Tag Archives: Best Mortgage Rate

Making a Budget

Make a budget and find out the best ways to manage your mortgage money better

We recently took a look at the expenses beyond securing a low mortgage rate, the purchase price that you should anticipate to pay, and the expenses related to moving in. Now it is time to have a look at your ongoing month-to-month expenses, ways to pay off your Canadian mortgage faster, and the renewal process. This handy checklist will help keep you organized.

Budgeting for Home Expenses

Budgeting for home expenses calls for organization and some degree of restraint. Also, you will want to have funds reserved for unanticipated maintenance expenses.

Canadian dollars in a piggy bank studio cutout

Budget

Monthly expenses includes things like:

  • Property taxes
  • Maintenance and upkeep
  • Insurance
  • Mortgage payments
  • Heating and cooling
  • Hydro
  • Condo fees (if applicable)
  • Internet
  • Water
  • Cable
  • Telephone
  • Appliance rental (if applicable)

Budget Your Monthly Expenses

Beyond the expense of your monthly best mortgage rate, it is essential that you are aware of exactly what you are spending and where you are able to cut expenses. Budgeting can be time consuming and tedious! Making use of an online budgeting tool like Mint.com will help you save money and time as it automatically tracks your expenses and allocates them against your budget.

How Can I Save Money?

High Interest Savings Account
Make your savings work harder for you.

Save Money on Credit Cards
Altering your credit card can help save you money by providing you with a lower interest rate.

Paying off Your Mortgage Faster
Having your very own house is both thrilling and gratifying. Spend some time putting together a strategy to pay it off as quickly as possible. There’s no freedom like financial freedom.

 

Making an Offer

Improve the chances of having your offer accepted.

For Sale

Making an Offer

When you and your real estate agent locate what you think is the perfect home and Canadian mortgage rate, there’s no time to waste – it’s time to make an offer to purchase!

The Deposit

When you put an offer in to purchase a house, you are also expected to provide a deposit. The deposit assures the seller that you will actually go through with the sale when closing day arrives. Please note that the deposit and the down payment are not the same thing. A deposit may be as little as a few hundred dollars. It is important to note that, if your deal falls through, you may lose your deposit. Speak with your mortgage broker to get more information.

Chattels and Fixtures

Some sellers will entice buyers by offering them chattels or fixtures. Since it is not always clear what chattels and fixtures will stay, be sure to specifically list items that you’re unsure of. The last thing you want is an unpleasant surprise on closing day.

Closing Day

At this point, if your offer has been accepted, it’s time to close the deal. At closing, both parties must agree that all legal and financial obligations have been met. This includes any and all conditions that were written into the offer. If everyone agrees, ownership and possession will be transferred to you.

Compare Mortgage Rates

Before you make an offer, make certain you have the best mortgage rate locked down. Get pre-approved for a low mortgage rate online now. Not sure which mortgage product is right for you? Ask a mortgage broker to provide you with more information on fixed, variable, open, and closed rates for the best low mortgage rate.

Mortgage Fundamentals: Pre-Approved Vs. Pre-Qualified

What’s the difference?

Loan App

Pre-Approved Vs. Pre-Qualified

There are several stages of the Canadian mortgage rate approval procedure when you apply for a mortgage. It is essential to understand what they are and what they really mean.

What is Pre-Qualification?

This is the initial step of the low mortgage rate approval process wherein your mortgage broker takes a look at your overall earnings and financial obligation. The broker will determine your affordability by taking a look at your debt ratios (Gross Debt Service GDS and Total Debt Service (TDS)).

There are going to be a variety of conditions that you will need to meet in the pre-qualification before it is fully approved.

What is Pre-Approval?

Once accomplished, the mortgage broker will send your application to a lender who confirms your information with a certificate of approval. This generally includes a Canadian mortgage rate guarantee, which is typically valid for 60 and 120 days. You must comply with all the terms and conditions prior to approval.

What is Approval?

You have been fully approved for the mortgage at the best mortgage rate detailed in the agreement.

Advantages of a Mortgage Pre-Approval

A mortgage pre-approval enables you to lock in an interest rate. It offers additional security in understanding that you satisfy the initial financing requirements. It also enables any seller to understand that you are a serious buyer.

Most importantly, you understand clearly what you are able to purchase when you are buying a home.

Documents Required for a Pre-Approval

  1. Personal identification
  2. Income information
  3. Bank accounts
  4. Loans and other financial obligations
  5. Proof of financial assets
  6. Confirmation of the deposit and funds to pay for the closing cost

Each and every house hunt begins with a mortgage pre-approval. Start your quick online application today.

Mortgage Term Vs. Amortization

Do you understand the difference between your mortgage term and your amortization period?

Understanding Mortgage Terms

Understanding Mortgage Terms

A frequent source of confusion for potential homebuyers is the difference between a mortgage term and amortization period. A standard Canadian mortgage rate has a 5-year term with a 25-year amortization period.

Mortgage Term

The mortgage term is the length of time you commit to a low mortgage rate, lender, and associated best mortgage rate terms.

Mortgage Amortization Period

This is the length of time it will take you to repay your whole mortgage. Longer amortization periods lower your month-to-month payments, as you are paying your mortgage off over a greater number of years. But nevertheless, you will pay even more interest over the life of the mortgage.

Maximum Amortization Reduced to 30 years on March 18th, 2011

In January 2011, Minister Flaherty revealed that the maximum amortization duration on all CMHC insured houses would be lowered from 35 to 30 years.

Quite a few home buyers opt for a reduced amortization period leading to greater regular monthly payments if they have the means to do so, understanding that it encourages desirable saving habits and minimizes the overall interest payable.

Short vs. Long Term Amortization Periods

Prepayment privileges set out by your lender will determine whether you can reduce your amortization period, by either enhancing your regular month-to-month payments and/or putting lump sum payments towards the principal. Nevertheless, beyond these privileges, you will typically incur charges for making extra payments. According to the Canadian Association of Mortgage Professionals, 24 % of Canadians benefited from prepayment options in 2009.

Mortgage Transfers

What you will need to know.

Question mark

Ask Your Lender

Are you planning to transfer your mortgage to another property? If you’re trying to sell, chances are you still have a mortgage on the home you currently own. So what happens to your existing mortgage when you want to move on from your current home and purchase a new one?

Well, the reality is you still must repay the remaining mortgage balance, and this will need to be either paid off or transferred to your new home. You will also need to consider that since you are repaying your mortgage early, if you do not have an open mortgage, you may be required to pay a prepayment penalty.

Ask Your Lender

Here’s some information you should speak with your best mortgage rate lender about:

  • What amount of my remaining mortgage balance?
  • Can the buyer assume or take over my mortgage? If so, what are the requirements for the buyer?
  • Am able to pay off the total mortgage balance? If so, is there a prepayment penalty?
  • Can you transfer this mortgage to my new property?

Sometimes your lender will waive the penalty if you or the buyer takes out a new Canadian mortgage rate with them. Getting the answers to these questions in writing will avoid any unpleasant surprises later on.

Still have questions? Not a problem, speaking with a low mortgage rate specialist can help you determine what’s best for your personal situation. It’s free and there are no obligations.