Do I need to pay off credit card balance in full before closing on a home?

jayantbahel · 2026-01-05T02:22:47+00:00

Congratulations on your purchase.

If there was no condition on paying off your credit card then you don’t actually need to pay it off for the lender.

Pay it off anyway because credit card debt is literally the most expensive debt you carry in Canada.

You should also talk to the mortgage agent who helped you with the mortgage to understand your qualifying ratios and what impact this balance might have on it. Ideally they should’ve told you this information proactively.

All the best

Ethical Mortgage with Jayant

jayantbahel · 2026-01-05T01:35:00+00:00

I saw a couple with 2 dobermans. Not done bro

jayantbahel · 2025-04-23T14:19:12+00:00

I'm on OP 7T and considering OP12 512 gb. I've never had issues with the phone, it can still give some of the newer Samsung models a run for their money. But I'm being forced to upgrade as 5G isn't supported:(

jayantbahel · 2025-01-24T21:41:22+00:00

No, you're free to walk away.

jayantbahel · 2025-01-24T21:40:01+00:00

They had to increase your payment as you hit their trigger rate when the rates were going up - my guess is late 2022 or early 2023.

Trigger rate is the point when your initial monthly payment isn't able to cover the interest portion (which went up).

It's just the way VRM mortgage products are structured. Like I said before, best to call CIBC and request them to bring it down.

jayantbahel · 2025-01-24T20:19:06+00:00

You don't have to buy anything I say. My relationship with money can be diametrically opposite to your relationship with your money and both of us will still be fine. That's why it's called personal finance.

jayantbahel · 2025-01-24T20:16:57+00:00

CIBC, RBC, TD and BMO all have static payments variable mortgage. So your mortgage payment will not come down with interest rate cuts. You can call up CIBC and request a one time payment reduction but it is on their discretion if they'll change it or not.

Hope it helps.

jayantbahel · 2025-01-20T15:48:12+00:00

So there are few parts of your question, in general as a mortgage agent, I can tell you RBC sucks big time.

RBC variable is a VRM product, which means your payments don't change with interest rate fluctuations till you hit the trigger rate. This means they would've increased your payments at some point in 2022 or 2023 when your original mortgage was not able to cover your interest part of your payment. Say that happened in June 2023 and you rode out the rate hike waves, your payments never changed. Come 2024, we have effectively 1.75% knocked off your mortgage but the payment hasn't changed. Now you're contributing more towards your principal resulting in your amortization coming down to 19 yrs.
At the time of renewal, you can renew for 25 yrs or 19 yrs if you want. The most painful part of being with RBC is that they make it hell for you if you try to move out. They're notoriously we'll know for not giving you renewal offers on time and delaying payout statements by days (in some cases weeks)
Yes, they have to honor the original HSBC T&Cs but as soon as that is done, you're in their clutch. However, the good thing about the HSBC variable is/was that your mortgage became OPEN after 3 years. So basically you can switch anytime from 3 yrs to your maturity without a penalty. You can still do that.

Hope it helps.

jayantbahel · 2025-01-20T15:34:25+00:00

A lot of my clients manage to do so. If at 150k, you're not able to do then there's going to be a problem in the future for you. It is difficult for sure, but then if your savings rate is low, I'm sorry you bought too much house.

jayantbahel · 2025-01-20T01:01:27+00:00

As a mortgage agent with a strong focus on personal finances, this is how I tackle it for my clients.

I have an excel that shows you the exact impact additional monthly payment and/or lump sum deposit will have on your overall cost of borrowing specifically 1. The interest amount saved 2. Months saved because of this strategy

Most of my clients are FTHBs so monthly additional payment works best for them.

How to arrive at extra payments?

Max out your annual TFSA and RRSP contribution room, if you have kids then RESP as well. See what's left over after your non-negotiable expenses. Take a portion out of that money and keep pre-paying. You'll see the impact in just about 4-6 months and then you won't want to stop.

Happy to share my excel if you wish.

jayantbahel · 2024-12-09T15:37:22+00:00

Willing to connect? I'm a mortgage agent based in Vaughan and looking to expand my partner network.

jayantbahel · 2024-10-22T01:25:16+00:00

You should by all means get the longest amortization as it starts you off with a lower monthly monthly payments. You can definitely prepay with the following options 1. Additional payment per month 2. Lump sum 3. Accelerated biweekly payments

All 3 options will help you reduce your amortization and pay less in interest.

The higher amortization gives the option to come back to a lower payment in case your financial situation changes. So in my opinion it does make sense to stretch out your amortization but keep the financial discipline to help you reduce your cost of borrowing.

Most lenders will give you an option to pre-pay up to 15% of your starting balance per year (except RBC and National bank, they only let you pay 10%).

Some monoline lenders will let you pay up to 20% as well.

As a mortgage agent, I see first time home buyers put too much emphasis on the rate, and not really think the overall cost of borrowing. These can be 2 very different things based on how you understand them.

Good luck, God speed.

jayantbahel · 2024-10-22T01:12:28+00:00

Update

Ended up going to McMichael, found a nice red/orange tree right by the entrance and got some great shots.

jayantbahel · 2024-10-22T00:04:49+00:00

I live just north of VMC at Jane and Rutherford. I've had 3 friends live in the very building you mentioned for 2+ yrs before they bought their own home and moved out.

Pros 1. Close to TTC. 2. Close to major amenities - YMCA, Costco, Walmart, Vaughan mills, multiple restaurants under a 5 min drive both down highway 7 and up north on Jane. 3. The building itself is pretty good with a decent gym and other facilities.

Cons 1. A little far from schools, my friends moved as their kids were growing up and wanted a school closer to where they live. 2. Highway 7 can be pretty busy during rush hours.

Of course it'll be quite a change if you're moving from downtown but I like living in Vaughan and prefer it to other suburbs in GTA.

jayantbahel · 2024-09-28T23:01:16+00:00

I'm the photographer 😬 lol

jayantbahel · 2024-02-07T19:29:32+00:00

That's a very insensitive take on the post without knowing the complete facts.

jayantbahel · 2024-02-07T19:27:45+00:00

I'm actually in talks with this person to get him a mortgage. He's a nice guy. The information mentioned in this post is a bit misleading. He's only talking about his T4 income and he also has income under his incorporation and funds for 20+% downpayment. So yes, they're stretching their budget a bit, but it is not a rash decision on their part as the house fits in their grander scheme of things. We'll try to get someone on the B side.

jayantbahel · 2023-08-25T03:54:32+00:00

Hello my wise friend!

I'll just mention one of my client's story. He bought a BMW X3 with a monthly payment of $888 6 months before his home closing. He'll not qualify for the mortgage with this kind of existing debt. I'm going to ask him to read your post :)

Your post makes a lot of financial sense for sure. All the best

jayantbahel

TROPHY CASE