Lisette Amalfi

The minimum down payment required depends on the purchase price of the home:

• For homes priced at $500,000 or less: A minimum down payment of 5% of the purchase price is required.
• For homes priced between $500,000 and $1.5 million: 5% is required for the first $500,000 and 10% for the portion above $500,000
• For homes priced at $1.5 million or more: A minimum down payment of 20% of the purchase price is required.

Keep in mind that additional criteria may apply, such as your financial situation and mortgage insurance requirements. If you have questions about your down payment, I’d be happy to help you understand your options!

A home inspection is a professional evaluation of a property’s condition, including its structure, systems, and overall safety. During the inspection, a certified home inspector assesses key areas such as the roof, foundation, plumbing, electrical systems, and more, providing a detailed report on any potential issues or repairs needed.

Getting a home inspection is highly recommended. It helps you make an informed decision by identifying hidden problems that could lead to costly repairs in the future. A home inspection gives you peace of mind and ensures you’re making a sound investment in your new home.

When purchasing a home, it’s important to budget for more than just the purchase price. Here are some common costs to consider:

1. Down Payment: The initial amount you pay toward the home, ranging from 5% to 20% or more.
2. Closing Costs: Typically 1.5% to 4% of the purchase price, covering legal fees, land transfer taxes, and other administrative expenses.
3. Home Inspection: The cost for a professional to evaluate the property, usually $300–$500.
4. Appraisal Fee: If required by your lender, an appraisal may cost $300–$500.
5. Mortgage Default Insurance: If your down payment is less than 20%, this insurance is added to your mortgage.
6. Moving Costs: Includes hiring movers, transportation, and other relocation expenses.
7. Property Taxes and Utilities: These may be prorated and included in your closing statement.
8. Home Insurance: Required before closing, protecting your property from potential risks.

Planning ahead for these costs will help ensure a smooth and stress-free home-buying experience. If you have questions or need guidance, I’m here to help!

When choosing a mortgage, it’s important to understand the difference between fixed and variable rates:

1. Fixed Rate Mortgage:
   • Interest Rate: Remains the same for the entire term of the mortgage.
   • Advantages: Predictable payments, stability, and protection from interest rate increases.
   • Best For: Buyers who value consistency and want to avoid the risk of rising rates.
2. Variable Rate Mortgage:
   • Interest Rate: Fluctuates with changes in the prime rate, meaning your payments can go up or down.
   • Advantages: Typically starts with a lower interest rate and offers potential savings if rates decrease.
   • Best For: Buyers comfortable with some level of risk and flexibility in their budget.

Choosing between a fixed and variable mortgage depends on your financial goals, risk tolerance, and market conditions. If you’re unsure which option is best for you, I’d be happy to provide personalized guidance!

When discussing mortgages, two key concepts often come up: mortgage term and amortization period. Here’s what they mean:

1. Mortgage Term:
   • This is the length of time you’re committed to a specific lender, interest rate, and mortgage agreement.
   • Terms typically range from 1 to 5 years, but can be longer or shorter.
   • At the end of the term, you’ll need to renew your mortgage or pay off the remaining balance.
   • Think of it as a “short-term contract” within your overall mortgage.
2. Amortization Period:
   • This is the total length of time it will take to fully pay off your mortgage.
   • Most amortization periods are 25 years, but they can be shorter or longer, depending on your down payment and financial goals.
   • A longer amortization means lower monthly payments but more interest paid over time, while a shorter amortization means higher payments but less interest paid overall.

Understanding the difference between your mortgage term and amortization period is key to managing your payments and long-term financial planning. If you’d like help choosing the right term and amortization for your needs, I’m here to assist!

The minimum credit score required for a mortgage in Ontario depends on the type of lender and mortgage product. Here’s an overview:

1. Traditional Lenders (Banks and Credit Unions):
   • A credit score of 680 or higher is typically needed to qualify for the best rates and terms.
   • If your score falls between 600 and 679, you may still qualify, but you could face higher interest rates or stricter conditions.
2. Online Lenders:
   • Many online lenders cater to a variety of credit scores, with some requiring scores of 620 or higher, while others are more flexible.
   • Online platforms often provide competitive rates and faster approvals, especially for those with solid credit histories.
3. Alternative Lenders (B Lenders):
   • These lenders are more flexible with credit requirements, often approving applicants with scores as low as 550.
   • They may require a larger down payment or charge slightly higher interest rates to offset the risk.
4. Private Lenders:
   • Private lenders are less focused on credit scores and more concerned with the property and available equity.
   • They are an option for individuals with very low scores or unique financial situations, but their rates are typically higher.

Pro Tip: A higher credit score not only increases your chances of approval but can also qualify you for lower interest rates, saving you thousands of dollars over the life of your mortgage. If you’re looking to improve your score or explore your options, I’d be happy to assist!

Mortgage default insurance, often called CMHC insurance, protects lenders in case a borrower is unable to make their mortgage payments. It is mandatory for homebuyers in Canada who make a down payment of less than 20% of the home’s purchase price.

Key Details:

1. When is it Required?
   • If your down payment is between 5% and 19.99%, you must purchase mortgage default insurance.
   • Homes priced at $1,000,000 to $1,500,000 or more are not eligible for insured mortgages and require a minimum 20% down payment.
2. Cost of Mortgage Default Insurance:
   • The premium ranges from 2.8% to 4.0% of the total mortgage amount, depending on the size of your down payment.
   • This cost is typically added to your mortgage and paid off as part of your monthly payments.
3. Benefits:
   • Allows buyers to purchase a home with as little as a 5% down payment.
   • Gives lenders confidence to offer competitive interest rates, even with a smaller down payment.

If you’re unsure whether mortgage default insurance applies to your situation or want to explore your options, I’m here to help! Let’s work together to find the best solution for your needs.

Yes, you can pay off your mortgage early, but it depends on the terms of your mortgage agreement. Most lenders allow early payments, but there may be limits and potential prepayment penalties to consider.

Prepayment Options:

1. Open Mortgages:
   • You can pay off the mortgage in full or make additional payments at any time without penalties.
   • These mortgages typically have higher interest rates but offer flexibility.
2. Closed Mortgages:
   • Early payments or paying off the mortgage entirely may result in a prepayment penalty.
   • However, many lenders allow prepayment privileges, such as making extra payments up to 10-20% of the original mortgage balance annually or increasing your regular payment amount.

Prepayment Penalties:

If you exceed your prepayment privileges or break your mortgage term early, you may incur a penalty. The penalty is typically calculated in one of two ways:

1. Three Months’ Interest:
   • This is often used for variable-rate mortgages.
2. Interest Rate Differential (IRD):
   • For fixed-rate mortgages, this is the difference between your contract rate and the current rate, multiplied by the remaining balance and term.

Why Consider Prepaying?

Making extra payments reduces your mortgage principal, helping you pay off your mortgage faster and save money on interest over time.

If you’re thinking about paying off your mortgage early or want to understand your prepayment options, I’d be happy to help you review your agreement and create a strategy that works for you!

Missing a mortgage payment can have significant consequences, but the impact depends on how quickly the issue is resolved. Here’s what you need to know:

Immediate Impact:

1. Late Fees: Most lenders charge a penalty for missed or late payments. This fee is typically added to your next payment.
2. Credit Score: A missed payment could negatively impact your credit score, especially if it’s not resolved within 30 days.

If the Issue Persists:

1. Lender Contact: Your lender will likely reach out to discuss the missed payment and offer potential solutions, such as payment deferral or restructuring options.
2. Arrears: If multiple payments are missed, the account may go into arrears, and your lender could begin legal proceedings.

Long-Term Consequences:

1. Power of Sale/Foreclosure: If the missed payments continue without resolution, the lender may take steps to recover the debt through a power of sale or foreclosure.
2. Future Borrowing: A history of missed payments can make it more difficult to secure loans or mortgages in the future.

What to Do if You Miss a Payment:

1. Contact Your Lender Immediately: Explain your situation—they may offer solutions like a repayment plan or temporary deferral.
2. Review Your Budget: Ensure you’re set up to avoid future missed payments.
3. Seek Professional Advice: If you’re struggling to manage payments, I can help you explore refinancing or debt consolidation options to ease your financial burden.

The key is to act quickly to minimize the impact and maintain a positive relationship with your lender. Let me know if you’d like guidance tailored to your situation!

Yes, you can get a mortgage if you’re self-employed, but the process may be slightly different compared to salaried individuals. Lenders will typically require additional documentation to verify your income, such as:

• Two years of personal tax returns (T1 Generals)
• Notice of Assessments (NOA)
• Financial statements from your business (if applicable)

Lenders want to ensure your income is stable, so you may need to demonstrate consistent earnings over the past couple of years. Depending on your credit score and debt-to-income ratio, you could still qualify for competitive rates. I can guide you through the documentation process and help you secure the right mortgage for your situation.

A second mortgage is a loan taken out against the equity of your home, in addition to your primary mortgage. It’s typically used for larger expenses like home renovations, consolidating debt, or funding investments.

• Interest Rates: Second mortgages often have higher interest rates than first mortgages, as they represent a higher risk for the lender.
• Payment Structure: Payments on the second mortgage are usually separate from your first mortgage, and you’ll be required to make regular payments, often over a shorter term.
• Loan-to-Value Ratio: Lenders generally allow up to 85% of your home’s appraised value, including the balance of your first mortgage.
  A second mortgage can be a great option if you need quick access to funds, but it’s important to carefully consider the added payments and interest costs. I can help you assess whether this is the right choice for you.

• Mortgage Renewal:
  • A mortgage renewal occurs at the end of your current mortgage term (typically every 1-5 years). During this time, you can renegotiate the terms of your mortgage, such as the interest rate, term length, and lender. However, the balance of your mortgage remains the same.
  • If you’re happy with your current lender and their terms, you simply sign a new agreement. If you want better terms, you can shop around for a new lender.
  • Mortgage renewal is a simple process, but it’s always a good idea to review your options to ensure you’re getting the best deal.
• Mortgage Refinancing:
  • Refinancing involves renegotiating the terms of your mortgage and taking out a new loan, usually to access home equity.
  • It’s typically done to take advantage of better rates, change the length of the mortgage, or consolidate debt.
  • Refinancing may also involve a change in your mortgage amount if you’re looking to borrow additional funds from your home equity.
  • Refinancing requires a more thorough approval process, including an appraisal and possible prepayment penalties.

The key difference is that renewal is about adjusting the terms of an existing mortgage, while refinancing is about obtaining a new mortgage to either change terms or access extra funds. I can help you decide which option is best for your situation!