Question 1

How much can I afford to pay for a home?

Accepted Answer

A good rule of thumb is to keep your total housing costs (mortgage payment, property taxes, and heat) at or below 39 percent of your gross income, and your total debt payments below 44 percent. Those are the standard GDS and TDS ratios lenders use — the Affordability calculator works out your exact number.

Question 2

What is the minimum down payment needed?

Accepted Answer

It depends on the purchase price: 5 percent on the first $500,000, 10 percent on the portion between $500,000 and $1,500,000, and 20 percent on homes above $1,500,000. Default insurance is not available at all above $1,500,000.

Question 3

What is mortgage loan insurance?

Accepted Answer

Mortgage default insurance (often called CMHC insurance) protects the lender if you default, and is required when your down payment is under 20 percent. The premium runs from 2.80 percent to 4.00 percent of the mortgage depending on your loan-to-value, and can be added to the mortgage balance. Providers are CMHC, Sagen, and Canada Guaranty.

Question 4

What is a pre-approved mortgage?

Accepted Answer

A conditional commitment from a lender to lend a specific amount at a set rate, based on a review of your income, credit, and finances. Pre-approvals typically hold your rate for 60 to 120 days and show sellers you are a serious, qualified buyer.

Question 5

Can I qualify to buy a home?

Accepted Answer

Most people with stable income, manageable debt, and reasonable credit can qualify for some type of mortgage. Even if a bank says no, there are alternative and private options. Send me your situation and I'll tell you the real path.

Question 6

When can I renew my mortgage?

Accepted Answer

Most lenders let you renew up to 120 days before your term ends without penalty — that is the moment to shop the market. Start reviewing options four to six months out so you have time to compare and negotiate.

Question 7

How can I pay off my mortgage faster?

Accepted Answer

Switch to accelerated bi-weekly payments, increase your regular payment, make lump-sum payments, or choose a shorter amortization. Even small extra payments save thousands in interest — the mortgage calculator on this site models all of them.

Question 8

Can gift funds be used for a down payment?

Accepted Answer

Yes. Gift funds from immediate family are accepted by most lenders. You will need a signed gift letter confirming the money is a true gift and not a loan, and some lenders also want proof the giftor had the funds.

Answers to what I get asked most.