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TMG The Mortgage Group Alberta Ltd.

Q. How much money do I need for my down payment?

A. When buying a property you generally need at least 5% of the purchase price for your down payment. A few lenders do have a borrowed down payment options but in order to qualify for this you need exceptional credit, low debt, and long employment history. 

Q. What about a gifted down payment?

A. If you have a family member who would like to gift you the money for your down payment that is an option. 

Q. I'm being told I need mortgage insurance, what is this?

A. If you put less than 20% down you need mortgage insurance. In Canada there are 3 Mortgage Insurers: CMHC, Genworth, and Canada Guaranty. What these insurers do is offer protection to the lender, if you default on your mortgage (quit paying), the lender doesn't absorb the cost, the insurer does. For this added mandatory protection they add a premium to your total mortgage amount. 

Q. I already paid mortgage insurance on my current property, do I have to pay it again?

A. Many people don't know that you can in fact take your mortgage insurance with you when you move. If the new property is worth more than the current residence rather than paying the whole premium again you can simply pay a top up charge to cover the remainder.

Q. The lawyer told me I owe more than my down payment amount, why is this?

A. When you bring your bank draft to the lawyer this will include the down payment, lawyer fees, and any other closing costs. For example if you are buying a property after June 30th then the seller will have paid the taxes for the year. You will owe them back the portion from when you take possession to December 30th.