhurst
#MB600232
Mortgage Broker
P (604)-845-3340
E Ashley@sf-g.ca
Mortgage Architects – A Better Way

Interest Rate Increase

On Wednesday October 26th we are expecting another increase in the Bank of
Canada’s Prime Rate. Despite prime rate rising to 5.45% just over a month ago on
September 7th 2022, we could potentially see prime rate increase by half to
three-quarters of a percent. Along with this, most major banks are forecasting another
increase this year after the October 26th increase.

Trigger points

What is a trigger rate? A trigger rate is the rate when the regular mortgage payment
no longer covers the accrued interest. This affects those with variable rate
mortgages. This happens when interest rates have increased so much that the entire
payment is solely going towards interest and nothing is going towards the principal.

If rates were to increase more, the payments would no longer cover the full interest.

When/ if an individual hits their trigger rate the solutions would be to
increase the monthly payment, make a lump sum payment on the mortgage thus
decreasing principal, or switch to a fixed interest rate with a higher payment. Trigger
rates will vary for individuals, generally you reach your trigger point when interest rates
increase at least 2% from when you first obtained your mortgage from your lender.

Mortgage Professional: Ashley Crowhurst

With interest rates on the steady rise it is vital to get Pre-approved as soon as possible
and get rate hold if you are in the mortgage market. If you want more information on
interest rates or have any questions on mortgage financing or want to obtain mortgage
financing, please don’t hesitate to reach out. I would love to help

Ashley Crowhurst #MB600232 Mortgage Broker 6321 King George Blvd P (604)-845-3340 E W Mortgage Architects – A Better Way

Realtor: Matthias Alleckna

Don’t hesitate to message me, Matthias Alleckna on Facebook or Instagram . As your local real estate professional for White Rock, Surrey and the entire Fraser Valley I am happy to lend you my expertise. Check in every week on the website blog for more engaging content.

What is it?

What is a pre-approval? What is a pre-qualification? What are the differences between the two
and what are the benefits that come along with them? I am going to walk you through these
questions and help you get a better insight on this important topic.

Pre-Approval

A pre-approval is when you fill out a formal mortgage application provided by your broker/
lender. This is an in depth application including personal and financial information including but
not limited to: Your current/ previous employment status, List of all assets and liabilities, An
authorized pull of your credit bureau and its review, Down payment information, etc. Along with
this information will be supporting documentation you must provide, such as: Last 2 years T4,
Last 2 years NOA, Last two current pay stubs, Current job letter, ID, Last 3 month bank
statements. More and/or different information and documentation may be required depending on
your current financial situation, employment status, as well as lender specific requirements.
Once your application is ready we will send it off to the chosen lender that best suits your needs.
The lender will do an in depth review of your application and current financial situation. After a
lenders review, they will provide you with a specific amount based on the above information that
you are pre-approved for. With this the lender will lock you into an interest rate, with this you will
receive a conditional agreement that is typically good for 120 days. This will allow you time to
find a home and close. Benefits of getting pre-approved includes: Knowing your borrowing
capacity, Mortgage financial planning, Locked-in interest rate, More credibility as a buyer, And
peace of mind while in the home buying process.

Pre-Qualification

Getting pre-qualified however is much different. This process is much less in depth and more
general. Being pre-qualified will provide you with a general estimate of the loan amount you
could qualify for. For this you only need to provide basic information, such as: Where you plan
on buying, How many buyers there is, Are you planning on buying a house or a condo with
strata, Are you planning on renting out the home or a portion of it, Any outstanding balances on
credit cards or lines of credit, If you have a car loan and/ or lease, And their amounts and any
other loans, Current employment status, Estimate of your credit score, And gross household
income. With this basic information we can provide you with a general estimate of what you
could qualify for. A pre-qualification does not give you an exact amount you could qualify for, this
does not lock you into an interest rate either. This process can be done over the phone in just
minutes.

Summary

In summation, both getting pre-approved and/ or pre-qualified have their advantages. However
you have to find which option is best for you. If you are a serious buyer a pre-approval is always
best, as we will need the application and information regardless to be able to get you a
mortgage and into a home. If you are just wanting an idea but don’t yet want to commit to a
pre-approval, getting pre-qualified is a great first step. If you or anyone you know is looking for a
pre-approval or just wanting to get a general idea of what they could qualify for with a
pre-qualification, please feel free to reach out. I would love to help!

if you want more information about an Mortgages in the Fraser Valley, don’t hesitate to message me, Matthias Alleckna on Facebook or Instagram. As your local real estate professional for White Rock, Surrey and the entire Fraser Valley I am happy to lend you my expertise. Check in every week on the website blog for more engaging content.

Ashley Crowhurst
#MB600232
Mortgage Broker
6321 King George Blvd
P (604)-845-3340
E Ashley@sf-g.ca
Mortgage Architects – A Better Way