Tag Archives: Mortgage

Construction Mortgages

Considering building a new home? Here is what you will need to understand.

Building a home is complex; your low mortgage rate shouldn’t be.

Let’s take a look at three different ways to finance your newly constructed home in Canada:

  1. Builder/Contractor built a home with your money: Customer has made an agreement with a registered builder to construct their home.
    • Mortgage Options: Completion Mortgage or Progress Draw.
  2. Self-Built Home: Customer would like to act as his/her own contractor.
    • Mortgage Options: Completion Mortgage or Progress Draw.
  3. Builder constructed home with their money: Customer requests funds when the home is 100 % complete.
    • Mortgage Options: Completion Mortgage.

Completion Mortgage

After you have purchased or built your new home through a residential homebuilder you will then require Canadian mortgage rate funds when the house is finished.

Progress Draw Mortgage

This mortgage is a type of funding that is advanced in intervals.

Relevant Terms

  • Solicitor: A progress draw requires a solicitor.
  • Progress Inspection Report: Details progress before the advancement of the best mortgage rate funds.
    • Interest on Draws/Advances: Interest is charged on total amount advanced.
    • Final Advance: Released upon final inspection after verifying that the job is complete.
    • Mortgage Insurance: Land draws are not available under CMHC guidelines.

Completion Stages

There are generally 3 stages to building a house:

  • Roof Stage / Roof Tight— Approximately 35 % complete.
  • Intermediate / Lock Up— Approximately 65 % complete.
  • Final Occupancy / Completion— 100 % complete.

Required Documentation

  • Written employment and income confirmation
  • Proof of down payment or equity
  • Copies of quotes
  • Full appraisal
  • Plans / House specifications
  • Fire insurance certificate

Do you need help working out the details of your construction mortgage? Contact FamilyLending.ca for expert advice.

Bank Or Broker?

Who should you consult for your mortgage pre-approval?

Handle your mortgage like every other major purchase– that is, be sure you make the effort to compare rates and shop around. Not every Canadian mortgage rate is the same.

Bank Rates

When you visit a bank, it’s worth bearing in mind that their loan officers are paid to sell you their products. They will do whatever is required of them to keep you from considering other options.

Mortgage Broker

A mortgage broker is a self-employed agent who works only for you. They are qualified professionals that will help you find the most effective mortgage rate for your unique situation. They compare products from a variety of banks and specialty lenders, and arrange the best low mortgage rate for your needs. The broker works for you, the customer, and most importantly, they are completely free. The lenders pay brokers once they close the mortgage deal.

More Reasons Why Mortgage Brokers Are a Great Choice

  • Protect Your Credit Score
    • Brokers help to protect your credit rating by only pulling one credit report and using it for all lenders.
  • Give You Expert Information
  • Save You Money
    • A good mortgage broker can offer tips on how to save money on interest while managing to keep your low mortgage rate payments reasonably priced.

Bank vs. Broker

Which ones suits your needs better– bank or broker?

Types of Mortgages

There are a variety of mortgage products available on the market. Typically, mortgages fall under one of the following three categories, open, closed or convertible. A mortgage broker will help you understand the various options.

Make your mortgage hunt less troublesome– contact a mortgage broker today.

Additional Costs of Buying a Home

Plan for these unanticipated costs when creating your budget.

A number of first time homebuyers are often shocked when they see the total cost of their home purchase, including the additional expenses, on closing day. Here’s a list of a few of the “hidden” expenditures you should expect to pay.

Land Survey

Despite the fact that most lenders may agree to the existing property survey, depending on when it was last conducted, it might be necessary to have another survey completed.

Home Inspection

The majority of lenders will request a home inspection, but even if they don’t, it’s worth the peace of mind to obtain another one.

Insurance

If you are applying for a high-ratio Canadian mortgage rate (with a down payment of less than 20 % of the purchase price), your lender will require you to purchase mortgage default insurance. While mortgage default insurance provides protection for the lender, you may wish to consider the mortgage rate life insurance for your own protection.

Legal Fees

Your lawyer will do a title search, register and prepare your low mortgage rate, and prepare the title deed.

Land Transfer

Land transfer tax must be paid by everyone who purchases property in Canada.

HST (harmonized sales tax)

HST was put into effect in July of 2010 in Ontario and British Columbia, HST (Harmonized Sales Tax) is applied to the purchase price of all new homes.

Appraisal

Your lender will only lend you a percentage of either the appraised market value of your home, or the home’s purchase price– often, the lesser of the two.

Unsure of how these additional costs will impact your home purchase? A mortgage broker can help. Contact a FamilyLending.ca mortgage specialist today.

8 Things to Be Aware of When Buying a Second Home

You can afford a second home, let us show you how!

Now that low interest Canadian mortgage rates are readily available, it seems like the perfect time to invest in a second home. Here’s what you should know before purchasing a second property.

Things to Learn Before Buying a Second Home

1) Do your research.

You will need to resist the urge to buy a home because you want a getaway. Research the properties, area, and low mortgage rate options beforehand. This is an investment, not just a vacation.

Continue reading →

What You Need to Know About the New NHA MBS Policies

Last Friday, the Canada Mortgage and Housing Corporation issued a statement announcing another round of mortgage restrictions, this time concerning limits on new National Housing Act Mortgage-Backed Securities (NHA MBS). The statement, which was sent to banks, credit unions, and other mortgage lenders, outlined new restrictions that would limit lenders to a maximum of $350-million new guarantees, the amount of “market NHA MBS”, that can be guarenteed by CMHC for the month of August. The restrictions come at a time when housing prices are still near record highs. Continue reading →