Category: First Time Home Buyers

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $35,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.

What is the Home Buyers’ Plan (HBP)?

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.

Qualifying home – a qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

Related persons – are not considered to be dealing with each other at arm’s length. Related persons include individuals connected by a blood relationship, marriage, common-law partnership, or adoption (legal or in fact). A corporation and another person, or two corporations, may also be related persons.

Person with disability – you are considered a person with a disability if you are entitled to the disability amount. For purposes of the HBP, a person with a disability includes you or a person related to you by blood, marriage, common-law partnership or adoption. A related person with a disability does not have to reside with you in the same home.

Review the Home Buyers’ Plan CMHC Webpage for more information.

Here for you – Call or text Maxium today at 437-353-9977 or email at info@maxiumdsouza.ca to speak about your situation.

Source: CMHC

For many Canadians, purchasing a home is the biggest and most impactful decision they will have to make in their lifetime. While trying to find the perfect home can be challenging, there are steps you can take to ease some of the pressures. Getting pre-approved for a mortgage can be a very beneficial first step in your home search. A pre-approval gives you an understanding of the types of homes you can comfortably afford so you can narrow down your house search and find your dream home more efficiently.

While getting a mortgage pre-approval can help you feel prepared for your property purchase, it can easily become a false sense of security as your closing date approaches. It is important to remember that it does not guarantee you will actually be approved for the quoted mortgage financing. Typically, you can get pre-approved 90 days to 120 days prior to the closing date on you home purchase. If nothing has significantly changed with your income or your financial standing in that time, you should have no problem having the mortgage funded in time for your closing. However, if you have undergone an unexpected job loss, a sudden debt accruement, or any other major life change, then your mortgage financing may be jeopardized and canceled by the bank at the very last minute.

In order to help you stay prepared and ensure your pre-approval doesn’t fall through, Maxium has compiled a list of the 5 biggest reasons why a mortgage is denied after pre-approval. Otherwise you might be looking for an emergency mortgage loan at the very last minute.

Changes in Employment

Mortgages can commonly be denied because of an employment change. Although it entirely depends on the type of loan you are getting pre-approved for, most lenders will not be able to guarantee that you will receive your mortgage financing if you switch jobs. Many mortgages actually require the borrower to have at least two years of consistent income and a stable employment history in order to qualify.

While most job changes are frowned upon during your home purchase process, there are some exceptions to the rule. If you are switching employers but keeping the same career and similar or greater income level, you might not be endangering your mortgage pre-approval. For example, if you are working in software development and decide to transition to a different company for a higher pay, your mortgage approval will likely not be impacted.

If you do have the option to hold off on your career transition, it is always safest to wait until you have signed both your ownership agreement and mortgage contract before making any changes. However, regardless of the career change or job transition you are considering, you should always talk to your mortgage broker first. A mortgage broker will be able to give you the most sound advice on whether it is in your best interest to get a new job once your mortgage funding has been released.

Negative Impacts to Credit Score

While your credit doesn’t need to be perfect to qualify for a mortgage, big changes to your credit score can jeopardize your mortgage pre-approval. Every lender has a varying criteria for the credit scores they want to see in their borrowers. If your credit score drops suddenly, the lender that pre-approved you might not be willing to sign off on a mortgage and your deal could fall through. Thus, it is very important that each borrower knows their credit score following their pre-approval and understands how credit can be negatively impacted in a short time.

Even if you can still get approved for a mortgage with your new lower credit score, you might have to settle for a higher mortgage rate, which is less than ideal. In order to avoid any potential disappointments, it is best to continue to make your debt payments on time and not do anything that can drastically affect your credit in the 4 months leading up to your mortgage finalization. If you are worried about your credit, read this article containing tips on how to improve your credit score.

New and Unexpected Debt

Another common reason for lenders to deny a mortgage following a pre-approval is because the borrower has procured a higher level of debt. In the time before you finalize your mortgage and home purchase, you should refrain from taking on any more debt than you currently have. Even a small increase in debt or a new line of credit could put your mortgage pre-approval in danger. An increase to your debt, no matter how insignificant, can alter your debt-to-income ratio and result in your mortgage being denied.

Before you rack up your credit card or take out a new loan, it is recommended that you speak to your mortgage broker about the decision. A good mortgage broker will almost always advise you to wait until your paperwork is signed before you make any sudden financial movements.

Lender Guideline Changes or New Requirements

It is important to remember that even when a borrower has already been pre-approved by their lender, they are not exempt from any new guidelines or requirements that the government or individual lenders implement. If a lender changes their minimum credit requirement from 600 to 620, borrowers with a lower credit score will lose their mortgage pre-approval. Although this may sound frustrating, a good mortgage broker will likely be able to get you approved with another lender whose restrictions are slightly different.

Other changes to lender requirements or qualification guidelines that could cause your mortgage to be denied after pre-approval are debt to income guideline changes and variations to the amount of savings expected of a buyer.

The Appraisal Comes in Too Low

If you are purchasing a home straight from the builder, than in most cases you won’t need to have the home appraised, and the banks will provide you with a mortgage loan based on the purchase price that you are paying for it. If you are buying a pre-existing or pre-lived in home, then almost always the mortgage lender will require an appraisal that is conducted by an accredited appraiser of the lender’s choice.

A good mortgage broker will help ensure that the appraisal for your home is ordered on time and from the right appraisal company in order to help you maximize your chances of having a smooth and easy time with your mortgage financing.

Unforeseen external situations like this demonstrate why borrowers should always work with a mortgage broker and industry expert who can help them navigate such unexpected circumstances.

Tips To Ensure Your Mortgage Doesn’t Get Denied After it Already Gets Approved or Pre-Approved

A common question that is asked by borrowers is how they can ensure their mortgage doesn’t get denied following their pre-approval. It may seem silly, but the best answer is to keep doing exactly what you were doing before you pre-approval. Since you already got approved for a mortgage, all you need to do is stay in the same financial standing as you did before your pre-approval. A mortgage pre-approval typically lasts for 120 days so your job as a borrower is to keep your finances steady until you purchase your home. Mortgage lenders and mortgage brokers will do everything in their power to see as many of their pre-approvals make it to closing, so you don’t have to work too hard.

Here are some additional tips for borrowers that want to make sure their mortgage will not get denied last minute:

Don’t make large deposits into your bank accounts within the last 90 to 120 days before your mortgage is due to close and fund without having proof as to where the money came from
Don’t withdraw large amounts of money from your bank accounts within that same period of time
Don’t take on other lines of credit, new credit cards, new car loans, or any other kinds of loans
Don’t accrue more debts by carrying a higher balance on your existing credit cards
Keep some money aside in the event that your closing expenses are more than originally estimated
Provide all requested documentation to the lender as quickly as possible early on in the mortgage application process. You can find a list of common documents that you may need to provide to your broker or lender in our Mortgage Document Checklist blog.

A mortgage denial is one of the biggest reasons real estate deals fall through and why so many borrowers turn to Maxium Dsouza for help with a quick closing last-minute mortgage. It can also be incredibly frustrating for an already approved borrower to have their mortgage stripped from them at the very last minute, because in can mean that they can lose the property and deposit.

Even if you have just been pre-approved from your bank and haven’t yet started looking for a house or a mortgage, working with a mortgage broker is in your best interest. Maxium will make sure you are aware of how a mortgage can be denied and that you are well prepared and setup for a successful mortgage transaction, so that you never have to worry about losing out on your dream home!

Maxium is a experienced and knowledgeable mortgage broker and will help you stay informed on the best way to avoid potential situations that could lead to a mortgage denial. He will be able to give you specialized advice on how to deal with the unforeseen circumstances that could jeopardize your future home.

Call or text Maxium today at 437-353-9977 or email us at

Buying a home is always a big decision, but when you’re a first-time buyer it’s even more important to get it right. Without home-buying experience to draw on, it’s easy to make mistakes you could regret for years to come. Here’s what to avoid

1) Don’t Rush the Mortgage

In the excitement of buying your first home, it can be tempting to sign up for the first mortgage offer you’re approved for. Being too hasty is a serious mistake which can cause difficulties for a long time to come.

It’s a good idea to speak to an impartial mortgage adviser before committing yourself to any deal, but in any case, always bear some simple points in mind.

– Be very cautious about how much you try to borrow, making sure you leave plenty of headroom in your budget. Owning your own home has many extra costs compared to renting, and you need to leave yourself some breathing space to handle them.

– Explore your down payment options. The larger the down payment you can afford, the lower your monthly payments will be. Could it be worth waiting a couple of years to save up a bigger deposit? However, don’t break the bank to increase your down payment, as you’ll need to keep some cash in reserve as an emergency fund.

2) Get a Pre-Approval

But whichever mortgage you wind up getting, set the process in motion with a pre-approval before actually searching for a home. Doing this has several advantages,

– It lets you know exactly which price range you can search in, so you don’t waste time viewing homes which are over your budget.

– It puts you in a stronger position to drive a bargain, as the buyer knows you can access the funds to complete the purchase.

– Seeking a pre-approval will give you an early warning about any credit rating problems or other delays which could slow things down. You don’t want to see your dream home slip through your grasp because of unnecessary delays.

3) Hire a Buyer’s Agent

Most sellers will have a real estate agent to handle their side of the transaction, but it’s less common for a buyer to hire their own agent. However, there are several good reasons why you should consider doing so.

– Having an expert fighting in your corner means you’re much more likely to pay a realistic price.

– You’ll have a better chance of spotting problems with a home before you’re committed to a purchase.

– A buyer’s agent also speeds up the purchase by smoothing out glitches and making sure you’re fully prepared at every stage.

– A good agent’s experience and contact list mean you can find the right property more quickly.

4) Arrange a Full Home Inspection

Before proceeding with a purchase, hire the services of a reputable home inspector. A good inspector will make sure no nasty surprises are waiting for you with the property’s heating system, plumbing, roof, or general structure.

5) Be Careful During Closing

Lastly, once the buying process is underway, avoid making any changes to your financial situation. Don’t switch jobs, take out new credit, or spend large amounts of money.

Anything which changes your credit status, even just by a small amount, could introduce delays or even kill off the sale altogether. Be patient until you finally have the keys to your new home in your hand.

There are plenty of pitfalls lying in wait for the first time buyer. However, if you take your time and learn from others’ mistakes, you’ll soon be happily moving into your new home.

Taking out your first mortgage presents a major financial commitment, possibly the biggest one you’ll ever make, so it’s crucial that you get the best deal available. Getting a mortgage is often not a quick and straightforward process either, particularly since the options available to you will vary depending on factors such as your income, credit score and any past or current borrowings you might have.

#1. Save Up a Large Deposit

In almost all cases, you’ll need to have a substantial deposit to pay towards the home you want to buy. Fortunately, those with higher deposits will be able to take advantage of better interest rates and a wider range of borrowing options.

#2. Choose the Right Mortgage Type

There is a broad range of mortgage options available, particularly to those with larger deposits and excellent credit ratings. Most importantly, you’ll be choosing between a fixed- and variable-rate package. Fixed-rate mortgages lock you into a specific interest rate for a period of up to five years, making them the best choice during periods of low interest rates across the board.

#3. Understand the Extra Costs

When determining how much you need to borrow, you’ll need to factor in the additional costs involved, most of which are unavoidable. Additional costs may include home inspections and real estate fees.

#4. Don’t Borrow Too Much

It can make sense to borrow as much as you can if interest rates are at an all-time low, but only if you have something to invest the money in. After all, there’s no point in having your borrowed money sitting in the bank while you’re paying interest on it. If the home you’re interested in buying needs a substantial amount of work done on it, make sure you get some estimates to find out how much you need to borrow.

#5. Check Your Credit Score

Your credit score determines your borrowing power, and this is one of the first things that potential lenders will examine when considering your application. You can check your credit score online for free using agencies like Equifax or Experian. If you have a bad or neutral credit score, your borrowing options will be fewer or even none at all, so it makes sense to work on improving it before buying a home.

#6. Don’t Change Jobs

Potential lenders are likely to be turned off by applicants who have recently changed jobs, so it’s wise to apply for a mortgage only once you’ve been in the same job for at least six months. If you’re unemployed or still on a probationary period in your job, many lenders will not accept your application unless you have an excellent financial record. Once you have your application accepted, you’re free to do what you want.

#7. Eliminate Debts

If you have any existing debts, they may reflect badly on your credit score, in turn making it more difficult to get a good mortgage deal. You may also find yourself in a situation later where your debts have reached such a level that you can no longer afford your monthly mortgage payments. As such, you should always make certain your financial situation is stable and debt-free before making an application.

#8. Provide Proof of Income

All mortgage lenders require applicants to present proof of income so they can decide whether or not the client is able to make the monthly payments. Your monthly pay stubs should provide all of the information you need. If you’re self-employed, things can get more complicated, particularly if you haven’t been self-employed for a long time.

#9. Overpay When Possible

When choosing a mortgage deal, it is essential not only that you can afford the monthly payments, but also that you will have plenty left over. Since a mortgage is typically a very long-term commitment, you should try to overpay as much as comfortably possible, in order to eliminate the debt earlier on. Paying your mortgage off sooner will look better on your credit score and improve your long-term finances.

#10. Contact a Mortgage Broker

A Mortgage Broker’s primary expertise is locating funding for mortgage financing. They know where the best rates can be found. What’s more, they have the knowledge required to present a proposal for financing to lenders in the best way possible to successfully obtain mortgage financing.

Final Words

Although you should dedicate plenty of time to researching the best deal, it is important to remember that you’re not locked in for the entire duration of the mortgage. You can always remortgage your home later on with a more attractive deal should the opportunity arise. There will be charges involved in transferring your mortgage debt, but the long-term savings can be substantial.