20 Aug

What is a CMHC-Insured Mortgage in Canada

General

Posted by: Gavin Toor

Quick Overview

A CMHC-insured mortgage is a type of home loan in Canada that lets you buy with as little as 5% down. Backed by the Canada Mortgage and Housing Corporation, it protects lenders against default, which often means better mortgage rates for buyers. While it helps first-time buyers enter the market sooner, it comes with strict qualification rules and added insurance premiums.

For many first-time home buyers in Canada, one of the biggest hurdles to owning a home is saving up the down payment. If you’re buying a property with less than 20% down, you’ll likely need a CMHC-insured mortgage. This type of mortgage allows you to purchase with as little as 5% down — but it also comes with strict qualification rules and added insurance costs.

In this article, we’ll break down what a CMHC-insured mortgage is, the pros and cons, and how to know if it’s the right choice for your home purchase.

What is a CMHC-Insured Mortgage?

CMHC stands for the Canada Mortgage and Housing Corporation, one of three national mortgage insurers (alongside Sagen and Canada Guaranty). Mortgage insurance protects the lender if you default on your loan.

Because the lender takes less risk, they’re often willing to offer better mortgage rates. For first-time buyers who don’t yet have a large down payment saved, this can make homeownership much more accessible.

👉 If you’re brand new to the process, I recommend checking out my guide: First-Time Home Buyer Guide: Step-by-Step to Owning Your First Home. It walks you through the full buying journey and pairs well with understanding how CMHC fits into the picture.

Benefits of a CMHC-Insured Mortgage

✅ Lower Down Payments

  • Buy a home with as little as 5% down on the first $500,000, and 10% on the portion between $500,000–$999,999.

  • This makes entering the housing market more realistic for new buyers.

✅ Access to Competitive Rates

  • Since lenders are protected, they often pass on lower interest rates compared to uninsured options.

✅ Get Into the Market Sooner

  • You don’t have to wait years to save 20%. Instead, you can start building equity right away.

✅ Widely Accepted

  • CMHC-backed mortgages are available through all major banks, credit unions, and alternative lenders in Canada.

Drawbacks of a CMHC-Insured Mortgage

❌ Strict Qualification Rules

  • CMHC uses tight debt service ratios: 39% Gross Debt Service (GDS) and 44% Total Debt Service (TDS).

  • This can make approval harder if you have variable income or existing debts.

❌ Mortgage Insurance Premiums

  • The CMHC insurance premium ranges from 2.8% to 4.0% of your mortgage amount, depending on your down payment.

  • The cost is rolled into your mortgage, increasing the total amount you’ll repay.

❌ Purchase Price Limit

  • Only available for homes under $1 million. Anything above requires a 20% down payment.

❌ Owner-Occupied Requirement

  • CMHC-insured mortgages are for owner-occupied properties only. Rental and investment properties don’t qualify.

Is a CMHC-Insured Mortgage Right for You?

For many first-time buyers in Canada, CMHC insurance is the tool that makes buying possible. It allows for a smaller down payment, often with more competitive rates.

However, the strict qualification rules and extra premium cost mean it’s not always the best choice for every buyer. That’s why it’s so important to prepare early.

One of the best steps you can take is to start planning well before your completion date. My post on The 90-Day Pre-Completion Mortgage Checklist explains exactly what to review in the months leading up to closing so you’re not caught off guard.

Final Thoughts

Buying your first home is exciting, but it comes with a learning curve. A CMHC-insured mortgage can be a powerful option if you don’t have 20% down, but understanding the pros and cons is key to making the right decision.

👉 As a licensed mortgage broker, I work with multiple banks and lenders to help first-time buyers find the right fit. If you’re considering a CMHC-insured mortgage, let’s talk about your options.

📞 Call me at 604-835-4999 or visit gavintoormortgages.com to get started.

20 Aug

How Self-Employed Borrowers Can Qualify for a Mortgage

General

Posted by: Gavin Toor

How Self-Employed Borrowers Can Qualify for a Mortgage

By Gavin Toor — Mortgage Broker, Volterra Capital Corp.

Why Getting a Mortgage is Different for Self-Employed Borrowers

If you’re a business owner, freelancer, contractor, or incorporated professional, qualifying for a mortgage can feel more complicated than it is for salaried employees.

While self-employment gives you freedom, it also means your income may not be as straightforward on paper — especially if you use legitimate tax deductions to reduce taxable income.
This can sometimes make it harder to meet traditional lender requirements.

The good news? There are special mortgage programs and alternative solutions designed just for self-employed Canadians.

Common Challenges for Self-Employed Borrowers

  • Lower reported income due to tax write-offs.

  • Irregular income patterns throughout the year.

  • Shorter work history if your business is new.

  • Difficulty proving income with standard documents like T4s and pay stubs.

Mortgage Programs for Self-Employed Borrowers

1. Stated Income Programs

For borrowers who can’t fully verify income through traditional means, stated income mortgages allow you to declare your reasonable annual income based on your business’s performance and industry norms.

  • Lenders assess your stated income alongside your credit history, business stability, and down payment.

  • Often requires a larger down payment (typically 20%+).

2. Dividend Income Qualification

If you pay yourself through dividends instead of salary, some lenders will use this income to qualify you — especially if it’s consistent and supported by corporate financial statements.

  • Dividend income can be grossed-up for qualification purposes.

  • Ideal for incorporated business owners who retain earnings in their company.

3. Gross-Up and Add-Back Policies

Many lenders will “gross up” certain income types or “add back” legitimate business expenses to increase your qualifying income.
Examples include:

  • Vehicle expenses.

  • Home office deductions.

  • Capital cost allowances (CCA).

This can significantly improve your borrowing power.

4. Alternative & B-Lender Solutions

If you don’t fit the exact guidelines of a major bank, alternative lenders can be more flexible with documentation and income verification.

  • May accept bank statements as proof of income.

  • Shorter history of self-employment (as little as 6–12 months).

  • Slightly higher interest rates, but greater approval flexibility.

5. CMHC & Insured Self-Employed Programs

Both CMHC and Sagen offer insured mortgage options for self-employed borrowers who can provide a reasonable income declaration and meet credit requirements.

  • Allows down payments as low as 5% in some cases.

  • Good credit and strong business track record required.

Tips to Improve Mortgage Approval Chances

  1. Keep your business and personal finances separate — clear records make underwriting easier.

  2. File your taxes on time and keep at least 2 years of Notices of Assessment (NOAs).

  3. Maintain strong credit — aim for a score of 680+.

  4. Save for a larger down payment to access more lending options.

  5. Work with a mortgage broker who understands self-employed lending programs.

Why Work With a Mortgage Broker

As a mortgage broker, I work with self-employed clients to:

  • Access specialized self-employed programs like stated income, dividend income, and bank statement mortgages.

  • Compare options from major banks, credit unions, and alternative lenders.

  • Structure your file to highlight your true income and business stability.

📞 Let’s Talk About Your Mortgage Options
Whether you’re an incorporated professional, small business owner, or contractor, I can help you qualify for the mortgage you need — even if your income is unconventional.

Gavin Toor — Mortgage Broker, Volterra Capital Corp.
📱 604-835-4999 | ✉️ gavintoormortgages@gmail.com
🌐 gavintoormortgages.com

15 Aug

First-Time Home Buyer Guide: Step-by-Step to Owning Your First Home

Mortgage Tips

Posted by: Gavin Toor

First-Time Home Buyer Guide: Step-by-Step to Owning Your First Home in Surrey, Langley & Burnaby

By Gavin Toor — Mortgage Broker, Volterra Capital Corp.

Why First-Time Buyers Need a Step-by-Step Plan

Buying your first home in Surrey, Langley, or Burnaby is exciting — but it can also feel overwhelming. There are new terms to learn, financial requirements to meet, and multiple steps before you get the keys.

This guide walks you through exactly what to do as a first-time home buyer in BC, from your initial planning to move-in day, so you can avoid costly mistakes and feel confident every step of the way.

Step 1: Decide You’re Ready to Buy

Before starting your home search, ask yourself:

  • Can you commit to living in one place for 3–5 years?

  • Is your income stable and your debt manageable?

  • Do you have enough saved for a down payment and closing costs?

💡 Tip: Even if you’re not ready yet, talking to a mortgage broker early helps you create a timeline and savings plan.

Step 2: Understand How Much You Can Afford

Your home budget depends on three factors:

  1. Income — Annual gross income for employees or adjusted net income for self-employed buyers.

  2. Debts — Monthly obligations like car loans, credit cards, or student loans.

  3. Down Payment — At least 5% for homes under $500,000, with higher requirements for more expensive properties.

💡 Tip: Online affordability calculators are a starting point, but a full mortgage pre-approval from a broker is the most accurate way to know your limit.

Step 3: Save for Your Down Payment & Closing Costs

  • Minimum down payment in Canada:

    • 5% on the first $500,000 of the purchase price.

    • 10% on the portion between $500,000 and $1,000,000.

  • Closing costs: 1.5–4% of the purchase price for legal fees, property transfer tax, inspections, and moving costs.

💡 First-Time Buyer Programs:

  • First Home Savings Account (FHSA) — Save tax-free for your first home.

  • Home Buyers’ Plan (HBP) — Withdraw from your RRSP without tax penalty.

  • BC First-Time Home Buyers’ Program — Property transfer tax exemption for eligible buyers.

Step 4: Get Pre-Approved for a Mortgage

A pre-approval:

  • Confirms your budget.

  • Locks in your interest rate for 90–120 days.

  • Shows sellers you’re a serious buyer.

💡 Pro Tip: Get a full pre-approval (credit & income verified), not just a quick online rate quote.

Step 5: Work With a Local Realtor

Choose a realtor who knows the Surrey, Langley, or Burnaby market and has experience with first-time buyers. They will:

  • Help you find homes in your budget.

  • Guide you through the offer process.

  • Negotiate on your behalf.

Step 6: Make an Offer & Pay Your Deposit

When you find the right property:

  • Your realtor prepares the offer.

  • You can include conditions like financing and home inspection.

  • If accepted, you’ll pay a deposit (often 5% of the purchase price).

Step 7: Finalize Your Mortgage Approval

  • Provide updated documents to your broker.

  • The lender completes their final review.

  • A home appraisal may be required.

Step 8: Close on Your New Home

  • Meet with your lawyer or notary to sign legal documents.

  • Pay your closing costs.

  • Funds are transferred, and you receive your keys on completion day. 🎉

Step 9: Move In & Settle

  • Set up utilities, internet, and insurance.

  • Change your address.

  • Celebrate becoming a homeowner!

Why Work With Me for Your First Home

I help first-time buyers in Surrey, Langley, and Burnaby understand their options, avoid pitfalls, and secure competitive mortgage terms. My approach combines expert mortgage advice with a clear, step-by-step process so you can buy with confidence.

📞 Book Your Free First-Time Buyer Consultation
Gavin Toor — Mortgage Broker, Volterra Capital Corp.
📱 604-835-4999 | ✉️ gavintoormortgages@gmail.com
🌐 gavintoormortgages.com

12 Aug

The 90-Day Pre-Completion Mortgage Checklist

Mortgage Tips

Posted by: Gavin Toor

The 90-Day Pre-Completion Mortgage Checklist

How to Secure Your Mortgage Before Your Presale Condo or Townhouse Completes in Surrey, Langley, or Burnaby

What Is a Pre-Completion Mortgage and Why It Matters

If you purchased a presale condo or townhouse in Surrey, Langley, or Burnaby 1–3 years ago, your completion date might be approaching soon. This means you’ll need to secure a mortgage so you can take possession of your home.

A pre-completion mortgage is the financing you arrange in the months before your presale unit is ready. Many buyers mistakenly believe that because they were approved when they signed the contract, they’re automatically approved at completion. Unfortunately, lender rules, interest rates, and even your personal finances may have changed — and this can cause last-minute stress.

Starting your mortgage process 90 days before completion gives you:

  • More lender options

  • Time to get the best rate

  • A buffer in case your situation has changed

  • Peace of mind leading up to possession day

The 90-Day Pre-Completion Mortgage Timeline

Here’s exactly what to do in the three months before your presale completion to avoid costly delays or surprises.

90 Days Before Completion — Get Mortgage Ready

  • Contact your mortgage broker (I work with buyers across Surrey, Langley, Burnaby, and the Lower Mainland) to start your application and review your options.

  • Gather updated income documents — pay stubs, employment letter, and T4 slips for employees; tax returns and financial statements for self-employed buyers.

  • Confirm your down payment source — make sure funds are liquid and ready for transfer by completion day.

  • Check your credit score — avoid taking on new loans, credit cards, or financing big purchases like cars or furniture.

60 Days Before Completion — Secure Your Mortgage Approval

  • Review your rate options — consider locking in if rates are expected to rise before your completion date.

  • If self-employed, provide up-to-date year-to-date income statements.

  • Submit updated builder documents to your broker — including strata details, amendments, or final floor plans.

  • Arrange an appraisal if your lender requires it.

30 Days Before Completion — Finalize the Details

  • Sign your mortgage commitment with your lender.

  • Confirm closing costs — property transfer tax, legal fees, GST (if applicable), and adjustments.

  • Book your lawyer or notary appointment to sign the final documents.

  • Follow your broker’s final instructions to ensure funds are ready for transfer.

Common Mistakes to Avoid Before Presale Completion

These are the most common issues I see with buyers — and they can be deal breakers if not avoided:

  • Changing jobs or reducing work hours before completion.

  • Financing large purchases before mortgage funding.

  • Ignoring lender requests or sending documents late.

  • Letting your pre-approval expire without checking in with your broker.

Pro Tip: Rate Holds Aren’t Permanent

One of the biggest misconceptions about pre-completion mortgages is that once you lock in a rate, you’re stuck with it — even if rates drop. That’s not true. If market rates improve before completion, I can revisit your file and try to secure a better deal.

Why Work With a Mortgage Broker for Your Pre-Completion Mortgage

Not all lenders treat presale completions the same way. Some may require updated income verification closer to completion, while others have different timelines for appraisals or rate holds.

As a mortgage broker with strong relationships across major banks, credit unions, and alternative lenders, I can:

  • Find the right lender for your timeline and situation

  • Get a second or third approval in place if needed

  • Negotiate competitive rates

  • Help you navigate last-minute changes from the builder or lender

Serving Surrey, Langley, Burnaby & Beyond

I work with clients across the Lower Mainland, but I focus on markets like Surrey City Centre, Langley Willoughby, and Burnaby Metrotown/Brentwood, where many new developments are completing in 2025–2026.

Whether your completion is in 90 days or 6 months, starting early can save you money, stress, and potential financing issues.

Get Your Free 90-Day Pre-Completion Mortgage Plan

If your presale condo or townhouse is completing soon, don’t wait until the last minute. Let’s secure your financing now so you can enjoy your move-in day without worrying about your mortgage approval.

📞 Gavin Toor — Mortgage Broker, Volterra Capital Corp.
📱 604-835-4999 | ✉️ gavintoormortgages@gmail.com
🌐 gavintoormortgages.com