THE ULTIMATE GUIDE FOR FIRST TIME HOME BUYERS TO HELP GET YOUR HOME FOR LOWEST PRICE POSSIBLE!
It is easier for you to buy a new home if you have the information needed to guide you through the process. Download this E-Book now and get the information you need to make this process as easy as possible!
OUR FIRST TIME HOME BUYER MORTGAGE SOLUTION
Citadel Mortgages will give you the facts that your bank won’t tell you about financing your new home. With access to multiple lenders, we will help you find the best rates and best mortgage solutions so you can buy your dream home.
See the Difference for Yourself, Get Approved Today!
OUR TRUSTED LENDER PARTNERS
Whether you are a first time home buyer or buying your next home, selecting the right financing for your home is of MAJOR IMPORTANCE. In today’s market, there are many different lenders and products for you to choose from, and on top of that, the lending rules and regulations are constantly changing. Therefore, the task of finding the most suitable rate and terms for your new mortgage can become a challenging task.
With the recent mortgage rule changes, now more then ever it is essential to work with a trusted mortgage agent or mortgage broker to ensure your approval for the best mortgage rate and mortgages terms, regardless of your credit, income or being self-employed or new to Canada.
Citadel Mortgages has the best mortgage solutions to match your needs. See the Difference for Yourself, Get Approved Today!
If you haven’t already done so, you should get pre-approved before you start your home hunting. The reason is simple; you will know how much you are approved for so that you save time searching for homes that are within your reach. Additionally, having a pre-approval gives you power in negotiation as both the seller and real estate agents know that you are a serious buyer who can close.
Our Pre-approval for your mortgage is valid for up to 120 days, with some of our pre-approvals valid up to 365 days if you are buying a new condo or home build from a developer. Ask us here at Citadel Mortgages how we can ensure your next mortgage is a smooth transaction!
Even if you have 15 to 20% of the property value for a down payment, it may not be enough to qualify for a loan, under the new rules, from a traditional lender such as a bank. As of January 1, 2018, new regulations were put in place, which makes it harder for first-time home-buyers and even experienced home-buyers to secure the loan they need.
- You do not meet the regular bank-lending criteria and need to work with an alternate lender
- You are now required to qualify at an above-contract level
- You have 20% down payment or want to refinance your home
What are the New Rules and What’s the Impact?
The rate will be the greater of the five-year benchmark rate published by the Bank of Canada OR the lender contractual mortgage rate +2.0%. For example:
- 20% down payment
- 5-year fixed mortgage rates of 3.24%
- 25-year amortization
A family with an annual income of $100,000 can afford a home worth $579,438.09
- Applying the new “stress-test,” the family must qualify for the mortgage using the greater of 5.14 % and/or 5.24% (calculated as 2% + 3.24%).
- Therefore, with 20% down payment, a 5-year fixed rate of 5.24%, and a 25-year amortization, the family can now afford a home worth $494,045.76
The difference is that under the new rules, the family’s affordability has dropped by $85,392.33. As you can see, the new rules impact the mortgage you qualify for, with a proper mortgage agent form Citadel Mortgages we can help you understand how the rules impact and get you approved today!
See the Difference for Yourself, Get Approved Today!
New Mortgage Rules FAQ
The most significant impact will be on the amount for which the home buyer will be able to qualify. Previously, the home buyer qualified at the contract rate offered by the lender. While the actual mortgage payment will still be paid at the contract rate, a higher calculation will be used for qualification purposes.
Yes, homeowners will still have the ability to refinance up to 80% of the value of their property. You will have to pass the same stress test, which is the higher of the Bank of Canada five-year benchmark rate OR the contract rate from the lender plus 2%.
Mortgage lenders (excluding credit unions and private lenders) are prohibited from arranging with another lender: a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law. This is often referred to as “bundling” or “bundle partnership.”
What does this mean?
For example, a client applies for a mortgage with an 80% LTV, and the lender can only approve 65%. The lender then partners with a second lender for the additional 15%. The original lender then “bundles” the 15% LTV mortgage with the original 65% mortgage to form the complete 80% LTV loan. This is no longer permitted as per OSFI.
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