These FAQs cover a range of topics, including how much one can afford to pay for a home, the minimum down payment needed to purchase a home, the costs associated with buying a home, and information about fixed-rate and variable-rate mortgages.

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Here's a brief answer summary for each FAQ:

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1. How much can I afford to pay for a home?

• To determine how much you can afford, calculate 39% of your income for housing-related expenses (mortgage payment, property taxes, and heating costs).

• Calculate 44% of your taxable income and deduct all monthly debt payments (car loans, credit cards, etc.).

• The lesser of the two calculations helps determine how much income can be used for housing payments.

• Also, consider your comfort level with the monthly expenses and new stress-test regulations.

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2. What is a home inspection, and should I have one done?

• A home inspection is a visual examination of a property's condition, conducted by a professional home inspector.

• It covers major components and systems, ensuring you're aware of any issues before buying.

• The inspection results are provided in a detailed written report.

• A home inspection helps protect your interests and provides peace of mind.

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3. What is the minimum down payment needed to purchase a home?

• A minimum down payment of 5% is required, subject to maximum price restrictions.

• Other factors like being self-employed or having poor credit may impact the required down payment.

• At least 5% of the down payment must be from your own cash resources or a gift from a family member.

• Mortgage loan insurance is required for down payments less than 20%.

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4. What is mortgage loan insurance?

• Mortgage default insurance is legally required for high-ratio mortgages (down payment less than 20%).

• It protects lenders in case of borrower default or foreclosure.

• Premiums for mortgage insurance range from 0.50% to 7.0% and can be added to the mortgage amount.

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5. What is a conventional mortgage?

• A conventional mortgage typically requires a down payment of 20% or more, avoiding the need for mortgage default insurance.

• Interest rates may be slightly higher on conventional mortgages.

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6. How does bankruptcy affect qualification for a mortgage?

• After bankruptcy, re-establishing credit is essential for mortgage qualification.

• Some lenders may consider providing mortgage financing based on individual circumstances.

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7. How will child support affect your mortgage qualification?

• Child support paid is deducted from your total income before determining the mortgage amount you qualify for.

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• Child support received is added to your income, provided proof of regular receipt is available.

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8. Can I get a mortgage to purchase a home?

• Yes, subject to qualification. Options exist for first-time homebuyers and existing homeowners.

• Government programs and incentives are available for first-time buyers.

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9. Can I use gift funds as a down payment?

• Most lenders accept down payment funds as gifts from family members.

• A signed gift letter confirming it's a true gift and not a loan is typically required.

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10. What is a pre-approved mortgage? -

• A pre-approved mortgage determines the maximum loan amount you qualify for and provides an interest rate guarantee. - It's an essential step in the home-buying process.

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11. How early can I renew my mortgage?

• Mortgage renewal can start as early as 120 days before the current term ends. - Starting early allows time to explore better rates and mortgage options.

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12. What is a down payment?

• A down payment is a portion of the purchase price paid upfront when buying a home. - It secures equity in the property and indicates financial commitment.

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13. Can I buy a home with as little as 5% down?

• Yes, you can buy a home with a minimum 5% down payment, subject to certain restrictions and mortgage insurance requirements.

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14. How can you pay off your mortgage faster?

• Strategies to pay off your mortgage faster include biweekly accelerated payments, lump sum payments, doubling up on monthly payments, and shorter amortization.

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15. How can I use RRSPs to help buy my first home?

• The Home Buyers' Plan (HBP) allows first-time buyers to withdraw up to $35,000 from their RRSPs for a down payment and repay it within 15 years.

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16. What are the costs associated with buying a home?

• Costs include down payment, deposit, home inspection fee, mortgage default insurance, land transfer tax, legal fees, disbursements, title insurance, and more.

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17. What should the length of my mortgage term be?

• The choice of mortgage term depends on your financial goals, risk tolerance, and market conditions. - Factors like selling plans and interest rate outlook also influence the decision.

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18. Should I go with a short or long-term mortgage?

• Short-term mortgages offer flexibility and lower rates, while long-term mortgages provide rate stability. - The choice depends on individual preferences and financial goals.

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19. What is a fixed-rate mortgage?

• A fixed-rate mortgage has an interest rate set for a specific term, offering rate stability and predictable payments.

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20. What is a variable-rate mortgage?

• A variable-rate mortgage has an interest rate tied to the prime lending rate and can fluctuate with market changes.

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These detailed explanations should provide you with a comprehensive understanding of each topic related to mortgages and home buying. If you have further questions or need additional information on any specific topic, feel free to ask!

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