Here are answers to some frequently asked questions on the government changes to down payment requirements that take effect today, February 15, 2016.

The down payment requirement has increased from five per cent, to ten per cent for the portion of the purchase price above $500,000, but less than $1,000,000.

The application of the government down payment requirement during any transition can often be confusing. To clarify the application of this requirement, and the grandfathering of this new requirement, here’s a few snippets of what we learned from CMHC’s underwriting department.

Purchases

• The new minimum down payment requirement naturally only applies to purchase transactions, not refinancing your mortgage.

Unchanged Premiums

• We are advised mortgage insurance premiums will remain unchanged.

Important dates to remember

• If you received an insured mortgage approval between December 11, 2015 and February 14, 2016 (inclusively) with a planned closing date after July 1, 2016, the new down payment requirement will still apply.
• If you received an insured mortgage approval before December 11, 2015, and you entered into a purchase and sale agreement also before December 11, 2015, the “old” down payment requirement may still apply regardless of the closing date.
• If your planned closing date is postponed after July 1, 2016, “CMHC acknowledges industry realities and will accommodate delays that may occur that are beyond a lender or buyer’s control and will be looked at on a case-by-case basis.”

Switching Lenders

• If you wish to give your mortgage business to a different financial institution for a more competitive rate or product and you received an insured mortgage approval under the “old” down payment requirement before December 11, 2015 and the property and the buyers(s) remain unchanged, the new mortgage insurance application request made by this new lender would be reviewed in accordance with the “old” requirement, regardless of the date the alternative lender requests mortgage insurance approval from CMHC.
• Similarly, if the mortgage insurance approval from the existing lender was submitted between December 11, 2015 and February 14, 2016 inclusively with a planned closing date on or before July 1, 2016, this new mortgage insurance approval request will be reviewed in accordance with the “old” requirement.”

Again, these are just a few snippets of some frequently asked questions. You may likely have a few of your own so let me know yours. Be certain to speak to your own mortgage broker concerning your purchase if you’re under way as well.

Have a great rest of the week and remember, we are always here at Dominion Lending Centres to help you with your mortgage questions!

Here are the steps you need to follow to ensure you get a mortgage that’s right for you!

Step One: Pre-Qualify & Strategize!

Step one is to get pre-qualified, which should not be confused with the term pre-approved. The big difference is that no approval is ever given by a lender until they have an opportunity to examine the property that you wish to purchase. Obviously that can’t happen before you actually go home shopping. Pre-qualifying will first focus on your credit, your debt load, your income, and what type of mortgage you are looking for. The best part is that an independent mortgage broker can do this in person at your house or our office, over the phone, or online through a secure mortgage application.

Once your mortgage broker has all the basic information, it’s time to find out what you’re financial and homeownership goals are. As mortgage brokers that ‘custom build’ mortgages to your specifications, this information is imperative in allowing them to seek out a lender and a mortgage product that will help you meet your goals. You’ll want to be sure you are getting a great rate, but just as important as rate are the other features of your mortgage such as pay down strategies, pre-payment privileges, and exit strategies. There’s a lot more to a mortgage than rate! Once you have selected the lender, product and strategies that meet your needs, you will know exactly what price range and quality of home you can look for!

Step Two: Find the Right Property

Once you have been pre-qualified, you can go house hunting! If you need a Realtor to help you with this, your mortgage broker can recommend a few for you to choose from.

Step Three: Approval

As soon as you have decided on the property you wish to buy, your mortgage broker will send your application and property information to the lender of your choice for approval. Once the lender has an opportunity to look at your application and the property you wish to buy, the lender will issue a “commitment” letter outlining the terms of the mortgage and any further documents they wish to see to verify your application information. Your mortgage broker will discuss the commitment from the lender with you and then forward any requested information to the lender for their review.

Step Four: The Lawyer’s Turn

At this point, the lender will have reviewed your supporting documents and notified your lawyer. Your lawyer will process all the necessary title changes and set up a time for you to meet with him to sign the mortgage documents and go over the fine print.

Step 5: Get the Keys!

By the day of your closing the mortgage lender will have sent the funds to your lawyer’s trust account. Your lawyer will communicate with the seller’s lawyer regarding an exchange of cash for keys and you are then the proud owner of your own home.

Understanding the mortgage process can help you see and understand how your entire team of professionals at Dominion Lending Centres work together to help you start your life in your new dream home!

New credit reporting and what it says about you and your spending habits may make all the difference between you buying a home now or later.

When home buyers contact me to apply for a mortgage, I always review their credit report with them along with the rest of their application, before they start looking at homes with a Realtor. If there are any issues with the credit history we can determine the reason, the next course of action and how it will impact financing a purchase.

There is a lot of valuable information in a credit report which provides an overview for lenders about your ability to borrow money. Consistent late payments, collections and bankruptcy have the biggest impact on lowering your score. Running a high balance or over your limit on your credit cards will also drive your credit score down. Scores range from 300-900 and a difference in score by as little as 50 points says a lot to a lender about you as the borrower. For example, a score of 550-599 represents 21% of delinquencies while a score of 600-649 only 11%. Delinquency rates are defined as those who have late payments beyond 90 days. If your score falls from one bracket to the lower bracket with late payments or collections, the difference can affect the interest rate you can receive or, worse yet, if you can qualify for the mortgage amount you need.

The most recent software update for the credit bureau reporting system has added some features which could have a significant impact on reporting. The new reports, which were released in early 2015, show three credit scores and one overall score.

The first score ranks based on open credit and balance to limit ratio. So if you have lots of open credit and your balances are low or reasonable the score is higher. High balances or over limit on all credit cards will drop your score.

The second score ranks based on late payments and collections over $250. If your late payments are beyond 90 days, your score will drop dramatically.

The third score ranks based on the number of third party collections in the last 3 years and the oldest revolving credit. So if you have outstanding parking tickets or an unpaid gym membership that you forgot about — they will come back to haunt you.

These individual scores were created to show specific behaviour by a borrower and if the credit score is trending up or down. This can give the lender an indication of a chronic issues with a potential borrower or if they are consistent with their credit usage.

With mortgage payments, lines of credit, auto loans, credit cards and even cell phone bills now reporting on the credit report,  consumers have to be diligent with spending and paying bills on time.

I recommend to all my clients to keep your credit report clean — after all, it is your identity.

Establish at least two trade lines of a minimum of $2,000. One credit card and one personal line of credit for example.

Maintain lower balances (< 65%) on all lines of credit or credit cards.

Make payments a few days before they are due to ensure you are always on time

If you get a parking ticket, fight it and lose – pay the bill and don’t let it go to collection.

Look at your credit report annually and certainly 3-6 months before making any major purchase such as a car or home. To view your own credit report visit www.equifax.ca.

Any time you apply for credit in the form of a credit card, personal loan, auto loan, or cell phone, the company lending you money will want to access your credit report first. Your credit report is a snapshot of how you have repaid your financial obligations in your past. Lenders will use this information to verify details about you, see your borrowing activities, credit applications and repayment history. Part of this information is used to make up your credit score.

WHAT IS MY CREDIT SCORE?

Based on the information contained in your credit report, you will be assigned a credit score. What is my credit score, you ask? Your credit score is used by lenders to predict the probability that you will repay your future debt. Your credit score can change frequently based on multiple credit applications in a short time, missing payments and maxing out your available funds.

WHAT IS A GOOD SCORE?

Depending on which company is calculating your credit score, you can expect a range anywhere from 300 at the lowest end up to 900 at the highest end. The higher your score, the better the probability you will repay your loan.

As far as mortgages are concerned, each lender has their own criteria for what scores they deem acceptable. Generally speaking, anything over 680 is considered good in most lender’s eyes and will give you access to the most lenders and the best rates. A score between 600-679 will give you a limited number of options and might not be the best rates. Anything below 600 will leave you with very few lenders and higher interest rates to account for added risk.

5 KEY FACTORS CONTRIBUTING TO YOUR CREDIT SCORE

A number of different factors go into calculating your credit score. These factors are based on what someone does or doesn’t do with the credit they already have available. That is why the score changes frequently. Here are the 5 factors that determine your credit score:

1. PAYMENT HISTORY – 35%
The most important factor when calculating your credit score is your payment history. Creditors want to know if you will pay them back the money you are asking them to loan you.

Payment history reflects all the re-payments you make on your consumer debts. Your creditors will report (monthly) every time you make a payment to your credit cards, lines of credit, auto loans, personal loans, student loans, cell phone bills on contract and any other debts you may have. Interestingly enough, mortgage payments are not reflected on your credit report.

Your payment history shows information about whether or not you have re-paid your debts as agreed, have deferred or missed payments, any past due payments, a history of late payments and if you have any debts in collection as well as any bankruptcy, judgments, or liens, etc.

Your score also reflects how recent any late payments or collection activities are. The older the information gets, the less it will impact your score.

2. HOW MUCH IS OWED – 30%
When applying for new credit, how much you already owe is a big factor in determining your approved limit. Your current payments and debt obligations will help creditors access your level of debt and your ability to repay your debt obligations.

If you show multiple credit lines maxed out, say three credit cards and a line of credit, in the eyes of a lender the chances of you repaying new debt is low and thus you would be considered a high risk to default.

The amount of credit you use on an ongoing basis is considered as well. If you continually use 75% of your limit on your credit cards and lines of credit, this will affect your credit score negatively. Try to carry no more than 30% of your available credit on a month to month basis if practical.

3. LENGTH OF CREDIT HISTORY – 15%
If you’ve used credit for many years, your credit report should provide an accurate picture of how you use credit. For someone who has not used credit for a very long time, it is difficult to tell if they really know how to use credit responsibly.

Good or bad, most information will be automatically removed from someone’s credit report after 6 – 7 years, so the only way to keep a credit report active, is to use credit, at least very minimally, on an ongoing basis.

Time is needed to get a true picture of how responsible someone is with credit. This is why the length of your credit history is the third most important factor in your credit score calculation.

If you have recently obtained credit for the first time, your credit score will not be very strong. However, if you have been using credit responsibly for many years, this factor can work in your favour. If you need to apply for a low interest credit card to build your credit, apply online here.

4. NEW CREDIT APPLICATIONS – 10%
Applying for new credit in a short time span can signify financial stress. If you are a smart consumer, you should always shop around to get the best deal. You might walk into seven different banks and credit unions to shop your mortgage and hear what they can offer you. Smart move, right? – wrong!

Every bank will want to run your credit report to access your creditworthiness and having multiple “hits” to you credit report in a short period will reflect negatively. One of the benefits of using a Mortgage Broker is we use one credit report and shop your business to multiple lenders.

This part of your credit score takes into account the number of times your credit has been checked in the last 5 years, the number of credit accounts you have recently opened, how much time has passed since you opened any new accounts and the time since your most recent credit inquiries. This part of your credit score will also evaluate whether or not you are re-establishing your credit history following past payment problems.

5. TYPES OF CREDIT USED – 10%
Different types of credit shed light on how you manage your money overall. For example, deferred interest or payment plans can indicate that you aren’t able to save up for purchases ahead of time. Consolidation loans mean that you’ve had difficulty paying your debts in the past. A line of credit is a revolving form of credit, like a credit card, and it’s easier to get into trouble with a revolving form of credit than with an installment loan where you make payments for a set amount of years and then it’s paid in full.

If you focus on managing your finances wisely and only apply for credit as you need it, this part of your score should take care of itself.

WHERE DO YOU GET YOUR CREDIT REPORT?

You may contact Equifax and Trans Union to access your credit report. They may charge you a fee.

When signing your mortgage commitment letter you will have to choose your payment frequency. If your goal is to re-pay your mortgage as quickly as possible, then you need to understand how different payment options will affect your repayment schedule.

So what are your options?

In general, most lenders will offer the borrower the option to decide which repayment schedule fits best with their lifestyle. The options include monthly, semi-monthly, bi-weekly, accelerated bi-weekly, weekly and accelerated weekly payments. Let’s use some simple math to determine which payment frequency will assist you in paying back your mortgage in the shortest time possible.

For the purposes of this exercise and to keep things simple, let’s use $100,000 as our mortgage amount. We’ll use a 5 year fixed rate at 2.54% with a 25 year amortization period and interest being compounded semi-annually.

As you can see from the table above, choosing to pay your mortgage more frequently doesn’t result in reducing your amortization schedule. The key to reducing your amortization is to make sure you choose an accelerated re-payment schedule.

We are going to focus on Accelerated bi-weekly vs. bi-weekly payments but the same principle can be applied to accelerated weekly payments as well.

Okay, we’ve just determined that accelerating your mortgage payments will reduce your amortization and the interest you pay. How does accelerated bi-weekly vs bi-weekly result in more principle being repaid?

It’s important to think of your payments as a stream of income for the mortgage lender. Mortgage payments are comprised of principal and interest payments. The interest is calculated based on your outstanding principal balance, meaning once the interest has been paid, the remainder of your payment is used towards paying down your principal balance.

By choosing an accelerated repayment schedule, the monthly payment is divided by 2 (bi-weekly) or by 4 (weekly). There are 52 weeks in a calendar year so if you make 26 bi-weekly payments, you are in effect paying your Lender the equivalent of 13 months of payments per year compared to 12 months payments with all non-accelerated repayment schedules.

This accelerated repayment of principal is what shortens your amortization.

13 monthly payments ÷ 26 = accelerated bi-weekly payment

Example: ($449.96 per month x 13 months) ÷ 26 = $224.98 accelerated bi-weekly payment

With a non-accelerated or regular payment plan, the Lender takes 12 months worth of payments and divides this by either 26 or 52 to come up with the bi-weekly (or weekly) payment. With this adjusted payment, the Lender still receives a stream of income of 12 monthly payments per year, so there is no additional principal available to accelerate the amortization.

12 monthly payments ÷ 26 = regular bi-weekly payment

Example: ($449.96 per month x 12 months) ÷ 26 = $207.67 regular bi-weekly payment

So now you know why choosing accelerated bi-weekly vs. bi-weekly payments results in 1 extra month of payments per year, which in turn shortens your amortization.

I always recommend this to anyone who can afford the increase in payment but I understand this option isn’t right for everyone. Another option to help shorten your amortization is to increase your payments, meaning more principal paid.

When you’re choosing your next mortgage, make sure you discuss payment options with your Dominion Lending Centres mortgage professional that align with your overall goals for repaying your mortgage.

Interest rates are only one of many features that should be looked at when you are applying for a mortgage. But all things being equal, the interest rate may be more important than you think.

I was reviewing mortgage options with a client and the only thing they were interested in was the mortgage rate. There was no concern about all the other conditions that could end up being quite costly and since I could only offer him what he considered a small reduction, the client said “the bank’s rate was only a little higher and I feel more comfortable leaving everything I have with my bank for such a small difference.” What was the difference? I will get to that in a minute.

The mortgage renewal form you get in the mail is another cautionary note. I have had clients send me a copy of their renewal form. So far, in every case the renewal rate was higher than what I was currently able to get them. The last one I saw was .25% higher than what I could offer.

ACCORDING TO A RECENT MARITZ/CAAMP SURVEY, CLIENTS WHO USED THE SERVICES OF A MORTGAGE BROKER BENEFITED WITH AN INTEREST RATE .045% LOWER THAN THOSE THAT DEALT DIRECTLY WITH THEIR LENDERS.

So what does this fraction of a percentage mean for you? Let’s look at a $500,000 mortgage at 2.64% compared to 2.84%. That is only .2% or, to look at it a different way, it is about $50 a month or $600 a year savings by taking the 2.64% mortgage.

Here are a few options to increase net worth.

1. You take the 2.64% rate and you invest the $600 a year into a growth mutual fund that averages 10%. Even though over the years, as your mortgage goes down, the savings may not be as great, you make up the difference and keep investing that $600 a year for the next 30 years. That is a small difference, but in 30 years it has added up to over $100,000 in your tax free savings account.
2. You take out the 2.84% and say I like my bank and I am comfortable with the bank making the extra money and increasing their bottom line off my mortgage.
3. With interest rates being so low, you could look at increasing your cash flow by stretching out your amortization and lowering your payment. Then you take the extra cash flow and invest it with your financial adviser in your tax free savings account.
4. If you have extra equity in your home and have not contributed to your Tax Free Savings Account, consider refinancing and topping up your TFSA. As of 2016, the accumulative amount you can contribute is $51,000 per person 19 years or old in BC. So that would be $102,000 per couple. Invest that $102,000 and get an 8% return, you end up with $698,544 tax free money after 25 years and you paid back the mortgage and interest payments. If rates stayed the same throughout the 25 years at 2.69%, the whole $139,906 would be paid back. So you make a tax free profit of $558,638 by freeing up some capital to invest. Your total cost is $37,906 in interest.

There are many details to a mortgage and the rate is just one of them. Any of us here at Dominion Lending Centres would be happy to review your future mortgage needs to make sure you are maximizing your mortgage to your benefit.

We all know the real estate industry is hot right now and for many getting into the housing market, it can be a pipe dream. With tightening government and lending regulations, historically low interest rates and soaring housing prices, it can be a daunting endeavour for anyone.

Whether you are a first time home buyer, wanting to upsize to accommodate your growing family or purchasing an investment property, these are the factors that lenders will be looking at. This will determine which mortgage type and interest rate will be available to you.

Know Your 5 C’s:

Collateral – The property itself that you are hoping to purchase.

Capital – Where is your down payment coming from? At a minimum, you need 5% down for a “high ratio” insured mortgage or a “conventional” mortgage with 20% down. This money can come from your own resources or can be gifted from a family member. Requirements will vary, so make sure to check with your mortgage professional.

Credit – Do you have proven credit and show a good history of repayment?

Capacity – The most important by far! How are you going to pay for your mortgage? Proof of income and requirements differ depending on whether you are salaried, self- employed, paid hourly or somewhere in between!

Character – Are you a super person? This is the least important factor to lenders these days.

Just as important to consider, when deciding on your mortgage, is to determine your current financial situation and longer term goals. This will help you decide which mortgage term and amortization (for example a 5 year term with a 25 year amortization) and mortgage rate (variable or fixed) is best for you. Finally, don’t forget to discuss the FEATURES that come with your mortgage as this could save you thousands of dollars and potential grief over the term of the mortgage. These features can include pre-payment options, lower early payout penalties and portability, providing you with flexibility and options for paying down your mortgage faster or making changes, should the need arise.

Mortgages are NOT a one size fits all, so always make sure to contact and discuss your options with a licensed mortgage professional BEFORE preparing to find the home of your dreams.

We have finally seen a bump up in interest rates. The 5 year government bond rate hit a low of about .60 in mid-September and is now pushing towards 1%. The lenders have reacted to this and we have seen the low rates of 2.59% on the 5 year fixed rate disappear. Some banks have raised their 5 year fixed rate to 2.99%, while there are a few lenders still offering 2.64% on high ratio mortgages. The banks have also been reducing their discount rate on their variable mortgages. Where there were some rates as low as prime -.80 they are now floating between -.30 to -.50. Since the Bank of Canada and the prime rate have not changed, why is the discount being reduced? Could it be that the lenders are concerned that the Bank of Canada could drop rates again in the near future?

With all the recent changes, what does the future hold? The European Central Bank (EBC) just cut its key interest rate to -0.3% and now we have the Bank of Canada talking about the possibility of the Bank rate dropping to 0% and the willingness to go negative to help spur on the Canadian economy. Negative interest rates are another whole topic.

So where are interest rates going? Reading the economic data is like looking down the road. The further down the road you look the less clear it becomes. Therefore, we must keep an eye on the road so to speak, to know what is best for our personal mortgage situation and if we should be making any changes to our current situation. This is one of many good reasons to have a mortgage adviser, as it is to have a financial adviser.

The current economic data tells us interest rates will remain low for some time to come. The 5-yr Canada Bond Rate has fluctuated in a range between 0.60% and 1.0% for the last year and currently is sitting at about 0.86%. I suspect we will be in this range for some time to come. Looking at the price of oil and commodities in general and the huge impact they have on the Canadian GDP does not bode well for the Canadian economy. That being the case, what is the best mortgage for you? Consult your Dominion Lending Centres mortgage professional on the options that best fit your situation.

If you come across clients that are looking for mortgage advice, I am happy to review anyone’s situation, even if they are just looking for information. I offer free mortgage reviews as many mortgage holders can better their situation by renewing early or positioning themselves to secure the best mortgage well before their mortgage comes due. I follow the economy and bond rates on a daily basis; therefore, have been able to proactively secure low rates in advance for clients who have done mortgage reviews with me well before their mortgage was due.

If there is ever anything I can do to help put you in a better financial situation please contact me at Dominion Lending Centres.

The Bank of Canada kept the key overnight interest rate unchanged at 0.5 percent as expected, as the Federal Reserve is poised to hike rates for the first time in nearly 10 years. The Bank’s decision did not, however, reflect complacency with the state of the Canadian economy, but rather a hand-off to the much ballyhooed fiscal stimulus in the coming year by the new Liberal government. With interest rates so close to the zero lower bound, it’s a good thing that firepower will be coming from another source. This is no time for misplaced fiscal austerity. If anything, the risk is that the government won’t do enough to reboot economic activity, paranoid about looming deficits and the erroneous assumption that tax hikes for the rich will somehow help the economy or address income inequality.

The Canadian economy, though improved from the first-half rout, is on very shaky ground. The third quarter GDP figures released this week showed a rebound to a 2.3 percent annual growth pace, largely the result of an improvement in exports–not surprising given the robust demand for autos in the U.S. and the weakness in the Canadian dollar. But the September data for GDP by industry was very troubling as real gross domestic product fell 0.5 percent following three consecutive monthly increases, primarily as a result of declines in mining, quarrying and oil and gas extraction and, to a lesser extent, manufacturing weakness.

Another pocket of vulnerability in the recent data was in the finance and insurance sector, which has declined for two consecutive months. This is particularly troubling as the major Canadian banks have announced expected layoffs in their Canadian operations for this year and next. With interest rate-spread compression and a weak economy, all the banks are in cost-cutting mode in this country. Mortgage rates have clearly bottomed despite the Bank of Canada’s inaction.

Oil and other commodity prices have continued to fall, to the surprise of the Bank of Canada. This marked further deterioration in Canada’s terms of trade is depressing net exports and the damage done to our labour markets and cancelled investment projects–not to mention the Canadian stock market–is far from over. The negative backdrop in Alberta, Saskatchewan and Atlantic Canada is now quite evident in the slowdown in housing activity in those regions. Not only have home sales and house prices edged downward, but a telling leading indicator–rental vacancy rates–have risen sharply in some key resource centres (see chart below).

Note that despite the strong pace of condo construction in both Toronto and Vancouver, rental vacancy rates remain extremely low in both cities.

The Bank of Canada expects GDP growth to moderate in the fourth quarter and to grow at a rate “above potential” in 2016. Given that the Bank’s estimate of potential GDP growth in Canada is just under 2 percent, this is hardly a positive outlook. I expect Q4 GDP growth of only about 1 percent, which will not be enough to prompt a rate cut, but will certainly weigh on the Canadian dollar as the U.S. moves to hike interest rates at the next Fed policy announcement on December 16. Canadian growth next year will likely be around 2 percent, compared to an estimated mere 1.1 percent this year.

Friday’s employment report for November in both the U.S. and Canada will be telling. Clearly, as the Bank said, “policy divergence is expected to remain a prominent theme.” Easing by the European Central Bank tomorrow; tightening by the Fed in two weeks; and, the Bank of Canada on hold for the foreseeable future.

THIS ONE TIME ADVANCE WILL ALLOW YOU TO MAKE THE CHANGES YOU NEED TO MAKE YOUR HOME PERFECT!

Have you been trying to find that almost perfect home? All homes have their flaws and imperfections. Some consumers can deal with these deficiencies in a home, but for others this can be a deal breaker.

Maybe the kitchen needs an update, the bathroom is in desperate need of a makeover or maybe the home just needs a fresh coat of paint with the enhancement of hardwood floors, the quickest, cost effective and most powerful impact on a home!

The purchase plus improvement product is for consumers looking to purchase a home that has great potential but needs a little TLC. With the purchase plus improvement program you can make those needed improvements on your home immediately after taking possession and you can have these improvement costs rolled into your home loan for one easy payment. All of these projects can increase functionality, beauty and potentially add value to your dream home.

As a rule with this home improvement financing option, your improvement maximum is 10% of the “as improved value” of the home to a maximum of $40,000 of improvements. With as little as 5% down payment, this product can work to get you into a home that is near perfect!

For example: if the purchase price of the home is $350,000 and the “as improved value” or post renovations of the home is valued at $390,000 you can qualify for 10% of the $390,000. Which means you can borrow $39,000 to cover your renovation expenses.

Once you have found a home, you will have to provide quotes from a licensed contractor including all costs associated with your renovations. Your mortgage planner will need to submit these quotes along with your purchase approval to the lender.

The lender may require an appraisal of the home with an as-is and as-complete value. However, if you are putting less than 20% down payment on the purchase, often only a final inspection is required to confirm the work on the quotes has, in fact, been done.

Once closing day has arrived, you will be required to pay your down payment, and at this point mortgage funds will be advanced. On the day you take possession of your home you can start working on the renovations. Make note that the renovations will have to be fully completed and inspected before the real estate lawyer can advance you the funds that the lender has been instructed to hold back. In other words, you will have to find some way to pay for the contractor to do the work, you will get reimbursed the funds once it has been inspected and confirmed that the work is completed. At no point will you be given the money prior to work being completed.

Depending on the lender, there are many variations to this mortgage product so it would be a good idea to speak with a mortgage professional at Dominion Lending Centres.

If you think that you can customize your home with this mortgage product, give me a call, I would love to help you through your home buying process and help you achieve your dream of homeownership.