First Mortgages in Ontario | Northwood Mortgage

First mortgage Ontario

At Northwood Mortgage, we realize that your first mortgage is a big step for you, especially considering the high prices of real estate in Ontario. Beyond the closing costs and other expenses you are likely to find in a bank mortgage calculator, there are some other one-time and recurrent costs of owning a home in Ontario that you should consider.

Can you afford your Ontario home?

Many bank affordability calculators leave out the cost of property maintenance and upkeep such as a new roof or appliances.

These calculators may factor in other existing debts, like an auto loan or student loan, but they still omit the monthly cost of water, electricity, internet, and phone service, among others. You might also want to upgrade your new house.

The benefit of using a mortgage calculator is to help you anticipate how much you can borrow at different rates, but don’t forget to take into account additional costs of owning a home, particularly so when saving the amount needed for a down payment.

Here are some of the expenses you will incur when getting your first mortgage in Ontario:

High ratio (or default) mortgage insurance premium and PST: Lenders typically require you to insure your mortgage if your deposit is less than 20 percent of the home purchase price. This ratio minus the PST is added to your mortgage balance

Appraisal fee: Your mortgage bank will probably have hired a commercial appraiser to get an independent view of the value of the property you want to purchase, and whether or not it satisfies the lending criteria

Bridge financing: If your home purchase is wrapped up before the sale of your current home, you may have to finance the cost of the home purchase until the sale is complete. Bridge financing is costly and not recommended, so discuss it with your agent

Status Certificate: This applies to condominium/strata units, and refers to documentation of the condo corporation’s legal state and financial well-being

Legal fees, title insurance, and land transfer tax are calculated on a percentage of the purchase price of your property

What do I need to get my first mortgage?
A good mortgage broker along with picture ID, proof of income, and proof of downpayment
When is the right time to start applying for a mortgage?
6 months prior to your plan to purchase. This way any issues can be dealt with or any information that is required can be acquired.
Can I get pre-approved for a mortgage before finding the home I want to buy?
Yes. A Pre-approved mortgage can give you an idea on what amount that you can qualify for on a mortgage.
What Is CMHC?
CMHC, Sagen and Canada Guaranty are mortgage lenders’ default insurers. They insure lenders against losses in case of default on a mortgage. This insurance is required when a buyer is putting down less than 20% of the purchase price for a home they intend to live in.