First Time Home Buyers
True or False: First Time home buyers have to buy mortgage default insurance.
False: Mortgage default insurance is required for buyers putting down less than 20%, regardless of whether they are first-time home buyers.
True or False: Bank mortgage advisors have to be licensed to deal in mortgages.
False. Mortgage advisors employed directly by banks do not require a provincial mortgage agent or broker license.
True or False: You must renew your mortgage with your existing lender.
False: You can move to a new lender at maturity.
Which mortgage type is directly impacted when the Bank of Canada changes its overnight rate? Fixed or Variable
Variable
True or False: No-Frills mortgages typically have lower rates.
True: No-frills mortgages typically offer a lower interest rate in exchange for stricter rules.
What is the minimum down payment required (%) in Canada for a home priced at $500,000 or less?
5%
True or False: Going to your bank guarantees you the best mortgage rate
False: mortgage agents shop multiple lenders
Name one reason someone might refinance their mortgage.
Debt consolidation / renovations / investing / access equity / better rate
True or False: You can switch from variable to fixed rate mortgage during the term with most lenders.
True. Most lenders allow you to convert your variable rate mortgage to a fixed rate mortgage.
True or False: Making extra mortgage payments outside of your regularly scheduled payments can always be done anytime without restriction.
False: Different lenders have different pre-payment privileges. Majority of lenders will allow you to pre-between 15-20% of your original mortgage balance annually.
What is the maximum land transfer refund amount for first time home buyers?
$4000
True or False: Self-employed borrowers that don't claim any income on their tax returns won't qualify for a mortgage.
False - Alternative lenders have programs to qualify borrowers using business bank statements.
True or False: Property tax arrears can't be paid out with a mortgage refinance.
False: There are many lenders that will allow us to pay out property tax arrears.
True or False: When you hit the trigger rate on your variable rate mortgage, it means you're saving the maximum amount of money on interest.
False: Trigger rate is the specific interest rate for a variable-rate mortgage where your regular payment stops covering the interest, meaning none of the money goes to principal, and the unpaid interest gets added to your mortgage balance every month (negative amortization)
What does HELOC stand for?
Home Equity Line of Credit
What registered account allows first-time buyers to save up to $40,000 tax-deductible for a first home
FHSA (First Home Savings Account)
True or False: A pre-approval guarantees you qualify for a mortgage.
False: It’s subject to conditions and property review
What is one major mistake homeowners make at renewal time?
Sign renewal without shopping around
True or False: Fixed rate mortgages typically carry lower penalties to break the mortgage before end of term vs variable rate mortgages.
False: Fixed-rate mortgages typically carry an Interest Rate Differential (IRD) penalty, which is often much higher than the penalty on a variable-rate mortgage.
True or False: The lowest rate mortgage is obviously always the best choice.
False: There is a lot more to a mortgage than interest rate. Lowest rate doesn't always mean lowest cost over the life of your mortgage.
How many years must you be out of the housing market to qualify as a first-time buyer again?
4 years
What’s the maximum portion of a home’s value that can typically be accessed through a HELOC in Canada?
65%
True or False: It's possible to switch to a new lender at renewal time at no cost to the borrower.
True: Majority of lenders have a no-fee switch program where the new lender will cover the discharge fee, appraisal and transfer costs.
True or False: Adjustable Rate Mortgage (ARM) payments don't change with prime.
False: Adjustable Rate Mortgage payments change with Prime. Some lenders only offer ARM mortgages while some banks offer variable rate mortgages with static payments.
What clause in a mortgage can restrict refinancing during the term of a mortgage.
Bonafide Sales clause. A Bonafide Sales Clause means that you can only get out of your current mortgage by selling the property.