| Import |
| com.greenpepper.samples.application.mortgage |
How to compute the total mortgage amount that is credited to an account when contracting a new mortgage.
Maximum financeable amount
The financed amount is the sale price minus the down payment. It is capped to 75% of the real estate market value. This means that a buyer cannot borrow more than 75% of the property.
| Rule for |
financeable amount |
| Market value |
Financing up to? |
| $200,000 |
$150,000 |
| $1,000,000 |
$750,000 |
Insurance premium (SCHL)
Whenever the down payment on the property is less than 25% of the sale price, the buyer has to pay a premium for insuring the mortgage. The premium fee amounts to 2.5% of the mortgage amount.
| Rule for |
insurance premium fee calculation |
| Sale price |
Down payment |
Premium fee? |
Financed amount? |
| $100,000 |
$15,000 |
$2,125.00 |
|
| $100,000 |
$30,000 |
$0.00 |
|
| $100,000 |
$25,000 |
$0.00 |
|
 |
The rest of the executable specifications have not been coded yet. |
Land Transfer tax
There's more to buying a home than just taking care of the loan. On a change of owner, the city charges a land transfer tax (commonly referred to as the welcome tax) to the new homeowner. The tax amount is 12$ per 1,000$ of the sale price.
| rule for |
land transfer tax calculation |
| sale price |
tax amount? |
| $100,000 |
$1,200 |
| $200,000 |
$2,400 |
| $200,999 |
$2,400 |
| $201,000 |
$2,520 |
Calculating total mortgage amount
The total mortgage amount is the sale price minus the down payment plus the insurance fee (if any).
The buyer can also decide to finance the notary tax and/or the change owner city tax. In such a case, the amount of those fees are added to the mortgage amount.
| rule for |
total mortgage amount calculation |
$200,000 |
$250,000 |
| down payment |
notary fees |
include land transfer tax |
mortgage amount? |
base mortgage? |
insurance premium? |
land transfer tax? |
| $100,000 |
|
no |
$102,400 |
|
|
|
| $25,000 |
$1200 |
yes |
$182,975 |
|
|
|
| $0 |
|
no |
refused |
|
|
|
