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With a 25 year amortization the monthly payments are $977.61

With a 20 year amortization the monthly payments are only increased by $107.57 to $1085.18. The savings in interest would be $32,843.40

With a 15 year amortization the monthly payments are increased by only $298.03 to $1,275.64. The savings in interest would be $63,669.38

* The example assumes the interest rate will remain constant through the whole amortization period.

Consider the example of a $150,000 mortgage with an interest rate of 6.20% over a 5 year term.

The down payment must be from customer’s own resources or an outright financial gift from immediate relatives. If the minimum equity requirement is being met by way of a financial gift, the funds must be in the possession of the borrower at the time of application.

Borrowers are also required to demonstrate at time of application the ability to cover a closing cost equal to at least 1.5% of the purchase price.

Maximum purchase price can range from $125,000 to $250,000. Your Mortgage Consultant will confirm the maximum in your market area.

Maximum GDSR ~ 32% (Principal + Interest + Property Taxes + Heating Costs must not exceed 32% of Gross Income).

Maximum TDSR ~ 40% (Principal + Interest + Property Taxes + Heating Costs + Monthly Obligations including Credit Cards & Loans must not exceed 40% of Gross Income).

Minimum loan term for CMHC is 6 months with loan qualification based on the current 5 year rate.

GENCOR (GE Capital) currently has no minimum term requirement.

The mortgage loan insurance premium is 3.75% of the mortgage amount. (Premium can be added to the mortgage or paid separately).

Credit history must be in good standing.

Provided you buy or build a qualifying home and meet all of the conditions for making a withdrawal under the Home Buyers’ Plan, you can use the particular funds you withdrew under the Home Buyers’ Plan for other purposes. (Not only down payment and closing cost, but for any other purpose you choose.)

This program is available to the first time home buyer only. (You are considered a first time home buyer if, at any time during the period beginning January 1, 1995 and ending 31 days prior to your withdrawal in 1998, you did not own a home while you occupied it as your principal place of residence)

This information is current throughout 1999. And the program has been extended indefinitely.

Repayment of the funds back to your RRSP can be made over 15 years. (The repayment period starts in 2001 and ends in 2015)

If the amount is not repaid in a year, that year’s repayment amount will be added to your income and taxed.

In order for the home to qualify it must be located in Canada and intended to be used as your principal residence.

This program may be used in connection with the 5% down program.

If you have any questions about the HBP program you can call the General Inquiries section of your local tax services office. You can find the address and telephone number listed under “Revenue Canada” in the Government of Canada section of your telephone book. If you use a Telecommunication Device for the deaf (TDD), you can get tax information by calling the toll-free, bilingual TDD inquiry service at: 1-800-665-0354

Have your employer give you a letter on company letterhead outlining your name, position, gross annual income, and number of years employed with the company.

If you are self-employed, you will need three years financial statements, and tax returns (together with official assessment from Revenue Canada).

Social Insurance Numbers.

At least 3 years history of residences and employers.

Know your banking information (i.e. institutions name, address, type of accounts, account numbers)

Know your assets and their value (i.e. cash amounts, stocks, bonds, RRSPs, car).

Know your liabilities (i.e. car loan, credit card balances).

Also, be sure and advise your Mortgage Intelligence Mortgage Consultant about any past credit problems you may have had.

Finally, write down a list of questions you would like to have answered.

To meet the Requirements of Canada Mortgage and Housing Corporation, GENCOR (GE Capital) and the Major Lending Institutions

On or before the issuance of a lending commitment you will be asked to provide "Confirmation of Down Payment" from Non-borrowed funds in one or more of the following forms.

Down Payment from the Sale of an Existing Property You will be required to provide a copy of the unconditional "Purchase and Sale Agreement" on your existing property. This needs to be accompanied by a copy of the statement of "Mortgage Balance" on any mortgages presently held against the property. The difference between the sale price and the mortgages owing will substantiate the funds available for your down payment.

Down Payment from a Gift All or part of the minimum equity requirement may be provided by way of a financial gift, as long as all of the following conditions are met:

Down Payment from Your Own Resources You must supply verification satisfactory to C.M.H.C. or GENCOR and the lender of accumulated savings from non-borrowed funds. This may be in the form of a copy of your bank book confirming a balance equivalent to your down payment including the amount of deposit confirming the savings of said amount for a period of not less than 3 months.

Should a substantial deposit have been made recently, the source of such funds, i.e. Bonds, Stocks, G.I.C.’s or RRSP receipts will also be required.

To avoid any delay in funding your transaction we suggest that you provide a form of the above noted confirmation at least 14 days prior to your closing date.

If you have any questions about the OHOSP program, please call the Ministry of Finance’s Information Centre toll free:

The refund applies to any newly-built home where the sale closes after May 7, 1996. The agreement of purchase and sale have to be completed on or before March 31, 1999, the purchaser must take occupancy on or before December 31, 1999 and the deed must be registered on or before December 31, 2000.

You cannot have previously owned a home, or an interest in a home, anywhere.

If you have a spouse, he or she cannot have owned a home, or an interest in a home, anywhere. You cannot have received an OHOSP-based refund of land transfer tax.

The way it works is like this... Let’s assume that you are a first time buyer and have 5% down payment. Before the mortgage financing is arranged, written quotes are obtained from licensed contractors for the repairs and or the improvements to be done to the home. When the application for mortgage financing is made, the request is made for 95% of the purchase price PLUS 95% of the cost to complete the improvements.

Note: The lender will “hold-back” on closing the “improvement” portion of the mortgage until the work has been completed, normally within 30 to 60 days of closing. Once the work has been completed, the lender will advance the balance of the funds and the contractor can be paid. What does this mean? . . let me give you an example. . .

On closing this is what happens... The Mortgage advanced to complete the purchase is $142,500 plus the original 5% from the purchasers down payment ($7,500) sufficient funds to complete the purchase of $150,000.

After closing the contractor completes the improvements (normally within 30 to 60 days after the closing) the lender advances the hold-back of $10,450, the purchaser pays the additional 5% of the cost of the improvements ($550) and the $11,000 owed to the contractor can be paid as per the original quote for the work.

And you will get $11,000 of improvements done to your home with a cash outlay of only $550 (the balance was financed with your mortgage)!