Frequently Asked Questions

Who does PAVAO Mortgages work for?

PAVAO Mortgages works for you: we are not employed by any lender. PAVAO Mortgages will get you the best rate and product that suits your needs at no cost to you. The lender that funds your mortgage will pay us a finder's fee, meaning our service is free to you.

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Can I get a mortgage from my bank through PAVAO Mortgages?

Yes. PAVAO Mortgages uses over 30 lenders - including most major banks. Our lenders comprise credit unions, trust companies, mortgage backed securities lenders and banks. We will always recommend the lender with the best product and rate for your situation, but if you prefer to use your own bank we will negotiate a better rate on your behalf.

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What's the advantage of dealing with PAVAO Mortgages instead of my bank?

PAVAO Mortgages will give you access to every mortgage product on the market and better mortgage rates. Every banker may tell you that their products and rates are the best but how would you know without shopping?

PAVAO Mortgages is independent, we work for our clients and our job is to sort through the many different lenders and their products, understand them and make recommendations tailored to your situation.

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How much can I qualify for?

Banks allow you to use 32% of your monthly income to go towards mortgage payments, or 40% of your monthly income to go towards both mortgage payments and other debt payments (car payments, credit cards, etc.). If your credit is really strong some lenders will allow us to use up to 44% of your income to qualify. To get an actual figure of what you can afford to pay for a home, please call PAVAO Mortgages for a free no obligation consultation.

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Can I refinance my mortgage to renovate my property or pay off my credit cards?

Yes! PAVAO Mortgages will review your situation and make a recommendation based on your situation. Mortgages can be refinanced for home renovations, to consolidate debt, or even so that you can use your home's equity for another investment.

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Do I need to get an appraisal on the property I wish to mortgage?

The requirement of an appraisal is a condition for most mortgages that have a down payment of 20% or more. The reason is the lender wants to see that the property you are purchasing is a quality property and that you are paying a fair market price. An appraisal usually costs between $200 and $350 - however, when you work with PAVAO Mortgages we cover the cost.

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What are the typical pre-payment options?

All lenders have different pre-payment privileges. They range from increasing your monthly payments by 15% - 25%, paying a lump sum of 15% - 25% on your principal per year or (in some cases) "doubling up" your mortgage payments.

The benefit of the pre-payments is that anything you pay over and above your monthly payment goes directly towards principal and you will pay off your mortgage sooner with less interest.

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Does paying my mortgage weekly or bi-weekly really save more money than paying it monthly?

Let's review the following example:

$100,000 mortgage at a 5 year term of 5.50% amortized over 25 years.
  Payment Balance
Accelerated Weekly $152 $85,609
Accelerated Bi-weekly $305 $85,633
Monthly $610 $89,198

You can see from the example that over a 5 year term accelerated weekly payments will save you $3589.00. Accelerated bi-weekly payments will save you $3565.00 compared to the monthly payment.

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Can I keep my mortgage if I sell my home and buy another property?

Lenders call this a "portable mortgage" and most lenders will give you the option to port your mortgage with you on your new home - but not all lenders have this program. PAVAO Mortgages knows that things change so we prefer to work with lenders that offer portable mortgages. Some situations require a lender that will not give you this option, and PAVAO Mortgages is careful to educate you upfront on the consequences in this circumstance.

Lenders usually require that you port a mortgage to the new home within 60 days of giving up possession of your old home.

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What is an assumable mortgage?

For an assumable mortgage, the bank allows the individual purchasing your home to take over your mortgage. There was a time when the buyer could assume a mortgage without qualifying, but lenders are making it difficult as it increases their risk. We highly recommend you speak to us first before you allow someone to assume your mortgage.

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What is Notice of Assessment and why does a lender request it?

A notice of assessment is a form that the Canada Revenue Agency sends to you as a summary of your Tax Return. It will either contain a refund cheque or a bill for your outstanding tax return.

The reason lenders request it is either to confirm your income (shown on line 150 of your return) or to confirm you have no outstanding taxes. Notices of assessment are usually only required for self employed clients and clients that receive bonuses as part of their pay.

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What is a T1 General?

A T1 general is the documented that's completed by whoever (an accountant, yourself, H&R Block) completes your tax return for submission to the Canada Revenue Agency. This document is usually requested for self employed clients and clients that receive bonuses as part of their pay.

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