Mini-Case E: (3.5 marks) Sandra and John are looking to make an offer on a condo on Sherbrooke Street for $425,500, close to Concordia where Sandra works. The closing is on October 30, 2021. They have saved the exact amount for a deposit to be a conventional mortgage. a) Calculate the down payment if they just meet the conventional mortgage limit. (.5 marks) Calculation: (.5 marks) Page 9 of 13 b) Sandra and John are going to the CIBC to discuss their mortgage. Based on the following information, calculate the Gross Debt Service (GDS) ratio. Sandra's gross annual salary is $110,120, while John's is $99,600. The property that they are looking to purchase would result in monthly heating costs of $566, condo fees of $3,010 per year, while their annual property taxes would be $5,436. Sandra's only debt is a car loan of $775 per month and while John's is a student loan of $200 per month. Calculate the GDS ratio using a monthly mortgage payment of $3,050. (1 mark) Calculation of the GDS ratio: (1 mark) c) Sandra and John forgot about the Property Transfer Duties (also called Welcome Tax) that they are required to pay. Using the link for Montreal properties, calculate the Property Transfer Duties https://montreal.ca/en/articles/how-property-transfer-duties-are-calculated-9279 (1 mark) Calculate the Property Transfer Duties: (1 mark) d) As Sandra and John just barely saved enough for a conventional mortgage down payment and forgot about the Property Transfer Duties, they are trying to re-work their numbers. They are curious to know how much it would cost in Default Mortgage Insurance if they only put 15% as a down payment. Calculate their mortgage default insurance using the table Default Mortgage Insurance rates using 15% as a down payment. (1 mark) Default Mortgage Insurance rates: Down Payment Size Premium Charged 5% 4.00%(for a traditional down payment) 4.50% (for a non-traditional down payment) 10% 3.10% 15% 2.80% 20% 2.40% 25% 1.70% 35% 0.60% Calculation of Mortgage Default Insurance: (1 mark) Mini-Case E: (3.5 marks) Sandra and John are looking to make an offer on a condo on Sherbrooke Street for $425,500, close to Concordia where Sandra works. The closing is on October 30, 2021. They have saved the exact amount for a deposit to be a conventional mortgage. a) Calculate the down payment if they just meet the conventional mortgage limit. (.5 marks) Calculation: (.5 marks) Page 9 of 13 b) Sandra and John are going to the CIBC to discuss their mortgage. Based on the following information, calculate the Gross Debt Service (GDS) ratio. Sandra's gross annual salary is $110,120, while John's is $99,600. The property that they are looking to purchase would result in monthly heating costs of $566, condo fees of $3,010 per year, while their annual property taxes would be $5,436. Sandra's only debt is a car loan of $775 per month and while John's is a student loan of $200 per month. Calculate the GDS ratio using a monthly mortgage payment of $3,050. (1 mark) Calculation of the GDS ratio: (1 mark) c) Sandra and John forgot about the Property Transfer Duties (also called Welcome Tax) that they are required to pay. Using the link for Montreal properties, calculate the Property Transfer Duties https://montreal.ca/en/articles/how-property-transfer-duties-are-calculated-9279 (1 mark) Calculate the Property Transfer Duties: (1 mark) d) As Sandra and John just barely saved enough for a conventional mortgage down payment and forgot about the Property Transfer Duties, they are trying to re-work their numbers. They are curious to know how much it would cost in Default Mortgage Insurance if they only put 15% as a down payment. Calculate their mortgage default insurance using the table Default Mortgage Insurance rates using 15% as a down payment. (1 mark) Default Mortgage Insurance rates: Down Payment Size Premium Charged 5% 4.00%(for a traditional down payment) 4.50% (for a non-traditional down payment) 10% 3.10% 15% 2.80% 20% 2.40% 25% 1.70% 35% 0.60% Calculation of Mortgage Default Insurance: (1 mark)
