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Financial Questions
There are many options available to you when you finance your home. To make your decision a little easier we have answered some common financial questions for you.

If you do not find the answer to your question here, please feel free to contact us.

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  • What is a down payment?

    A down-payment is the amount of cash paid by a purchaser which, when added to the mortgage amount equals the sale price of the home.


  • How much money will I need for a down payment?

    Some lenders require as little as 5% down of the total value of house, lot & GST.

    The current average is 5% - 25% as a down payment -- Silver Crest Homes requires only 5% down in most cases. However, if you use a recognized mortgage lender, we can start construction of you new home with as little as a 3% down payment.


  • Do I have to put money down at the time I sign the contract?

    Yes. By putting a partial or complete down payment, you are showing the builder that you are a serious purchaser and you are helping fund the progress of your new home.


  • How much of a house can I actually afford?

    A new house is probably the most expensive purchase most of us make. However, if you take the time to break down the numbers, you will find out if you can actually afford a new home, within the budget of your family. A good rule of thumb is that you can afford to pay 3.2 times your gross monthly income towards a mortgage (plus property taxes) as long as your monthly expenditures are average.

    A simple visit to the "home mortgage calculator" will tell you how much you may qualify for. The only information you will need is your gross income, the cost of property taxes for the new home, and the down payment you are able to provide. A mortgage qualification may also depend upon other factors, such as your credit rating, the cost of utilities for the new home, any outstanding loans you may have, and of course, the current interest rate.

    Flexible financing options are available through our experienced financial counselors and even if you are unable to quality now - we can help you to prepare your credit for purchasing a new home. This is a free service we provide to assist potential purchasers.


  • What is the difference between being "pre-approved" and "pre-qualified"?

    To "pre-qualify" an approved lender, after discussions with a purchaser, can estimate approximately how much of a mortgage the purchaser can actually afford (this is not a guarantee, as the purchaser must then make a formal application for an actual approved mortgage).

    For a "pre-approval" the purchaser will complete a formal application with a credit and job history, being examined by the lender. This information provides the lender with information that will enable him to make a firm commitment as to the amount of the mortgage, the interest rate, terms, etc. Being "pre-approved" also shows the builder that you are a serious buyer with the financial means to purchase the home.


  • Is it a good idea to be "pre-qualified" for a mortgage prior to shopping for a house?

    Some people advise shopping for mortgages by comparing the total cost of the loan, with the insurance fees and mortgage rates as all of these factors and other points may vary from lender to lender. Your Silver Crest Homes counselor can put you in contact with experienced mortgage brokers who will shop the market for you and for your specific needs.


  • How can I actually "pre-qualify" for a mortgage?

    Just visit a Silver Crest Homes show-home near you, tour our current models and you will receive a personal pre-qualification with one of our representatives. If you can provide us with three current pay-stubs, and current bank statements, and have not had any serious credit problems, you can usually apply for a mortgage at the same time you sign your Purchase Contract with us.


  • What sources of income can I include on my application?

    The mortgage lender will need to ask you to supply information and history that he can verify. Most loan counselors need proof that you have been employed in a job for at least two years with a letter from you employer to verify this, a copy of your last three pay-stubs and if you are self-employed, a copy of your tax returns for the last two years. Our credit counselors will advise and help you with this.

    The following is a list of the sources of income that can be included to determine you and your spouse's income (if purchasing jointly)
    • Primary job income
    • Bonuses
    • Second - part-time job income
    • Dividends
    • Interest income
    • Rental Income (less expenses)
    • Alimony
    • Earnings from self-employment
    • Government pensions/Social Security (Sickness)
    • Tax exempt income
    • Commissions
    • Retained Earning in a company


  • My credit is not perfect. Will I still be able to qualify?

    The mortgage counselor will be able to determine this when you make a formal credit application. The approval also depends, on factors such as the amount of your down payment, your job stability, the amount of damage to your credit rating, how long ago was the damage done, and what are the reasons for the current credit rating.


  • Can I get a mortgage to buy a home if I've declared bankruptcy?

    First, you need to have re-established your credit rating and made all of your payments on time and a 2 year time period must have lapsed from the date of Discharge of Bankruptcy. Silver Crest Homes will then assist in arranging your mortgaging financing through one of their mortgage brokers.


  • What are my mortgage financing options?

    FIXED RATE MORTGAGE- this is the most common type of mortgage offered. The term of the mortgage, the interest rate and period of amortization are pre-determined. The advantage of this type of mortgage is that the interest rate remains the same for the term of the mortgage and your monthly payments will remain the same (at the end of the term, the mortgage interest rate will have to be re-negotiated).

    BI-WEEKLY MORTGAGE - this allows the purchaser to make payments on a bi-weekley basis as compared to a monthly payment only.

    VARIABLE RATE MORTGAGES - the interest rate is adjusted periodically based upon various economic indexes, such as the bank's prime lending rate. They typically start with a lower interest rate that allows the buyer to adjust the mortgage payment (certain conditions will apply) When the rates drop, your mortgage payment will drop as well. Most variable mortgages have a "rate cap" which limits the amount the interest rate can be increased annually.


  • What documents will my mortgage lender need from me?

    When preparing for your mortgage loan, a Silver Crest Homes counselor will ask you to provide the following documentation (every situation varies and therefore the requirements may change with your application).
    1) a copy of the signed Purchase Contract
    2) the addresses and telephone numbers of the borrower for the past two years.
    3) The employers names and addresses (for the past two years) and a letter from the employers' stating the wages earned and duration of employment.
    4) Current housing property details.
    5) If renting, the name and address of landlords (for the past 2 years) and the addresses of the rental residence/s for the past two years.
    6) If self-employed, the tax returns, and Notice of Assessments from Revenue Canada for the past two years. With this information, one of our financing counselors will help to arrange financing for you at the most competitive rate.


  • What information do I need to give the lender?

    Silver Crest Homes staff will give you a list of the information required on a loan application. Given each buyers individual situation, Silver Crest Homes Preferred Lenders offer a broad range of mortgage programs. With the help of our staff, we will make the application process simple and smooth for all home-buyers.


  • Are there any hidden costs?

    There are NO hidden costs. As with any home purchase, the balance of your down payment and the usual closing costs are due on the day of closing. Silver Crest Homes send the closing documents to your lawyer approximately 10 days prior to the closing date with a statement that itemizes any charges to be paid by the purchaser. This charges could include loan fees, mortgage insurance premiums, home insurance, and tax fees.


  • What is "Title Insurance" and do I really need it?

    Title Insurance protects both you and the mortgage lender against the possibility of any unknown liens or discrepancies regarding ownership of the property. This one time insurance fee is paid at the time of closing and the cost depends on the value of the home and the amount of the mortgage (this insurance is NOT to be confused with CMHC mortgage insurance).


  • What is CMHC (Canada Mortgages Housing Corporation)?

    This is a Crown Corporation that administers the National Housing Act on behalf of the federal government.


  • What is CMHC mortgage loan insurance?

    CMHC insures the mortgage loan for the lender. Should the buyer go into default, CMHC would take over the property as a foreclosure and reimburse the lender. CMHC charges insurance fees that are a percentage of the mortgage. If a 25% down-payment is applied to the purchase of the home, CMHC mortgage insurance is not needed.


  • My parents gave me the money to buy the house and helped with the down payment. Now my lender says I need a "gift letter" - what is that?

    Lenders will allow a certain amount of money to come from other sources other than personal bank accounts, savings, etc. (parents for example) however the lender needs assurance that this money is truly a gift that does not have to be paid back. A "gift letter" will confirm this.


  • Can I draw money from my Registered Retirement Savings Plan (RRSP) and use it as a down payment to purchase a house?

    According to Revenue Canada, first-time home-buyers can draw up to a maximum of $20,000.00 from their RRSP. This amount must be returned to their account and is interest free. Further information can be determined through a Silver Crest Homes counselor or through Revenue Canada.


  • What basic house insurance will I actually need?

    Most lenders require Homeowner's Insurance (or hazard insurance) Policy that will cover the cost to rebuild the house in case of loss of real estate by fire or natural causes. Contents of the house ie: furniture, clothes, jewelry and life insurance, are normally not included in this policy. We recommend you consult your insurance agent and/or the lender for further guidance.


  • Can I add extra features or options to my mortgage loan?

    Yes, you can. Extras such as appliances, legal fees, basement development, window coverings, etc., can be added to the mortgage loan amount, but only at the time of the signing of the Purchase Contract.


  • How much are property taxes?

    The tax rate varies from sub-division to sub-division and is dependent on the size and the value of the house and lot and the neighborhood amenities. Ask the Silver Crest Homes show home counselors for the specific tax details for your home.


  • I have a home to sell - when do I put it on the market?

    Our staff will suggest the appropriate timing for selling your home. We can also refer you to dependable, highly regarded realtors, who will help you to accomplish the sale you need and will help ease the move into your new home with as little stress as possible.


  • How do my current debts affect my ability to get a mortgage?

    The mortgage lender will consider the over all picture when making a decision to give a mortgage loan. Your debts are a very important part of your credit profile because not only will the lender review the amount of debt you are carrying, but will take into account if your payments on these debts have been made on a regular and timely basis. A Silver Crest Homes counselor can assess your current debt load whether your situation is good or bad, and will determine what you can or cannot afford.


  • How important is a job history to a lender?

    Most lenders look for steady employment (consistently employed for 2 years or more). However, considerations are given for any gaps in the employment history, providing there are reasonable explanations.


  • How do I pay the property taxes?

    If your mortgage payments include the property taxes, then the lender holds this amount in trust, and remits the taxes to the City on your behalf. However, if the mortgage company is not responsible for the property taxes, you, as the home-owner, are responsible to remit the payment on or before the due date as shown on the tax bill you will receive from the city on a yearly basis.


  • Must I have a monthly mortgage payment only?

    No, a monthly payments is usually set up by the lender to pay your principal loan, interest and taxes (if applicable) however, you can arrange to have weekly or bi-weekly payments automatically deducted from your bank account.


  • Why does my lender need a letter from my employer showing any bonuses I have received?

    Income - which includes not only your salary, but also any bonuses, interest or dividends paid to you - is crucial information needed by the lender during the mortgage approval process. It is to your advantage to show all income received.


  • What happens if my current home has not sold and it is time for me to move into my new home?

    You can apply for short-term mortgage financing, known as a "bridge loan". This will tide you over until your current home has sold. Usually the older home is used as the collateral for this short-term loan.


  • Will Silver Crest Homes offer a home guarantee program on our current home?

    Yes, we do offer a guarantee to trade your current home in case it has not sold during the construction process of your new home. Visit one of our show homes and a sales counselor can further explain - in detail.


  • Exactly what is a "Spec Home" or an "Early Delivery" home?

    A Spec Home offered for sale by a builder is a house that has either already been built or is in the process of construction in order to provide a purchaser an early possession date. (at Silver Crest Homes we refer to these houses as "Early Delivery Homes") There are times when a purchaser, due to circumstances such as an out of province job transfer or a quick sale on their current home, must find another home quickly. These "Early Delivery Homes" can fill this need for those particular purchasers.


  • What do I need to do if I am already working with a real estate agent or broker?

    Silver Crest Homes is happy to co-operate with all agents or brokers. If you decide to purchase one of our homes, we ask that your agent or broker accompany you to any of our show homes and register you as a purchaser with one of our sales consultants. Without this initial registration, your agent or broker will not be eligible for a sales commission.


  • What is a Final Walk-Thru?

    One of our company representatives will contact you to schedule the final inspection of your new home. Normally, this will take place 3 - 4 days before you take possession of the house and this is your chance to inspect the house thoroughly and make sure that it has been completed to the proper specifications. This also gives us the opportunity to explain the functions of various items in you new home.


  • What is a "Certificate of Possession": and why do we have to sign it?

    After you have completed the walk-thru, the Certificate of Possession is signed. This is to verify that you have fully inspected the house, and unless otherwise noted on the Certificate of Possession, the house has been completed to your satisfaction. (Mortgage loan companies require this signed certificate) This certificate is then sent to the National Home Warranty Program which insures that coverage, in your name, has been activated. Normally this is signed 3-4 days prior to your meeting with your lawyer and is not to be confused with the Certificate of Occupancy.


  • When do we meet with our attorney/lawyer?

    Approximately 10 days to a week before you take possession of your new home, your lawyer/attorney will contact you and explain the legal papers and answer any questions you may have. Your Mortgage Loan papers and the Closing Statements (papers pertaining to the purchase of your new home) will be reviewed by you. When you have reviewed and agreed with the paper work provided to you, you will then be asked to sign the legal papers and the actual purchase is then completed.