• How do we collect your personal information?

    We collect information through our secured client portal which houses our online forms and web session cookies. HomeHow also receives your information when you email, call, text or come see us in person.

  • How do we keep your information secure?

    We use advanced technology and security to hold and protect your information from unauthorized security mechanisms. We allow access to people who legitimately need your information as part of their HomeHow duties and responsibilities including:

    • Employees and contractors of HomeHow
    • Employees and contractors of our service providers (who are contractually obligated to keep data secure and comply with our privacy policy and relevant laws).

    Unless you ask us not to, we may contact you via email or phone to inform you about specials, new products and services or changes to our privacy policy. We commit to destroy or permanently de-identify your information when it is no longer needed. 

    Under no circumstance will we jeopardize your trust by releasing your confidential information to anyone outside of the HomeHow company. This is our promise to you.

  • What information do I have to provide to HomeHow? 

    For Basic Inquiries: 

    Depending on which option is more convenient for you, we will need one piece of your contact information in order to reach you. This includes:

    • Email address
    • Mobile number for calls and/or text messages

    When Applying for a Mortgage:

    To make sure we know who we are working with, we will need to verify your identity. We will ask for the following information:

    • Legal First and Last Name
    • Driver's License
    • Proof of Employment
    • Proof of Income
    • Proof of Insurance
    • Bank Statements
    • Proof of Downpayment
    • Property Appraisal
    • Home Buying and Selling Record
    • Statement of your Existing Mortgage
  • How much money can I borrow?

    The amount of money you can borrow will be determined based on your current financial circumstance. In general, you can borrow as much as 95% of the property value of your Home. However, your income, debt, household spending and credit rating will affect your borrowing power.

  • How does my income affect my mortgage approval? 

    Lenders assess your borrowing power by looking at your capability to make mortgage payments. In order for lenders to approve your mortgage, they will use one of the following methods:

    Method 1

    Mortgage payment & housing costs must be less than 35% of your pre-tax income.

    Your monthly mortgage payment, property tax and heat expenses should be less than or equal to 35% of your before-tax household monthly income.

    Example 1: APPROVED

    Household income before tax = $10,000

    • Property tax: $250
    • Heat expenses: $200
    • Mortgage payment: $3,000

    = ($250 + $200  + $3,000) / $10,000 = 34.5%)

    Example 2: NOT APPROVED

    Household income before tax = $9,000

    • Property tax: $250
    • Heat expenses: $200
    • Mortgage payment: $3,000

    = ($250 + $200  + $3,000) / $9,000 = 38.3%)

    --

    Method 2

    Mortgage payment, housing cost & debt obligation must be less than 42% of your pre-tax income.

    Your monthly mortgage payment, property tax, heat expenses and debt obligations should be less than or equal to 42% of your before-tax household monthly income.

    Example 1: APPROVED

    Household income before tax = $10,000

    • Property tax: $250
    • Heat expenses: $200
    • Mortgage payment: $2,500
    • Credit card payment: $500
    • Car loan: $400 

    = ($250 + $200 + $2,500 + $500 + $400) / $10,000 = 38.5%)

    Example 2: NOT APPROVED

    Household income before tax = $9,000

    • Property tax: $250
    • Heat expenses: $200
    • Mortgage payment: $3,000
    • Credit card payment: $500
    • Car loan: $400

    = ($250 + $200  + $3,000 + $500 + $400) / $9,000 = 48.3%)

    --

    You can obtain a mortgage approval by buying a less expensive Home or by increasing the down payment. By doing so, your mortgage payment, property tax and heat expenses will decrease.

  • How does my job situation affect my mortgage approval? 

    Lenders will consider your job and pay structure when they approve your mortgage application. The 3 big factors they will review about your occupation is:

    1. Whether you are employed or self-employed
    2. The consistency of your income; whether you earn the same or a different amount on every paycheque
    3. The duration of your employment

    I am self-employed, now what?

    Lenders will require more information from you if you are self-employed. For example, if your business is making income that does not show on your tax filing, you may need to disclose some of your books as well. Lenders will then apply some calculations to determine your borrowing power.

    Mortgage lenders will also require you to prove a steady business income for at least 2 years prior to applying. There could be more complications if you are a self-employed individual. At HomeHow, our job is to simplify this process for you so that you can still focus on your business, while you are making a big purchase decision.

    My income varies from pay cheque to pay cheque

    Lenders will have to work closely with you if you earn unpredictable types of income such as:

    • Commissions
    • Bonuses
    • Overtime pay
    • Self-employment
    • Part-time/seasonal employment 

    Besides pay stubs and a letter of employment, lenders will need to see your tax return and/or notice of assessment. Lenders will apply calculation to determine your borrowing power using an average of your earnings over a period of time.

    Recent job changes

    As long as you are able to provide the necessary paperwork, most job changes will not adversely affect your mortgage application. In particular, if you have a pay raise and move up within your industry or if you have a history of employment with a similar pay structure in the same industry, you shouldn’t come across any issues in this respect. Usually lenders have a more conservative approach assessing your borrowing power if the job change involves:

    • Earning an unpredictable income (bonus or commission)
    • Changing to a completely different industry or position
    • Changing jobs too frequently
  • What is a credit score and how can I get access to my own? 

    Credit scores are calculated and determined by credit reporting agencies to help lenders predict the likelihood that individuals will pay their bills.

    Credit Score Factors

    Payment History

    Whether you're late on your payments or you miss a couple now and then, these actions can greatly impact your credit score. It is so important to keep track of WHEN you pay and HOW much you pay.

    Available Credit

    How much of the total available credit is being used on your credit cards and lines of credit can tell lenders about your financial situation. For example, if you have a credit card limit of $10,000 but you constantly have an unpaid balance of $9,000, this situation will have a negative impact on your credit score.

    Length of Credit History

    The longer credit account history you have (credit card, line of credit, etc.) the more proof of your ability to handle debts. Having a history of bankruptcy, collection issues and/or other derogatory public records may be considered risky and will have a significant negative impact on a credit score.

    Frequency of Credit/Loan Application

    Your credit report will show how many times and how frequently you have applied for a loan/credit card. Lenders perceive "frequent credit application" as a sign of financial distress.

    Calculation of Credit Score

    Everything we've already listed factors into the calculation of your credit score. Credit scores range from 300 to 900, with a higher score showing financial security. If you have a credit score higher than 680, you will have a great selection of lenders to work with and also greater bargaining power for better rates and mortgage terms.

    Knowing your Credit Score

    You can assess your credit score through the two national credit bureaus in Canada: Equifax Canada and TransUnion Canada.

    --

    Fun fact: HomeHow can inquire your credit score on your behalf without leaving an inquiry record on your credit report.

  • Can I get a mortgage if i've declared bankruptcy? 

    Most mortgage lenders will be able to provide you with a mortgage if you are two years clear of bankruptcy.

    Our mortgage specialists will help you build up your credit to be in a position where prime lenders will consider your file. If you have been turned away from your bank, you still have the option to work with HomeHow.

    We will connect you with lenders who will evaluate you on an individual basis and determine if you are a good client to take on.

  • I am retired, what are my mortgage options?

    Whether you are retired or still in the workforce, lenders will still look at your property, credit history, debt level and income. Instead of your regular working income, lenders will look at and consider your pension income, Canada Pension Plan (CPP) or Old Age Security (OAS). Lenders will also require documentation such as:

    • Tax filing record (T4)
    • Notice of Assessment from the past 2 years
    • Current pay stub, direct pay deposit or letter from the organization providing the pension
    • T4 slips for CPP and OAS supported by the most recent direct deposit to confirm income stream

    Reverse Mortgage

    Reverse Mortgage is a mortgage product designed for individuals over the age of 55 that allows them to borrow money from their own Home. You do not have to make any regular mortgage payments as long as you or your spouse live in that particular Home. For more information about reverse mortgages, please visit our webpage or contact us directly

     

  • What income should I disclose on my mortgage application?

    Most lenders will review the following sources of income to determine your borrowing power.

    Taxable Income

    • Income from your occupation including part-time work, seasonal work and contract work
    • Income from your business including unreported income that has not been filed on a tax report
    • Income from commissions, bonuses and overtime
    • Canada Pension Plan (CPP), disability benefits under CPP and private pension income
    • Old Age Security (OAS)
    • Spousal and child support; alimony
    • Maternity/paternity/adoption leave benefits
    • Rental and investment income

    Non-Taxable Income

    • Workers Compensation Payments (WSIB)
    • Non-Taxable Pension Income (e.g. Guaranteed Income Supplement)
    • Disability income provided by private or government; guaranteed for the life of the applicant
    • Indian Act exemption

    You will need to provide income proof such as your tax filing record, notice of assessment, pay stubs and bank deposit records for the lender assessment. Most lenders WILL NOT review the following income:

    • Overseas income that you haven't reported in your tax filing
    • Child care benefits
  • How much downpayment do I need to make a Home purchase? 

    You will need as little as 5% of the Home value as downpayment. In Canada, it is mandatory to purchase mortgage insurance if you have less than 20% of the Home value as downpayment. 

  • What is mortgage insurance?

    In Canada, it is the law to purchase mortgage insurance when you receive a mortgage with less than a 20% downpayment. This insurance covers the lender if you are no longer making your mortgage payments and/or if the sale of the property cannot cover the outstanding loan.

    You can purchase mortgage insurance through the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial and Canada Guaranty. Usually the lender will arrange the purchase of mortgage insurance for you once you have your mortgage approved. Mortgage insurance covers only the lender which is different from Mortgage Protection insurance. Mortgage Protection insurance is an insurance you can purchase on your own to cover mortgage payments when you have lost your income due to illness, change of employment and job loss.

    Maximum Coverage 

    In order to be covered, the maximum purchase price of the Home value must be below $1,000,000. It also means if you are buying a house over a million dollars, you must come up with at least 20% downpayment.

    Premium Calculation

    The insurance premium is calculated based on the percentage of downpayment you have:

    Downpayment Premium Rate

    • Less than 10% = 4%
    • 10-14% = 3.10%
    • 15-20% = 2.80%

    Example:

    • Home value: $500,000
    • 10% down payment: $50,000
    • Mortgage amount required: $450,000
    • Mortgage Insurance Premium = $450,000 x 4% = $18,000

    Does it matter where my down payment comes from? 

    When a lender considers your mortgage application, they will need to know where your down payment is coming from. The lender needs to make sure that:

    • You can not borrow money to come up with the down payment

    Most lenders will not accept borrowed money as it implies you are financially unfit to own a house unless you are a first-time Home buyer. If you are a first-time Home buyer, you have the option of "borrowing" up to $25,000 from your own RRSP. 

    • The money comes from an account that belongs to you.

    All lenders will require bank statements from your account that proves the money is yours.

    • You have enough money to close the purchase.

    There are a lot of hidden costs that Home buyers may not expect when they make their Home purchase decision.

    • The down payment may be gifted by a family member or a legal guardian.

    This is a valid option that requires the lender to see a letter from them stating that this money is a gift and you have no obligation to return the money.

  • How should I plan for my mortgage renewal? 

    Some people do not realize their mortgage has a lot to do with their current and future financial plan. Before you engage yourself into another long mortgage term, HomeHow recommends that you think about the following factors:

    1. How do you feel about your job situation in the next few years?

    Are you planning to:

    • Change jobs?
    • Relocate?
    • Change up your employment entirely? 

    2. Do you think you will receive a lump sum of cash within the next few years, such as:

    • Profits from investments?
    • Inheritances?

    3. Do you think you will need access to more money in order to: 

    • Plan a home renovation?
    • Attend school?
    • Invest in a business?
    • Increase your investment portfolio?

    4. Do you have plans to change where you live? Are you considering: 

    • A bigger house?
    • Downsizing?
    • Relocating to another province or country?
  • I have received a mortgage renewal notice from my bank. What do I do next? 

    In most cases, your bank sends you a mortgage renewal 60-90 days before your current mortgage term is due. Now, what do you do?

    Do not rush to sign!

    When your bank asks for your mortgage renewal, they won't spend time listening to your needs. You will not be given a chance to receive a mortgage that fulfills your current and future needs. Signing your mortgage renewal letter only takes 5 seconds, but this 5-second decision can cost you a lot!

    Don't just compare mortgage rates

    You will find your new renewal rates inside of your renewal offer. The next thing you may do is go online and see if you have a good renewal rate. This is certainly the right thing to do however not every rate you see online represents the mortgage product that fits your needs.

    If you're mortgage renewal is not what you expected and you're looking for a change. Reach out to HomeHow and we can look at your situation and find a solution that is best suited for you.

  • What is the difference between a fixed rate, a variable rate and an adjustable rate mortgage? 

    When you are looking for a mortgage, you may come across different mortgage products such as a fixed rate mortgage, a variable rate mortgage and an adjustable rate mortgage. In a nut shell, here are the differences.

     

      Fixed Rate Variable Rate Adjustable Rate
    Mortgage Rate

    Remains the same throughout your mortgage term.

    Fluctuates along with the Canada/Lender’s Prime Rate changes.

    Fluctuates along with the Canada/Lender’s Prime Rate changes.

    Availability 

    Usually available in 1, 2, 3, 4, 5 and 10 year mortgage terms.

    Usually available in 3 or 5 year mortgage terms.

    Usually available in 3 or 5 year mortgage terms.

    Mortgage Rate Quote

    3-year fixed: 3.35%

    5-year fixed: 3.30%

    Prime Rate + 0.75%

    Prime Rate – 0.50%

    Prime Rate + 0.75%

    Prime Rate – 0.50%

    Interest Cost

    Predictable – Total interest cost during the mortgage term is evaluated based on the mortgage rate you have signed up for.

    Unpredictable –Your mortgage rate will change along with the Bank of Canada/Lender’s Prime Rate change.

    Unpredictable  –Your mortgage rate will change along with the Bank of Canada/Lender’s Prime Rate change.

    Mortgage Payment

    Predictable –You will make the same mortgage payment throughout your entire mortgage term.

    Predictable – You will make the same mortgage payment throughout your entire mortgage term.

    Unpredictable –You expect to make a lower payment in an interest rate drop environment, and vice versa.

    Length of Mortgage Life (Amortization)

    Remains the same until replaced by a new mortgage.

    In an interest rate drop environment, your mortgage can be paid up faster as more of your mortgage payment will go towards the principal pay-down. It will be opposite if the prime rate keeps going up.

    Remains the same until replaced by a new mortgage. However you can take advantage of lower mortgage rates.