Q: What are the basic requirements to qualify for a mortgage in London, Ontario?
A: To qualify for a mortgage in London, ON, lenders typically look at your credit score, income stability, and your Gross and Total Debt Service ratios (GDS/TDS). Unlike the U.S. system, Canadian lenders also require you to pass the federal “Stress Test,” which proves you can afford payments even if interest rates rise. We can help you review these numbers before you start house hunting in neighborhoods like Old South or Hyde Park.
Q: How much down payment do I need for a home loan?
A: In Canada, the minimum down payment depends on the purchase price. For homes under $500,000, you need 5% down. For homes between $500,000 and $999,999 (common for detached homes in London), you need 5% on the first $500k and 10% on the remainder. If you have less than 20% down, you will need mortgage default insurance (CMHC/Sagen). “Zero down” options are generally not available from major Canadian banks.
Q: What is the difference between a fixed-rate and a variable-rate mortgage?
A: A fixed-rate mortgage locks in your interest rate and monthly payment for your entire term (usually 3 to 5 years), offering total stability. A variable-rate mortgage often starts with a lower rate, but your interest costs (and sometimes your payments) fluctuate based on the Bank of Canada’s Prime Rate. We can help you decide which strategy fits your risk tolerance and financial goals.
Q: How does my credit score affect my mortgage approval?
A: Your credit score determines whether you qualify with a “Prime” lender (like a major bank) or an “Alternative” lender. generally, a score of 680+ gets you the best rates in Canada. If your score is lower (600-680), you can still get approved, but you may be subject to stricter income rules. As a local London mortgage broker, we have access to lenders who specialize in helping clients with bruised credit.
Q: What are the closing costs, and how much should I expect to pay in Ontario?
A: You should budget between 1.5% and 4% of the purchase price for closing costs. In London, Ontario, the largest cost is usually the Provincial Land Transfer Tax (LTT). Other fees include lawyer fees, title insurance, and appraisal fees. The good news? If you are a first-time homebuyer, you may be eligible for an LTT rebate of up to $4,000 to help lower your upfront costs.
Q: I’m self-employed and write off a lot of expenses. Will that hurt my chances of getting a mortgage?
A: Not at all! We know that as a business owner, your goal is often to show less income on your taxes to save money. The good news is, we don’t just look at your tax return. We have access to lenders who look at your real business cash flow instead. This means we can often get you approved based on the money your business actually makes, not just what you declare personally.
Q: I want to buy a bigger rental property (5+ units). Is that harder to finance than a regular house?
A: It’s a bit different, but often easier in one key way: the building helps you qualify! When you buy a larger commercial or multi-unit property, lenders focus less on your personal income and more on the property’s income. As long as the rents cover the mortgage and expenses comfortably, we can usually find a lender who wants to fund the deal.
Q: Can I buy a property under my corporation or holding company instead of my own name?
A: Yes, you definitely can, and many investors do this for tax reasons or liability protection. We can set up the mortgage so your company holds the title. Just keep in mind that lenders will usually still ask you to sign a “personal guarantee”—basically a promise that you’re backing the loan—but the asset sits safely inside your corporation.
Q: How much money do I actually need to put down for an investment property?
A: Here is the simple rule of thumb:
- If you live in one of the units: You can put down as little as 5-10%. (This is a great trick for getting started!)
- If you rent out the whole building: You generally need 20% down. We can look at your savings and help you decide which route makes the most sense for your wallet.
Q: I found a “fixer-upper” I want to flip quickly. Can you help with that?
A: Absolutely. Big banks often say “no” to properties that need a lot of work or short-term loans. That’s where we step in with Private Lending. These loans are designed for speed. We can get you the cash fast to buy the property and fund the renovations. Once the work is done and you sell (or refinance), you pay off the loan. It’s the perfect tool for house flippers.