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How much of a mortgage loan can I qualify for?
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A Mortgage Specialist can help structure a mortgage to fit your budget. Depending on your current situation a mortgage of around four times your annual earnings can be obtained.
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What if I have had credit problems?
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Credit problems can affect your ability to get a mortgage, Working with a Mortgage Lender can help to evaluate any problems and help to get you pre-approved. You will need to explain the circumstances. If you have overcome the problem and kept up with your obligations on a timely basis for a year or more, most lenders will accept your mortgage application.
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What is "mortgage insurance"?
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Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protects lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment.
To obtain mortgage loan insurance, the premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.
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What mortgage should I choose?
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That depends on your current situation and your tolerance for risk. Choose a reputable lender and get the advice of a Mortgage Specialist. They can discuss what is important to you and help you decide on the term amortization and payment schedule that is right for you.
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What is the difference between fixed rate mortgages and adjustable rate mortgages?
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The differences are that fixed rate mortgages are offered with an interest rate that remains unchanged for the term of the loan. Variable interest rate mortgages, sometimes referred to as VIRMs and also called adjustable rate mortgages, have rates that can fluctuate during the term in relation to Prime Interest Rate
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What is a "convertible mortgage"?
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This is a mortgage that allows a borrower to convert from an adjustable rate to a fixed rate during specified time periods. An additional fee usually applies.
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When do variable interest rates fluctuate?
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Variable rates are based on the Bank prime rate which can fluctuate at several points throughout the year. Such changes typically occur around Bank of Canada changes to the "overnight lending rate" commonly referred to as Bank of Canada Prime Rate.
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What is "amortization"?
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Amortization is the division of principal and total interest charges into equal payments that will result in the complete payment of the debt by the end of a fixed period of time.
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What are "Cashback Mortgages"?
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Cash back mortgages give "cash back to you" at mortgage closing. This can be a great strategy to pay off other debts or afford some renovations when purchase a new home. The rate is usually based on a banks posted rates without discount.
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What does "APR" stand for?
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This stands for Annual Percentage Rate and reflects the annual cost of the mortgage, taking into account interest rate and other credit costs. The APR can be used to compare the annual cost of different types of mortgages.
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What is a "rate buy-down"?
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A "buy-down" occurs when a lender lowers the interest rate on a mortgage -- for a fee -- for a certain period of the loan.
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What are "caps"?
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"Caps" are limits that are placed on the changes allowed in the interest rate and/or monthly payment on an adjustable rate mortgage.
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What is "locking-in"?
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"Locking-in" means that - - for a fee -- your lender will guarantee the interest rate on your mortgage for a limited period, regardless of fluctuations in market rates. If you are concerned that rates will go up between the time you apply and the time the loan closes, you should lock-in.
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What is "PITI"?
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It is simply "Principal, Interest, Taxes and Insurance" -- the components of your monthly mortgage payment.
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What is an appraisal?
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A professional estimate of the value of the property you intend to buy.
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What is closing?
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"Closing" is the date set when the buyer, seller and lender, or their agents, agree to legally transfer the property and all associated funds, or reference the property.
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What happens at closing?
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The buyer, seller and lender, or its agents, meet and legally transfer the property and all associated funds. A lawyer acts on the interests of the seller, another lawyer acts on the interests of the purchaser and ensures registration and execution of the mortgage and any related covenants are registered in favor of the lender. Settlement of all funds due and owing occur at this time.
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What is "possession date"?
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Possession date is the date which the purchaser is given poseesion of the property. Typically this occurs once title has been transferred from the vendor to the purchaser and the mortgage has been registered.
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What are "closing costs"?
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"Closing costs" are those costs that include the mortgage broker's fee, title insurance, appraisal and title search fees, insurance charges, survey fees and other charges associated with the legal transfer of the property. These costs typically amount to between 1.5 percent and 3 percent of the mortgage amount.
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How often do I make mortgage payments?
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This depends on the lender you choose as you may select from monthly, bi-weekly or weekly payments.
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What happens if I am late with a payment or miss a payment?
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Continued delinquency (late payment) or defaulting on mortgage (failing to make one or more payments) can lead to foreclosure, or judgment against you on the note for the amount owed. Most bank mortgages have some ability to defer monthly payment or portion thereof. If you have difficulty, talk to your bank.
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What if I want out of my mortgage?
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You may pay off the loan prior to the end of the term. Lenders have guaranteed you a rate for a certain period of time. They protect themselves from the cost of this guarantee by placing prepayment penalties in mortgage agreements. Mortgage brokers deal with many different lenders that may put costly penalties in their agreements. Bank Mortgages have gotten far easier to prepay and even payout entirely.
Make sure you understand how the penalty would be calculated before committing to a mortgage.
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