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Disclaimer: The information on this page is provided by a mortgage company, I have worked with the owner of this company for years and I trust him enough to reccomend him.
Once you apply by clicking the apply now button you will be approved withing 24 hours and funded within 48 hours in most cases. He has saved thousands of Canadians from forclosure;
If you are in a tough spot I personally highly reccomend you fill out the short online application and speak with him, he can get financing where no one else can.
I also reccomend you read the information on this page it will tell you everything you will ever need to know about home ownership and mortgages.
Scroll down to homebuying tools if you are not needed financing just yet or are able to get financing from your bank,
your bank should always be your first choice for a mortgage as they will give you the best rates.
Mortgage Loans Canada, Home Equity Loans Canada, Refinance Loans Canada, Mortgage Brokers Canada, Mortgage rates Canada, Mortgage Refinance Canada Second Mortgage Canada, Bad Credit Mortgage Canada, Mortgage Calculator Canada.
We make it possible for you to apply for your mortgage with multiple mortgage sources. Bank mortgage loans, Private Capital Mortgage loans, Finanace Company Mortgage loans.
We talk to hundreds of consumers like you trying to find the best mortgage solution for them.
We hear the same story the bank turned them down, or refused their refinance application.
THIS DOES NOT MEAN YOU WILL NOT BE ABLE TO GET A MORTGAGE. NO MATTER WHAT YOUR FINANCIAL SITUATION WE CAN FIND FINANCING FOR YOU.
The banks will not tell you about Finanace Companys offering Mortgage Solutions, They will not tell you how to find the private lenders.
IF YOU OWN YOUR HOME AND HAVE EQUITY WE CAN GET YOU FINANCING PERIOD.
Your financial situation may have changed and now the banks are refusing to refinance you, or you might have fallen a few payments behind and now they want to take your home and all the equity you built up with it!
DO NOT GIVE UP, DO NOT LET THE BANKS TAKE YOUR HOME AND STEAL YOUR HARD EARNED EQUITY
WE CAN GET YOU TEMPORARY FINANCING IN AS LITTLE AS 48 HOURS FROM A PRIVATE LENDER
What the banks are banking on is for you to let them forclose, now all your hard earned equity is theirs!
AGAIN I CANT STRESS ENOUGH IF YOU OWN YOUR HOME AND HAVE EQUITY WE CAN GET YOU FINANCING, YES EVEN IF YOU DONT HAVE A JOB, AND YES EVEN IF YOU HAVE "BAD" CREDIT OR NO CREDIT
It's happening to thousands of canadians every month dont be the next victim of the "finanacial crisis".
What you need to decide now is which of these three mortgage options to get you back on your feet and in good standing with the bank works best for you.
EQUITY LOAN: Equity loans are based on the equity in your house, for example you purchased the home for $200,000 therfor your mortgage rate and payments are based on you oweing $200,000. Between the time you purchased the house and got your initial mortgage for $200000 the value of the home has increased to $250 000. Also you have paid down the original mortgage so you now owe $150000. This means you have $100000 in home equity.
An equity loan is based on this amount, in most cases upto 80% of the equity in your home can be borrowed apon. This method is the fastest way to get the money you need to pay the money oweing to the bank to pay your credit card bills and any other bills that need to be returned to good standing or paid off completly.
You can also use this money to renovate your home, by doing so you are creating more equity a $15000 renovation can often result in a $50000 increase in equity. These equity loans are ment to be short term you are going to use the money to get yourself back on your feet, repair your credit and get rid of all the high interest payments you where previously making (credit cards, car loans, lines of credit ...). Now that your financial situation has improved as well your credit has improved and you no longer have to make payments to those credit cards, car loans ... You are ready to refinance. We will walk you through every step of the way, please dont hesitate to contact us even if you are just needing financial advice we will gladly help you free of charge because we know when you do need a mortgage, refinance or equity loan you will come to us to guide you through the proccess.
REFINANCE: A refinance is like an equity loan however you are paying off your original mortgage and getting a new one. (Mortgage rates are at record lows now is the best time to explore your refinance options, if you are in good standing with your bank make an appointment and see what they are willing to offer. You can always check all your bases and take the best offer for you. Get their offer in writing and contact us, we will do are best to find you a better offer if we can't then all you have to do is take that paper back to your bank and your ready to refinanace your mortgage) The best part about refinancing now is that you will be able to take advantage of the record low interest rates that can be locked in upto 10 years and in some cases longer. Chances are when you got your mortgage the interest rates where higher, therfor just by refinancing your payment will be reduced. For example you purchased your home for $200000 at a 5% interest rate your payment is based not only on the 5% interest rate but also on the $200000 initial mortgage amount. Now you have paid down your mortgage you only owe $150000 and the value of your property has increased to $250000. You now have $100000 in equity $80000 of it you can access and pay off all your high interest payments and loans (car loans, credit cards, lines of credit...) Because the interest rate today is much lower then when you originally fiananced your house and got your first mortgage you can pay off all your other high interest payments and still your mortgage payment will be less then it was before you refinanced. Lets say you refinanced for $200000 this means you received $50000 to pay off all your other bills or renovate. Because interest rates today are so much lower your initial mortgage of $200000 at 5% interest is replaced with a mortgage of $200000 with a 2.5% interest rate. Just to make it simple this means if your mortgage payment was $3000/month its now only $1500/month. Now not only have you paid off all your other bills no more car payment, credit cards etc
Your mortgage payment is reduced by $1500 aswell and you still have $50000 in equity (more if you spent some of the $50000 you received to renovate) you can tap later if you really needed to. Just to make it simple before the refinance you where paying $3000 for your mortgage, $600 for your car payments, $500 for your credit cards and another $500 for lines of credits. Your total monthly payments before your refinance $4600, Your total payments now $1500. Image what you could do for your family if you suddenly had $3100 extra every month and being free of debt.
I used to work for the banks I know how they think, they are modern day legal criminals. They dont want you to pay off your debts they want to give you more high interest credit cards and loans so you can forever be in their debt. While im not saying all credit is wrong and that we should throw away all our credit cards, Im saying lets be smart about our money cause you know they are. If you ask your financial adviser how do I become prosperous, he will advise you to save money in his bank with some mutual fund or another. While again these are great tools to gather wealth, they are not going to save you $31000 a month. Instead you will now be giving the bank what little money it isnt already taking from you and loosing money every month when you count inflation.
Please if you are in a situation where you need some help and advice contact me I will give you my unbiased view of what your options are for your perticular situation. If the banks wont give you a mortgage contact me. If the banks are refusing to let you refinance to lower rates contact me. If the bank is refusing to renew your mortgage because you fell into some financial difficulty contact me. You are not alone you do not need to loose your home other lender are out their, we can get you financing based on the equity in your home to get you back on track. I am sick and tired of hearing stories or people loosing their homes because the banks wont renew their mortgage because now that you have fallen into financial difficulty you suddenly dont qualify, they are trying to steal your equity. You paid your mortgage when you where not in this situation you built up that equity, in most of canada not only have you built equity by paying your mortgage down you have also gained equity because housing prices have been going up consistantly for years. Remeber there are other mortgage lenders out their we can get you the money you need to get back on your feet, to renovate your house and build more home equity to renovate your house so you have legal income suites that pay your mortgage for you. Mortgage rates are at record lows by not refinancing and locking in a lower rate even if you are in a good financial position is going to cost you thousands of dollars in the long run.
Like my mother tells me everytime im down you just got to take it one day at a time. Give me a call if you have equity in your house I will get it out for you. Remember you are not alone, everyone falls into hardship at one point or another in your life. The one thing you cant do is nothing, I give you my word if their is a way to get you the money you need I will find it. If I can't get you financing no one will.
CLICK HERE TO APPLY
WE HAVE ACCESS TO PRIVATE MORTGAGE FUNDS WE CAN FUND, FIRST MORTGAGE, SECOND MORTGAGE, OR REFINANCE TO ANYONE PERIOD
Here are all the tools you need to decide if homeownership is for you, how to calculate payment interest and information every homeowner needs to know
Please spend some time to go over your financial budget that way when you speak to your banker you already know everything they will ask of you.
If you are unable to source funds from your bank or they are refusing to renew your mortgage for whatever reason click the button above.
I have worked with this lender for years and he has helped thousands of people in your situation, he can get financing where no one else can.
Homebuying Tools — Mortgage Calculators
Homebuying Tools — Calculators
Easy to use mortgage tools to help you establish your financial situation, determine how much house you can afford and the maximum price that you should be considering.
Debt Service Calculator
A tool that allows homebuyers to evaluate their financial situation and understand how much they can comfortably afford to spend on a mortgage.
A tool to help you estimate the premium payable when you are purchasing a home. Simply enter the purchase price, down payment and the amortization period.
Household Budget Calculator
Compare your income with your current or planned expenses and debt payments and see what you can afford.
Mortgage Payment Calculator
A tool to find how much and how often your payment will be. Compare options and find one that's right for you.
Mortgage Affordability Calculator
Easy to use mortgage tool to help you estimate the maximum mortgage you can afford.
Homebuying Tips: Eight important tips
you need to know before you buy
your new home
- Canadian mortgage insurance
About Chip - A CHIP Home Income Plan is a loan secured by the equity in your home.
Without having to sell your home, you can receive up to 50% of the value of your home.
The big difference with CHIP is that you do not have to make any payments - interest or principal - for as long as you or your spouse live in your home.
You maintain ownership and control of your home while enjoying all the benefits of having converted some of its value into readily accessible, tax-free cash flow.
Buying a Home > Homebuying Step by Step > Step 1: Is Homeownership Right for You?
So, you’ve finally decided to fulfill a lifelong dream and buy your own home… how exciting! You are ready to fulfill your dream of having a place to call your own.
Buying a home is one of the biggest emotional and financial decisions you'll ever make. Prepare by learning about the process of homebuying and the responsibilities of homeownership.
The differences between renting and buying a home are vast, and there's a long list of pros and cons for both options.
And, remember — there is no one best decision for everyone. Before moving forward, though, here are some questions to consider.
- Do you have the necessary financial management skills?
- How financially stable are you?
- Are you ready to take on the responsibility of all the costs involved in homeownership, including mortgage payments, repairs, and maintenance?
- Are you able to devote the time required for home maintenance?
There are pros and cons for both renting and buying. Everyone must make his or her own best decision.
Buying a home is not for everyone. Take a moment to think through the advantages and disadvantages of both owning and renting. Use this worksheet to guide you.
Read over your completed worksheet and then think carefully. Are the advantages of owning your home really bigger than the advantages of renting?
Are the disadvantages of owning your own home really smaller than the disadvantages of renting?
If homeownership is for you, you must be both financially and emotionally ready. Buying a home isn't only about money. You should listen to your heart… and take an honest look at your lifestyle.
Take a look at some other people’s experience of homebuying.
How can you know if you are financially ready to become a homeowner?
This step guides you through some simple calculations to figure out your current financial situation, and the maximum home price that you should consider.
How Much are You Spending Now?
Calculate Your Household Expenses
Start figuring out your financial readiness by evaluating your present household budget. How much are you spending each month? Knowing exactly how much, will give you a better idea about whether you can afford to become a homeowner.
The Current Household Budget worksheet helps you take a realistic look at your current monthly expenses.
Or, you may also use the CMHC Household Budget Calculator to complete your current household budget now.
Calculate Your Monthly Debt Payments
Do you know how much debt you are carrying? You need this information to figure out whether you are financially ready for homeownership. If you decide to buy a home, mortgage lenders will ask for this information.
Use the form below to determine your current monthly debt payments. Fill in all the figures that apply to you, and then press the Calculate button. When you have finished, print the form. If you cannot print, write down the total on a sheet of paper.
Calculate Your Total Monthly Expenses
Your total monthly expenses are your household expenses plus your debt payments. To calculate your monthly expenses, add the total from the Current Household Budget as Homeowner to the total from Monthly Debt Payments form, using the form below.
(Total from Current Household Budget)
(Total from Monthly Debt Payments form)
How Much Can You Afford?
Before you begin shopping for a home, it’s important to know how much you can afford to spend on homeownership. You will want to plan ahead for the various expenses related to homeownership. In addition to purchasing the home, other significant expenses will include heating, property taxes, home maintenance and renovation as required. Two simple rules can help you figure out how much you can realistically pay for a home. You must understand these rules to understand if you will be able to get a mortgage.
Affordability Rule 1
The first rule is that your monthly housing costs shouldn't be more than 32% of your gross monthly income. Housing costs include your monthly mortgage payments (principal and interest), property taxes and heating expenses. This is known as PITH for short — Principal, Interest, Taxes and Heating.
Lenders add up your housing costs and figure out what percentage they are of your gross monthly income. This figure is called your Gross Debt Service (GDS) ratio. To be considered for a mortgage, your GDS must be 32% or less of your gross household monthly income.
Affordability Rule 2
The second rule is that your entire monthly debt load should not be more than 40% of your gross monthly income. Your entire monthly debt load includes your housing costs (PITH) plus all your other debt payments (car loans or leases, credit card payments, lines of credit payments, etc.). You have calculated these on the Monthly Debt Payments form. This figure is called your Total Debt Service (TDS) ratio.
Fill in the tables below to determine your GDS and TDS ratios.
Your Maximum House Price
The maximum home price that you can realistically afford depends on a number of factors. The most important factors are your household gross monthly income, your down payment and the mortgage interest rate. For many people, the hardest part of buying a home — especially their first one — is saving the necessary down payment.
Calculate Your Maximum House Price
Use the Mortgage Affordability Calculator below to figure out the maximum home price you can afford, the maximum mortgage amount you can borrow, and your monthly mortgage payments (including principal and interest).
- Interest is compounded semi-annually not in advance. The interest rate is fixed for the term of the mortgage. The interest rate is usually renegotiated at the end of the term of the mortgage.
- Minimum down payment may vary.
- These calculations are approximate. They do not account for the payment of CMHC Insurance Premiums, applicable sales taxes, closing costs, or other fees that may be required.
CMHC Mortgage Calculator is for general illustrative purposes only. The amounts it projects are based upon assumptions and estimates made according to generally accepted principles for mortgages in Canada. CMHC cannot guarantee the projections. Actual payment amount must be obtained from your lender. Neither CMHC nor any of its advisors shall have any liability for the accuracy of this information.
Mortgage Loan Insurance
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.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums. The cost for Mortgage Loan Insurance premiums is usually offset by the savings you get from lower interest rates.
Premium % of Loan
|Up to and including 65%
|Up to and including 75%
|Up to and including 80%
|Up to and including 85%
|Up to and including 90%
|Up to and including 95%
Traditional Down Payment
Non-traditional Down Payment
|Extended Amortization Surcharges
Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period.
Note: The amortization cannot exceed 30 years for mortgage loan-to-value ratios > 80%.
|* Premiums in Ontario and Quebec are subject to provincial sales tax. The provincial sales tax cannot be added to the loan amount.
Do Your Calculations Look Encouraging?
What is your current financial situation? After doing the calculations, do you feel fairly confident about beginning the homebuying process? You’re ready to proceed with homeownership.
Do Your Calculations Look Discouraging?
You may need to step back and make some improvements. Did your calculations show that you might have trouble meeting monthly debt payment? If that’s the case, you may find it difficult to get approved for a mortgage. Here are some things you can do to improve your situation:
- Pay off some loans first.
- Save for a larger down payment.
- Take another look at your current household budget to see where you can spend less. The money you save can go towards a larger down payment.
- Lower your home price — remember that your first home is not necessarily your dream home.
Here are some more helpful strategies:
- Meet with a credit counsellor. He (or she) can help you figure out how to minimize your debts.
- Buy your home through a rent-to-own program. These are sometimes provided by the builder or a non-profit sponsor.
- Find out about programs through which you can help build your own home.
- Ask the housing department of your municipality if any special programs exist.
What are Your Next Steps?
Get a Copy of Your Credit Report
Before approving a mortgage, lenders will want to see how well you have paid your debts and bills in the past. To do this, they consider your credit history (credit report) from a credit bureau. This tells them about your financial past and how you have used credit.
Before looking for a mortgage lender, get a copy of your own credit history. There are two main credit-reporting agencies: Equifax Canada Inc. and TransUnion of Canada. You can contact either one of them to get a copy of your credit report. There is often a fee for this service.
Once you receive your credit report, examine it to make sure the information is complete and accurate.
Get a Mortgage Pre-Approval
It’s a very good idea to get a pre-approved mortgage before you start shopping. Many realtors will ask if you’ve been approved. A lender will look at your finances and figure the amount of mortgage you can afford. Then the lender will give you a written confirmation, or certificate, for a fixed interest rate. This confirmation will be good for a specific period of time. A pre-approved mortgage is not a guarantee of being approved for the mortgage loan.
Even if you haven’t found the home you want to buy, having a pre-approved mortgage amount will help keep a good price range in mind.
Bring these with you the first time you meet with a lender:
- Your personal information, including identification such as your driver's license
- Details on your job, including confirmation of salary in the form of a letter from your employer
- All your sources of income
- Information and details on all bank accounts, loans and other debts
- Proof of financial assets
- Source and amount of down payment and deposit
- Proof of source of funds to cover the closing costs (these are usually between 1.5% and 4% of the purchase price)
Make Your Mortgage Work for You
Your lender or broker will offer you several choices to help find you the mortgage that best matches your needs. Here are some of the most common.
Amortization refers to the length of time you choose to pay off your mortgage. Mortgages typically come in 25 or 30-year amortization periods. However, they can be as short as 15 years. Usually, the longer the amortization, the smaller the monthly payments. However, the longer the amortization, the higher the interest costs. Total interest costs can be reduced by making additional (lump sum) payments when possible.
You have the option of repaying your mortgage every month, twice a month, every two weeks or every week. You can also choose to accelerate your payments. This usually means one extra monthly payment per year.
Interest Rate Type
You will have to choose between “fixed”, “variable” or “protected (or capped) variable”. A fixed rate will not change for the term of the mortgage. This type carries a slightly higher rate but provides the peace of mind associated with knowing that interest costs will remain the same.
With a variable rate, the interest rate you pay will fluctuate with the rate of the market. Usually, this will not modify the overall amount of your mortgage payment, but rather change the portion of your monthly payment that goes towards interest costs or paying your mortgage (principal repayment). If interest rates go down, you end up repaying your mortgage faster. If they go up, more of the payment will go towards the interest and less towards repaying the mortgage. This option means you may have to be prepared to accept some risk and uncertainty.
A protected (or capped) variable rate is a mortgage with a variable interest rate that has a maximum rate determined in advance. Even if the market rate goes above the determined maximum rate, you will only have to pay up to that maximum.
Use the Mortgage Payment Calculator to find how much and how often your payment will be. Compare options and find one that's right for you.
CMHC Mortgage Calculator is for general illustrative purposes only. The amounts it projects are based upon assumptions and estimates made according to generally accepted principles for mortgages in Canada. CMHC cannot guarantee the projections. Actual payment amount must be obtained from your lender. Neither CMHC nor any of its advisors shall have any liability for the accuracy of this information.
The term of a mortgage is the length of time for which options are chosen and agreed upon, such as the interest rate. It can be as little as six months or as long as five years or more. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.
“Open” or “Closed” Mortgage
An open mortgage allows you to pay off your mortgage in part or in full at any time without any penalties. You may also choose, at any time, to renegotiate the mortgage. This option provides more flexibility but comes with a higher interest rate. An open mortgage can be a good choice if you plan to sell your home in the near future or to make large additional payments.
A closed mortgage usually carries a lower interest rate but doesn’t offer the flexibility of an open mortgage. However, most lenders allow homeowners to make additional payments of a determined maximum amount without penalty. Typically, most people will select a closed mortgage.
TED AND SHAYLA
Ted and Shayla have found a newly built home. The asking price is $200,000 including the GST.
After adding together wedding gifts, a small inheritance and other savings Ted and Shayla found that they have $28,900.
Figure Out the Up-front Costs
There are many up-front costs when you buy a home. Early planning will help make sure things go smoothly.
A down payment is the part of the home price that does not come from the mortgage loan. The down payment comes from your own money. You can buy your home with a minimum down payment of 5%, if you have mortgage loan insurance from CMHC. You need a down payment of at least 20% for a conventional mortgage.
The deposit is paid when you make an Offer to Purchase to show that you are a serious buyer. The deposit will form part of your down payment with the remainder owing at time of closing. If for some reason you back out of the deal without having covered yourself with purchase conditions, such as financing, home inspection, etc., your deposit may not be refundable and you may be sued for damages. The size of the deposit varies. Your realtor or lawyer / notary can help you decide on the amount.
Your mortgage lender may ask you to pay for a recognized appraisal in order to complete a mortgage loan. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.
Having an independent appraisal done on a property before you make an offer is a good idea. It will tell you what the property is worth and help ensure that you are not paying too much.
The appraisal should include:
- Assessment of the property's physical and functional characteristics
- Analysis of recent comparable sales
- Assessment of current market conditions affecting the property
Ask your realtor or other member of your team to help you find an appraiser.
Mortgage Loan Insurance Premium
If you make less than a 20% down payment, you have a high-ratio mortgage. With a high-ratio mortgage your lender will need mortgage loan insurance. Mortgage loan insurance lets you buy a home with a minimum down payment of 5%.
Most Canadian lending institutions require mortgage loan insurance because it protects the lender. If the borrower defaults (fails to pay) on the mortgage, the lender is paid back by the insurer. You pay a premium for mortgage loan insurance. Your lender will add the mortgage loan insurance premium to your monthly payments, or ask you to pay it in full upon closing.
Mortgage Broker’s Fee
You may have decided to use a mortgage broker. The job of the mortgage broker is to find you a lender with the terms and rates that will best suit you.
Home Inspection Fee
CMHC recommends that you make a home inspection a condition of your Offer to Purchase. A home inspection is done by a qualified home inspector to provide you with information on the condition of the home. It generally costs about $500, depending on the age, size and complexity of the house and the condition that it is in. For example, it may be more costly to inspect a large, older, home, or one in relatively poor condition or that has many pre-existing problems or concerns.
Survey or Certificate of Location Cost
The mortgage lender may ask for an up-to-date survey or certificate of location. If the seller has a survey, but it is more than five years old, it will probably need to be updated. You should ask the seller to provide an updated survey, especially if there has been a new addition, deck or fence built close to the property line. If the seller does not have one, or does not agree to get one, you may have to pay for it yourself.
Remember, you must have permission from the property owner before hiring a surveyor to go onto the property. Ask your realtor to help co-ordinate this with the owner. A survey or certificate of location can cost $1,000 to $2,000.
Your lender, lawyer, or notary may suggest that you get title insurance. This will cover loss caused by defects of title to the property.
Land Registration Fees
Land Registration fees are sometimes called Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax. In some provinces and territories, you may have to pay this provincial or municipal charge when you close the sale. The cost is a percentage of the property’s purchase price. Check on the internet or with your lawyer (or notary) or other team member to find out about the current rates. These fees can cost a few thousand dollars.
If the home has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is drinkable. You can negotiate these costs with the vendor and list them in your Offer to Purchase.
If the house has a septic tank, it should be professionally checked to make sure it is in good working order. You may negotiate the cost with the vendor and list it in your Offer to Purchase.
Estoppel Certificate Fee (does not apply in Quebec)
This applies if you are buying a condominium, or strata unit, and could cost up to $100. Also called a Status Certificate it outlines a condominium corporation’s financial and legal state.
Prepaid Property Taxes and/or Utility Bills
Property taxes are charged by the municipality where the home is located. They are based on the value of the home. The seller may have already paid property tax or other expenses that apply to the time after the house passes into your hands. You need to pay back the seller for taxes and other costs (including items like filling the oil tank).
The mortgage lender requires you to have property insurance because your home is security for the mortgage. Property insurance covers the cost of replacing your home and its contents in case of loss. Property insurance must be in place on closing day.
Legal fees and related costs must be paid on closing day. The minimum cost is $500 (plus GST/HST). In addition, your lawyer or notary will charge you direct costs to check on the legal status of the property.
Depending on your situation, you may have some other initial expenses to consider:
- Moving expenses
Whether you’ll be hiring a moving company, or renting a truck and asking friends for help, there are likely to be moving expenses.
- Renovations or repairs
Can renovations, or repairs, be delayed, or are some necessary to do immediately?
- Condominium Fees
Do you have to make the initial payment for these monthly fees?
- Service connection fees
Telephone, gas, electricity, cable TV, satellite TV, Internet, and so on, may charge service connection fees. Some utilities may ask you to pay a deposit.
Does your new home come with appliances? Do you already have your own?
- Gardening equipment
Will you need to buy gardening equipment, the first summer in your new home?
- Snow-clearing equipment
Will you need to buy snow-clearing equipment, the first winter in your new home?
- Window treatments
Do blinds, or curtains come with the house?
- Decorating materials
Do you want to re-paint or apply wallpaper? Do the floors need to be refinished or re-carpeted? Do you have all the tools you need for redecorating?
- Hand tools
Do you have the basic hand tools you’ll need for your new home?
Will you need a dehumidifier to control moisture levels?
Use the Home Purchase Cost Estimate form to help figure out your estimated up-front costs.
Once you have a good idea about your finances, you’ll need to think clearly about the home you’d like to buy.
Your Needs — Now and in the Future
Try to buy a home that meets most of your needs for the next 5 to 10 years, or find a home that can grow and change with your needs.
Here are some things to consider.
How many bedrooms do you need?
How many bathrooms do you need?
Do you need space for a home office?
What kind of parking facilities do you need? For how many cars?
Do you want air conditioning? If so, what type?
Do you want storage or hobby space?
Is a fireplace or a swimming pool high on your list?
Do you have family members with special needs?
Do you want special features to save energy, enhance indoor air quality, and reduce environmental impact?
Lifestyles and stages
No matter what type of housing you choose, you must have a clear idea of your needs today, as well as your possible future needs. These are some examples of questions homebuyers might ask:
Do I plan to have children?
Do I have teenagers who will be moving away soon?
Am I close to retirement?
Will I need a home that can accommodate different stages of life?
Do I have an older relative who might come to live with me?
The CMHC worksheet Home Features Checklist can help you think about what you need today, and what you may need in the future. Complete the worksheet and print it.
FlexHousing™ is a housing concept that incorporates, at the design and construction stage, the ability to make future changes easily and with minimum expense, to meet the evolving needs of its occupants.
The Right Choice for Keith and Joy
Keith and Joy hoped to have two children, and room to invite one of their parents to live with them, if needed. After learning about FlexHousing™, they decided to buy a three-bedroom FlexHouse that could change with their needs.
What Location Should You Choose?
Location is a critical factor. A home with everything you need, in the wrong location, is probably not the right home for you. Here are some things to consider about location.
- Do you want to live in a city, a town or in the countryside?
- How easy will it be to get to where you work? How much will the commuting cost?
- Where will your children go to school? How will they get there?
- Do you need a safe walking area, or recreational facility, such as a park, nearby?
- How close would you like to be to family and friends?
Download a copy of the Your Next Move: Choosing a Neighbourhood with Sustainable Features fact sheet.
What is a Sustainable Neighbourhood?
A sustainable neighbourhood meets your needs, while protecting the environment. Homes in a sustainable neighbourhood are located near shops, schools, recreation, work and other daily destinations. This helps reduce driving costs and lets residents enjoy the health benefits of walking and cycling. Land and services, like roads, are used efficiently. Sustainable neighbourhoods also feature a choice of homes that are affordable.
In your search for a sustainable neighbourhood, here are some questions to ask:
- Easy transportation
- Are stores, schools, recreation facilities, restaurants, and health services within walking or cycling distance? Will your children need to take a bus to school? Can they walk to the park? Can you do most of your shopping without a car?
- Are there nearby bus stops and cycling lanes? How long is the bus ride to work, or school? Can you safely bike?
- House size and features
- Are the homes compact with shared walls to reduce heating costs?
- Are homes reasonably sized with lots requiring less upkeep?
- Are there different dwelling types (such as single-detached, semi-detached, townhouse and apartments) in the neighbourhood?
- Are the lots modestly sized? Roadways narrow? Driveways/parking areas small? Do natural drain ways lead to streams and storm water ponds or park lands? Is there native vegetation and streams with woodland edges?
- “Look and feel”
- Do the buildings have a friendly face to the street? Are the community centres, shops and meeting places welcoming?
- Are there trees lining the street? Do you find the homes interesting to look at? Do the building sizes feel comfortable to you? Are the roads easy to walk along or cross?
- Do the homes have “eyes on the street”? (In other words, are there people around who might watch out for you? Is there somewhere to go in an emergency?)
- Is there adequate street lighting?
- Are there safe places for children to play?
- Are the streets safe for cyclists and pedestrians?
- Is traffic slow moving and light?
Use the CMHC worksheet What’s Important to You to figure out the things that are important in your neighbourhood.
Do You Want a New Home or a Previously-Owned Home?
A new home is one that has just been built – no one else has lived in it yet. You might buy a new home from a contractor who has built it, or you might hire a contractor to build it for you. A previously-owned home (often called a resale) has already been lived in. Here are some characteristics of each type of home.
- A new home has up-to-date design that might reflect the latest trends, materials and features.
- You may be able to choose certain features such as style of siding, flooring, cabinets, plumbing and electrical fixtures.
- You may have to pay extra if you want to add certain features, such as a fireplace, trees and sod, or a paved driveway. Make sure you know exactly what's included in the price of your home.
- Taxes such as the Goods and Services Tax (GST) (or, in certain provinces, the Harmonized Sales Tax (HST)) apply to a new home. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at www.cra-arc.gc.ca.
- A new home will have lower maintenance costs because everything is new, and many items are covered by a warranty. You should set aside money every year for future maintenance costs.
- A warranty may be provided by the builder of the home. Be sure to check all the conditions of the warranty. It can be very important if a major system such as plumbing, or heating, breaks down.
- New Home Warranty programs are generally provided by provincial and territorial governments. There are also private new home warranty programs. In some provinces a warranty may be provided by the builder of the home. Check with your realtor or lawyer/notary to find out what the new home warranty program in your province or territory covers.
- Neighbourhood amenities
- schools, shopping malls and other services, may not be completed for years.
Building Your Own Home
Some people prefer the challenge and flexibility of building their own home. On one hand, you make all the decisions about size, design, location, quality of material, level of energy-efficiency and so on. On the other hand, expect to invest lots of time and energy.
- When the home already exists, you can see what you are buying. Since the neighbourhood is established, you can see how easy it is to access services such as schools, shopping malls, libraries, etc.
- Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces or finished basements or swimming pools.
- You don't have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
- You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.
What Type of Home Should You Buy?
What types of homes will you be visiting with the idea of buying? Do you see yourself living in a detached single-family home? Or, perhaps a townhouse? Maybe, a duplex?
A single-family detached home is one dwelling unit. It stands alone, and sits on its own lot. This often gives the family a greater degree of privacy.
A semi-detached home is a single-family home that is joined on one side to another home. It can offer many of the advantages of a single-family detached home. It is often less expensive to buy and maintain.
A duplex is a building containing two single-family homes, located one above the other. Sometimes, the owner lives in one unit and rents the other.
Row House (Townhouse)
Row houses (also called townhouses) are several similar single-family homes, side-by-side, joined by common walls. They can be freehold or condominiums. They offer less privacy than a single-family detached home, although each has a separate outdoor space. These homes can cost less to buy and maintain, even though some are large, luxury units.
Stacked townhouses are usually two-storey homes. Two two-story homes are stacked one on top of the other. The buildings are usually attached in groups of four or more. Each unit has direct access from the outside.
Link or Carriage Home
A link, or carriage home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.
A manufactured home is a factory-built, single-family home. It is transported to a chosen location, and placed onto a foundation.
A modular home is also a factory-built, single-family home. The home is typically shipped to a location in two, or more, sections (or modules).
Mobile homes, like manufactured or modular homes, are built in factories, and then taken to the place where they will be occupied. While these homes are usually placed in one location and left there permanently, they do retain the ability to be moved.
A self-contained unit in part of a building consisting of a room or set of rooms including kitchen and bathroom facilities.
Forms of Ownership
People who do not rent their home, own it. There are two forms of ownership.
Freehold means that one person (or two, such as joint ownership by spouses) owns the land and house outright. There is no space co-owned or co-managed with owners of other units.
Freehold owners can do what they want with their property — up to a point. They must obey municipal bylaws, subdivision agreements, building codes and federal and provincial laws, such as those protecting the environment.
Detached and semi-detached homes, duplexes and townhouses are usually owned freehold.
Condominium ownership means you own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.
Condominium ownership is ownership of a unit, usually in a highrise but can also be a townhouse or in a lowrise.
Ravi and Amita's Experience
Ravi and Amita saved a substantial amount for a down payment and the up-front costs on their first home. After looking a little on their own, Ravi thought they should try to find a real estate agent. He was concerned that the agent might charge for her services. They interviewed a few agents and settled on Janine.
What Professionals Should You Call On?
Even if this isn’t your first homebuying experience, you’ll want to get help from a team of professionals. Having the help of professionals will give you experienced and knowledgeable people for reliable information and answers to your questions. These are the people who can help you:
You will be doing a lot of interviewing to establish your team. Use this handy CMHC worksheet to help you keep track of the people you interview and the ones you finally choose.
The next sections describe each professional role.
Your realtor's job is to:
- Help you find the ideal home
- Write an Offer of Purchase
- Negotiate to help you get the best possible deal
- Give you important information about the community
- Help you arrange a home inspection
Finding a Realtor
When looking for a realtor, don’t be afraid to ask questions — especially about possible service charges. Normally, the seller pays a commission to the agent. But, some realtors charge buyers a fee for their services. Use the CMHC worksheet Checklist for Evaluating Realtors to help you.
If you would like to know more about a realtor's ethical obligations, go to the Canadian Real Estate Association's website at www.crea.ca, or call your local real estate association.
The Lender or Mortgage Broker
Many different institutions lend money for mortgages — banks, trust companies, credit unions, caisses populaires (in Quebec), pension funds, insurance companies, and finance companies. Different institutions offer different terms and options — shop around!
Mortgage brokers don't work for any specific lending institution. Their role is to find the lender with the terms and rates that are best for the buyer.
Finding a Lender or Mortgage Broker
- Ask around. Your realtor, another professional, family members, or friends may give you helpful suggestions.
- Look in the Yellow Pages™ under “Banks,” “Credit Unions” or “Trust Companies” for a lender and under “Mortgage Brokers” for a broker.
- Contact the Canadian Association of Accredited Mortgage Professionals at 1-888-442-4625, or visit the Association’s website at www.caamp.org.
Having a lawyer/notary involved in the process will help ensure that things go as smoothly as possible. You need a lawyer (or a notary in Quebec) to perform these tasks:
- Protect your legal interests by making sure the property you want to buy does not have any building or statutory liens, charges, or work or clean-up orders
- Review all contracts before you sign them, especially the Offer (or Agreement) to Purchase.
Finding a Lawyer
Law associations can refer you to lawyers who specialize in real estate law. In Quebec, contact the Chambre des notaires du Québec for the names of notaries specializing in real estate law.
Remember that a lawyer/notary should:
- Be a licensed full-time lawyer/notary
- Live/work in the area
- Understand real estate laws, regulations and restrictions
- Have realistic and acceptable fees
- Be able and willing to explain things in language you can easily understand
- Be experienced with condominiums, if that’s what you are buying
Lawyer/notary fees depend on the complexity of the transaction and the lawyer’s expertise.
Shop around for rates when choosing your lawyer/notary. Use the CMHC worksheet Checklist for Selecting a Lawyer/Notary to guide you.
The Insurance Broker
An insurance broker can help you with your property insurance and mortgage life insurance.
Lenders insist on property insurance because your property is their security for your loan. Property insurance covers the replacement cost of your home, so the size of your premium depends on the value of the property.
Your lender may also suggest that you buy mortgage life insurance. Mortgage life insurance gives coverage for your family, if you die before your mortgage is paid off. Your lender may offer this type of insurance. In this case, the lender adds the premium to your regular mortgage payments. However, you may want to compare rates offered by an insurance broker and by your lender.
Don’t confuse property insurance, or mortgage life insurance, with mortgage loan insurance.
The Home Inspector
Whether you are buying a resale home, or a new home, consider having it inspected by a knowledgeable and professional home inspector.
The home inspector’s role is to inform you about the property’s condition. The home inspector will tell you if something is not working properly, needs to be changed, or is unsafe. He or she will also tell you if repairs are needed, and maybe even where there were problems in the past.
A home inspection is a visual inspection. It should include a visual assessment of at least the following:
- Doors and windows
- Roof and exterior walls
- Plumbing and electrical systems (where visible)
- Heating and air conditioning systems
- Ceilings, walls and floors
- Insulation (where visible)
- Septic tanks, wells or sewer lines (if inspector is qualified)
- Any other buildings such as a detached garage
- The lot, including drainage away from buildings, slopes and natural vegetation
- Overall opinion of structural integrity of the buildings
- Common areas (in the case of a condominium/strata or co-operative)
Finding a Home Inspector
It’s important to hire a knowledgeable, experienced and competent home inspector. In most areas of Canada, there are no licensing or certification requirements for home inspectors. Anyone can say that they are a home inspector without having taken any courses, passed tests or even inspected houses. So look for a home inspector who belongs to a provincial or industry association holds an accreditation that demonstrates training and experience, provides inspection reports, carries insurance, provides references and has strong experience with the type of home to be inspected.
While CMHC does not recommend any individual home inspector or association, CMHC supports national standards of competency for home inspectors such as the home inspection industry's voluntary and independent National Certification Program.
Home inspector fees are generally in the $500 range, depending on the size and condition of the home. Use the CMHC worksheet Home Inspection Checklist to review your home inspection report.
Before you make an offer, an independent appraisal can tell you what the property is worth. This will help ensure that you are not paying too much. In order to complete a mortgage loan, your lender may ask for a recognized appraisal.
The appraisal should include:
- Unbiased assessment of the property's physical and functional characteristics
- Analysis of recent comparable sales
- Assessment of current market conditions affecting the property
Finding an Appraiser
Ask your realtor to help you find an appraiser.
The Land Surveyor
If the seller does not have a Survey or Certificate of Location, you will probably need to get one for your mortgage application. If the Survey in the seller's possession is older than five years, it needs to be updated.
Remember that you must have permission from the property owner before hiring a surveyor to go onto the property. Ask your realtor to help co-ordinate this with the owner.
Finding a Land Surveyor
Search the web or Yellow Pages™ or ask your realtor to help you find a land surveyor.
If you are buying a newly constructed home, you will have to hire a builder or contractor. If you are buying a resale house that needs renovations, you may also require a builder or contractor.
Here are some things to keep in mind when choosing a builder or contractor:
- Ask for references. Talk to other customers about the builder's performance.
- Check with the New Home Warranty program in the area (if applicable).
- Visit other housing developments that the company has built.
- Ask builders or contractors if they are members of a local homebuilders' association. Ask them for their provincial license number.
If you are having a custom home built, remember that:
- You may want to hire an architect to design the house, and supervise construction.
- Builders of custom homes usually work on either a fixed-price or a cost-plus basis. Authorize any changes to your contract by writing your name or initials beside the change.
Make sure your contract with the builder or contractor is very specific about construction details. You can even require that the brand names or model number of finishes be specified. If you agree to a change in the contract, write your initials next to the change.
Starting Your Search
Here are some ways to begin looking for your new home:
Tell everyone you know that you are looking for a new home. Surprising things sometimes happen. For example, you might hear about a home that is just becoming available on the market.
- Newspapers and real estate magazines
Check the new homes section in daily newspapers. Look for the free real estate magazines available at newsstands, convenience stores and other outlets. These publications are free and give pictures and short descriptions of homes for sale.
- The Internet
Check out real estate websites, such as realtor.ca. These websites give information and pictures of a wide range of properties. Most sites let you search by location, price, number of bedrooms, and other features.
- “For Sale” signs
Drive, bike or walk around a neighbourhood that interests you and look for “For Sale” signs. This is a good way to find homes that are being sold by the owner and are not listed with an agent.
- Visit new development sites
If you are looking for a newly built home, you can see available models and get information from builders.
- Work with a realtor
For most buyers, a realtor is key to finding the right home.
Useful Tips for Your Search
- Keep records
Whether you have a realtor or are looking by yourself, visit lots of homes before choosing one. Some things to compare are the home’s energy rating, utility costs, property taxes and major repairs. These will affect your monthly housing expenses. You can ask to see copies of utility and other bills. Use the CMHC Home Hunting Comparison Worksheet to make sure you get all the information you need to compare homes.
- Check out the property’s current financing
If the existing mortgage on the home is favourable, it may be possible to take it over from the vendor. It may even be possible to get a vendor take back mortgage, to help close the deal.
- Think twice
Even if a home seems perfect, go back and take a closer, more critical look at it. Visit it on different days and different times of the day. Chat with the neighbours. Look deeper — don’t be distracted by attractive surface details.
- Energy Rating
Some houses and most new homes in Canada have an Energy Rating that describes the energy efficiency of the home. An energy-rated home usually has a sticker with the rating on the electrical panel. The energy rating is on a 0 – 100 scale. The higher the rating, the more energy-efficient is the home, and the less it costs to operate.
- CMHC statistics and analysis
CMHC has the latest statistical information and analysis of housing trends. Our Market Analysis Centre tracks information for local, provincial and national markets.
Making an Offer to Purchase
After you have found the home you want to buy, you need to give the vendor an Offer to Purchase (sometimes called an Agreement of Purchase and Sale). It is very helpful to work with a realtor (and/or a lawyer/notary) to prepare your offer. The Offer to Purchase is a legal document and should be carefully prepared.
These items are typically included:
Your legal name, the name of the vendor and the legal civic address of the property.
The price you are offering to pay.
- Things included
Any items in or around the home that you think are included in the sale should be specifically stated in your offer. Some examples might be window coverings and appliances.
- Amount of your deposit
- The closing day
The closing day is the date you take possession of the home. It is usually 30 – 60 days after the date of agreement. But, it can be 90 days, or even longer.
- Request for a current land survey of the property.
- Date the offer expires
After this date the offer becomes null and void — that means it’s no longer valid.
- Other conditions
Other conditions may include a satisfactory home inspection report, a property appraisal, and lender approval of mortgage financing. This means that the contract will become final only when the conditions are met.
What Happens After You Make an Offer to Purchase?
Imagine that your realtor has helped you prepare an Offer to Purchase. This offer includes all the details of the sale. To be extra cautious (since you know an Offer to Purchase is legally binding) ask your lawyer to look at it before showing it to the vendor. The realtor presents the offer to the vendor. What can you expect to happen next? There are three possible responses.
- Response 1
The vendor accepts your offer. The deal is concluded and you move on to the next steps in the buying process.
- Response 2
The vendor makes a counter-offer. The counter-offer might ask for a higher price, or different terms. You can sign the offer back to the vendor, offering a higher price than your original offer, but lower than the vendor’s counter-offer. If the vender accepts this counter-offer, the deal is concluded.
- Response 3
The vendor makes a counter-offer, asking for a higher price or different terms. If a counter-offer is returned to you at a higher price, ensure that you know exactly how much you can afford before you start negotiating. You don’t want to get caught up in the heat of the moment with costs you can’t afford. You reject the counter-offer because the price is still too high, or you can’t agree to the conditions. The sale doesn’t go through, and your deposit is returned.
Rita: A Homeowner’s Experience
Rita made an Offer to Purchase on an older property. Her real estate agent, Nissa, suggested that a home inspection should be done and that approval of mortgage financing be a condition of the offer. The inspection showed repairs that would have cost more than Rita could afford.
Getting a Mortgage
Once your Offer to Purchase has been accepted, go to see your lender. Your lender will verify (and update, if necessary) your financial information and put together what’s needed to complete the mortgage application. Your lender may ask you to get a property appraisal, a land survey, or both. You may also be asked to get title insurance. Your lender will tell you about the various types of mortgages, terms, interest rates, amortization periods and, payment schedules available.
Depending on your down payment, you may have a conventional mortgage or a high-ratio mortgage.
Types of Mortgages
A conventional mortgage is a mortgage loan that is equal to, or less than, 80% of the lending value of the property. The lending value is the property’s purchase price or market value — whichever is less. For a conventional mortgage, the down payment is at least 20% of the purchase price or market value.
If your down payment is less than 20% of the home price, you will typically need a high-ratio mortgage. A high-ratio mortgage usually requires mortgage loan insurance. CMHC is a major provider of mortgage loan insurance. Your lender may add the mortgage loan insurance premium to your mortgage or ask you to pay it in full upon closing.
Your lender will tell you about the term options for the mortgage. The term is the length of time that the mortgage contract conditions, including interest rate, will be fixed. The term can be from six months up to ten years. A longer term (for example, five years) lets you plan ahead. It also protects you from interest rate increases. Think carefully about the term that you want, and don’t be afraid to ask your lender to figure out the differences between a one, two, five-year (or longer) term mortgage.
Mortgage Interest Rates
Mortgage interest rates are fixed, variable or adjustable.
Fixed Mortgage Interest Rate
A fixed mortgage interest rate is a locked-in rate that will not increase for the term of the mortgage.
Variable Mortgage Interest Rate
A variable rate fluctuates based on market conditions. The mortgage payment remains unchanged.
Adjustable Mortgage Interest Rate
With an adjustable rate, both the interest rate and the mortgage payment vary, based on market conditions.
Open or Closed Mortgage
A closed mortgage cannot be paid off, in whole or in part, before the end of its term. With a closed mortgage you must make only your monthly payments — you cannot pay more than the agreed payment. A closed mortgage is a good choice if you’d like to have a fixed monthly payment. With it you can carefully plan your monthly expenses. But, a closed mortgage is not flexible. There are often penalties, or restrictive conditions, if you want to pay an additional amount. A closed mortgage may be a poor choice if you decide to move before the end of the term, or if you want to benefit from a decrease of interest rates.
An open mortgage is flexible. That means that you can usually pay off part of it, or the entire amount at any time without penalty. An open mortgage can be a good choice if you plan to sell your home in the near future. It can also be a good choice if you want to pay off a large sum of your mortgage loan. Most lenders let you convert an open mortgage to a closed mortgage at any time, although you may have to pay a small fee.
Amortization is the length of time the entire mortgage debt will be repaid. Many mortgages are amortized over 25 years, but longer periods are available. The longer the amortization, the lower your scheduled mortgage payments, but the more interest you pay in the long run. If each mortgage term is five years, and the mortgage is amortized over 20 years, you will have to renegotiate the mortgage four times (every five years).
A mortgage loan is repaid in regular payments — monthly, biweekly or weekly. More frequent payment schedules (for example weekly) can save some interest costs by reducing the outstanding principal balance more quickly. The more payments you make in a year, the lower the overall interest you have to pay on your mortgage.
New Home Warranty Programs
Each province has new home warranty programs.
See the Homeowner Protection Office at www.hpo.bc.ca for the most up-to-date list of warranty programs. These include:
Lombard Canada New Home Warranty Program: www.lombard.ca
Travelers Guarantee Company of Canada (formerly London Guarantee Insurance Company): www.travelersguarantee.com
National Warranty Program Ltd.: (includes Royal and Sun Alliance) www.nationalhomewarranty.com
Pacific Home Warranty Insurance Services Inc. (Echelon General Insurance Company): www.pacificwarranty.com
Willis Canada Ltd (Commonwealth Insurance): www.williswarranty.com
Progressive New Home Warranty Program (Echelon General Insurance Company): www.progressivewarranty.com
National Home Warranty Program Ltd.: www.nationalhomewarranty.com
New Home Warranty Program of Alberta: www.anhwp.com
Blanket Home Warranty Ltd.: www.blankethomewarranty.ca
Progressive New Home Warranty Program (Echelon General Insurance Company): www.progressivewarranty.com
National Home Warranty Program Ltd.: www.nationalhomewarranty.com
New Home Warranty Program of Saskatchewan: www.nhwp.org
Blanket Home Warranty Ltd.: www.blankethomewarranty.ca
Progressive New Home Warranty Program (Echelon General Insurance Company): www.progressivewarranty.com
National Home Warranty Program Ltd.: www.nationalhomewarranty.com
New Home Warranty Program of Manitoba: www.mbnhwp.com
Blanket Home Warranty Ltd.: www.blankethomewarranty.ca
Tarion Warranty Corporation: www.tarion.com
Garantie des maisons neuves de l ’APCHQ: www.gomaison.com
Garantie des maisons neuves de l’ACQ: www.acq.org
La garantie des maîtres bâtisseur: www.maitresbatisseurs.com
New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador
Atlantic Home Warranty Program: www.ahwp.org
Lux Residential Warranty Program: www.luxrwp.com
Progressive New Home Warranty Program (Echelon General Insurance Co.): www.progressivewarranty.com
Closing day is the day when you finally take legal possession and get to call the house your home. The final signing usually happens at the lawyer or notary’s office.
These are the things that happen on closing day:
- Your lender will give the mortgage money to your lawyer/notary.
- You must give the down payment (minus the deposit) to your lawyer/notary. You must also give the remaining closing costs.
- Your lawyer/notary
- Pays the vendor
- Registers the home in your name
- Gives you the deed and the keys to your new home
Hiring a Mover
When planning your move, friends or relatives may be able to recommend a professional moving company. Don’t forget to ask the mover for references. Ask the mover for an estimate and outline of fees (Do they charge a flat rate or hourly fee?). Once you’ve chosen a mover, ask them to come to your home to see what will be moved in case the estimate needs to be changed.
You’ll want to ensure that your belongings are insured during the move. Your home or property insurance may cover goods in transit. Call your broker or insurance company to be sure. Ask if you are fully covered. Many moving companies offer additional insurance coverage. Be aware that professional movers are not responsible for items such as jewellery, money, or important papers. Move these yourself to keep them safe.
If you decide to do your own packing, keep in mind that you will need the proper materials, and that packing can take up a lot of time.
On moving day, go through the house with the van supervisor and give him (or her) any special instructions. The supervisor will note the condition of your goods on an inventory list. Go through the house with the supervisor to make sure the list is complete and accurate. When the van arrives at your new home, mark off the items on the mover’s list as they are unloaded. If you paid for the movers to unpack boxes and remove packing materials, remember that they will not put dishes or linens into cupboards.
Moving day is almost always tiring. But, planning ahead will make the transition as smooth as possible.
The amount you spend depends on your decisions about many things. Here are some to think about:
- Do you want to hire professional movers?
- If so, will it be a large company, or a smaller local moving company?
- Will you need to buy insurance to protect your items in transit?
- If you plan to move yourself, will you rent a vehicle?
- Will your current auto or home insurance policy cover your items during the move?
- Will you have to pay utility companies a fee to connect their services in your new home? Are there other utility charges (such as a deposit)?
Changing the Locks
When you move into your new home you’ll want to change the exterior door locks for security. After all, you want only the people you choose to have the key to your new home. You can change the locks yourself, or call a locksmith to do the job.
Both your old home and your new home should be given a thorough cleaning at moving time. Whether you’re buying cleaning supplies and doing it yourself, or hiring someone to clean for you, the costs can really add up. Plan for this expense.
You might want to re-paint, replace some light fixtures, refinish the floor, re-carpet, or do any number of other re-decorating tasks. Plan your budget, and consider postponing some projects for a period of time.
If your offer to purchase didn’t include appliances, and if you don’t have your own, you will have to buy them when you move into your new home. Some appliances might have installation charges.
Tools and Equipment
When you own your own home, you can no longer call the landlord to do repairs. You’ll need to own some basic hand tools and possibly some gardening and snow clearing equipment.
Your Financial Responsibility
Make Your Mortgage Payments on Time
You can make your mortgage payments monthly, biweekly or weekly. But, whichever timetable you’ve chosen, it’s important to always make payments on time. Making late payments is called delinquency. Delinquency may result in late charges and negatively affect your credit rating. Failing to make payments can even lead to very serious consequences, like foreclosure.
A good way to prevent late payments is to have the amount automatically deducted from your account every month. It’s also recommended that you keep at least three months’ worth of mortgage payments in savings for emergency situations. If you are having trouble making payments, discuss the situation with your lender.
Plan for the Costs of Operating a Home
Besides your mortgage, property taxes and insurance, operating a home has many other ongoing costs. Maintenance and repair costs are at the top of the list. There may be other costs as well, for example a security alarm, snow removal, or gardening. If you have a condominium or strata, some of these expenses may be included as part of your monthly maintenance fee.
Save for Emergencies
Even when you can do repairs yourself, there are costs. When you have to pay for repairs, the costs are higher. As your home ages, it will need major repairs or replacement — this happens to every building. For example, when you bought your home, you might already know that the roof will need to be replaced in a few years because of its age. These are expected repairs and can be planned for. However, many repairs are unexpected, and can sometimes be costly.
Set aside an emergency fund to deal with unexpected problems ranging from major repairs to illness and job loss. A good guideline is to save 5% of your take-home pay, and to keep the money in a special account.
Live Within Your Budget
Prepare a monthly budget and stick to it. Take a few minutes every month to check your spending and see if you are meeting your financial goals. If you spend more than you earn, you must find new ways to save. If you are having trouble sticking to your budget, ask a professional money manager for help.
If you haven’t already reviewed your budget, now is the perfect time. Use the helpful CMHC worksheet Household Budget as Homeowner.
Martin: A Homeowner’s Experience
Martin, a successful young professional, has recently purchased a new townhouse in an area that will improve in a couple of years.
Maintenance, repair, and renovations are a normal part of homeownership. You will need to know about your home’s basic components, and know the actions you will need to take to adjust these systems or turn them off in case of emergency.
You’ll need to inspect your home regularly, and replace, or repair, parts and materials that wear out. And of course, since Canadian seasons can be so extreme, you’ll need to do many maintenance tasks on a seasonal basis.
Is your Home Safe?
Fire Evacuation Plan
Do you have a fire evacuation plan? A plan means that you make sure everyone in your home knows how to get out from each room, in case of a fire. If your home has a second floor, you need a special escape plan to get to the ground. Check to see that windows have not been painted shut. Although doors and windows should always be securely locked, you have to be able to open them in an emergency.
Fire extinguishers must always be easy to reach. If you have a two storey home, there should be a fire extinguisher on each floor. Remember to check your fire extinguishers at least once a year. To help you remember, make a habit of doing it when you set your clocks to Daylight Saving Time. Replace a fire extinguisher that is 10 years or older.
In some areas, it is a legal requirement to have smoke alarms in your home. Whether or not it is a legal requirement, having smoke alarms is an excellent precaution. Check smoke alarm batteries at least once a year.
Carbon Monoxide Detectors
Carbon monoxide is an invisible, odourless, poisonous gas. Carbon monoxide detectors are important to have. They will let you know if there are high levels of carbon monoxide in your home. This can save you from illness, or even death. Check them at least once a year. Make a habit of checking your fire extinguishers, smoke and carbon monoxide detectors all at the same time.
Paper, paint, chemicals and other clutter can be a fire hazard. Make sure these are stored in a safe place. When you no longer need the hazardous materials, you must dispose of them at a community toxic waste center. Never put hazardous materials into the garbage.
Collect your important papers and store them in a safe place — for example, a fireproof box, or a safety deposit box.
Keep a list of emergency phone numbers (including 911, poison prevention line, doctors, relatives, neighbours and friends) close to the phone. Make sure your children are aware of the list.
Besides doing regular maintenance and repairing your home, you might also want to consider renovating or making improvements. These changes will not only make the home more pleasant for you to live in, they may also increase its value.
How Much is Just Right?
When planning renovations, be careful not to go overboard unless you plan to stay in your home for many years. If you are planning to sell your house, make sure that your changes won’t make your home worth a lot more than the other homes around you. The value of your home is closely related to the other homes in your area.
Over time, some renovations can practically pay for themselves, especially if they result in savings on utility bills, a higher selling price or years of greater comfort and enjoyment in your home.
Some Things to Keep in Mind
Here are some things to keep in mind when planning a change or renovation:
- Ask yourself, “How appealing will this change be to someone buying my home in the future?” You can make very personalized changes with paint. Paint is inexpensive and can easily be changed. But, flooring, cabinets and countertops have a longer life — make choices that will also appeal to others.
- Think about getting your home energy-rated. This will tell you how energy efficient your home is and what improvements are possible. Visit Natural Resources Canada at www.oee.nrcan.gc.ca to find information on current energy programs.
- Updating the bathrooms and kitchen in an older home can increase its resale value.
- Landscaping is important. The right planting can improve the appearance and value of your home.
- Updating your exterior paint, installing new roofing, resurfacing your walkways and driveway, and adding attractive mailboxes can help make your home more appealing.
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- Adjustable mortgage interest rate:
- With an adjustable rate, both the interest rate and the mortgage payment vary, based on market conditions.
- Length of time over which the debt will be repaid.
- Process for estimating the market value of a property.
- Certified professional who carries out an appraisal.
- The increase in value of something because it is worth more now than when you bought it.
- Approved Lender:
- A lending institution authorized by the Government of Canada through CMHC to make loans under the terms of the National Housing Act. Only Approved Lenders can negotiate CMHC insured mortgages.
- Assumption Agreement:
- A legal document signed by a homebuyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder or the previous owner.
- Blended Payment:
- A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases.
- A person or company that builds homes.
- Carriage home:
- A carriage, or link home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.
- Certificate of location (or land survey):
- A document that shows property boundaries and measurements, specifies the location of buildings on the property and states easements or encroachments.
- Certificate of status:
- Also called an Estoppel certificate, it is a certificate that outlines a condominium corporation's financial and legal state. Fees may vary and may be capped by law (does not apply in Quebec).
- Closed mortgage:
- A closed mortgage cannot be paid off, in whole or in part, before the end of its term. Many closed mortgages limit prepayment options such as increasing your mortgage payment or lump sum prepayment (usually up to 20% of your original principal amount).
- Closing costs:
- Costs in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on closing day. They range from 1.5% to 4% of a home’s selling price.
- Closing day:
- Date on which the sale of the property becomes final and the new owner takes possession of the home.
- Canada Mortgage and Housing Corporation. A Crown corporation that administers the National Housing Act for the federal government and encourages the improvement of housing and living conditions for all Canadians. CMHC also develops and sells mortgage loan insurance products.
- CMHC Insurance Premiums:
- The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
- Commitment Letter (or Mortgage Approval):
- Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.
- Compound Interest:
- Interest calculated on both the principal and the accrued interest.
- Conditional offer:
- An Offer to Purchase that is subject to specified conditions, for example, the arrangement of a mortgage. There is usually a stipulated time limit within which the specified conditions must be met.
- Condominium (or strata):
- A unit, usually in a highrise or lowrise, or a townhouse that can be owned. You own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.
- A person responsible for overall construction of a home, including buying, scheduling, workmanship, and management of subcontractors and suppliers.
- Conventional mortgage:
- A mortgage loan up to a maximum of 80% of the lending value of the property. Typically, the lending value is the lesser of the purchase price and market value of the property. Mortgage insurance is usually not required for this type of mortgage.
- If your original offer to the vendor is not accepted, the vendor may counteroffer. This means that the vendor has amended something from your original offer, such as the price or closing date. If a counteroffer is presented, the individual has a specified amount of time to accept or reject.
- Credit bureau:
- A company that collects information from various sources and provides credit information on a person’s borrowing and bill paying habits to help lenders assess whether or not to lend money to the person.
- Credit history or Credit Report:
- The main report a lender uses to determine your creditworthiness. It includes information about your ability to handle your debt obligations and your current outstanding obligations.
- Curb appeal:
- How attractive the home looks from the street. A home with good curb appeal will have attractive landscaping and a well-maintained exterior.
- A legal document that is signed by both vendor and purchaser, transferring ownership. This document is registered as evidence of ownership.
- Default on payment:
- Failure to make a mortgage payment.
- Failing to make a mortgage payment on time.
- Money placed in trust by the purchaser when an Offer to Purchase is made. The sum is held by the real estate representative or lawyer/notary until the sale is closed and then it is paid to the vendor.
- The decrease in value of something because it is now worth less than when you bought it.
- Down payment:
- The portion of the home price that is not financed by the mortgage loan. The buyer must pay the down payment from his/her own funds or other eligible sources before securing a mortgage.
- A duplex is a building containing two single-family homes, located one above the other.
- This is where someone else has the right for access to or over another person’s land for a specific purpose, such as a driveway or public utilities.
- The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the mortgage is reduced through regular payments. Market values and improvements to the property may also affect equity.
- Estoppel Certificate:
- Also called a certificate of status, it is a certificate that outlines a condominium corporation's financial and legal state. Fees may vary and may be capped by law (does not apply in Quebec).
- Fixed mortgage interest rate:
- A locked-in rate that will not increase for the term of the mortgage.
- A housing concept that incorporates, at the design and construction stage, the ability to make future changes easily and with minimum expense, to meet the evolving needs of its occupants.
- The legal process where the lender takes possession of your property and sells it to cover the debts you have failed to pay off. When you default on a loan and the lender feels that you are unable to make payments, you may lose your home to foreclosure.
- Freehold :
- Ownership of land and buildings (house) by one person (or two, such as joint ownership by spouses). Detached and semi-detached homes, duplexes and townhouses are usually owned freehold. Freehold owners can do what they want with their property — up to a point. They must obey municipal bylaws, subdivision agreements, building codes and federal and provincial laws, such as those protecting the environment.
- Gross Debt Service Ratio (GDS):
- The percentage of the borrower's gross monthly income that will be used for monthly payments of principal, interest, taxes and heating costs (P.I.T.H.) and half of any condominium maintenance fees.
- Gross monthly income:
- Monthly income before taxes and deductions.
- High-ratio mortgage:
- A mortgage loan higher than 80% of the lending value of the property. This type of mortgage may have to be insured — by CMHC, for example — against payment default.
- Home inspector:
- A person who visually inspects a home to tell you if something is not working properly, or is unsafe. He or she will also tell you if repairs are needed, and maybe even where there were problems in the past.
- Home warranty:
- (New Home Warranty Program) A guarantee that if something covered under the warranty needs to be repaired it will be. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty.
- Household budget:
- A plan that allocates income for household expenses.
- insurance provides coverage to ensure a loan is paid. See also Mortgage Loan Insurance and Mortgage Life Insurance.
- Insurance premium:
- Payment for insurance.
- The cost of borrowing money. Interest is usually paid to the lender in regular payments along with repayment of the principal (loan amount).
- Interest rate:
- The price paid for the use of money borrowed from a lender.
- Land registration:
- A legal document that records the ownership of a property and land.
- Land survey:
- (Survey or Certificate of Location) : A document that shows property boundaries and measurements, specifies the location of buildings on the property and states easements or encroachments.
- Land surveyor:
- A professional who can survey a property in order to provide a certificate of location.
- A legal advisor who assists people by representing them on legal matters.
- A mortgage lender is an institution (bank, trust company, credit union, etc.) that lends money for a mortgage.
- Life insurance:
- See Mortgage life insurance.
- A claim against a property for money owing. A lien may be filed by a supplier or a subcontractor who has provided labour or materials but has not been paid.
- Link home:
- A link, or carriage home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.
- Lump Sum Prepayment:
- An extra payment, made in lump sum, to reduce the principal balance of your mortgage, with or without penalty. A closed mortgage typically restricts the amount and frequency of the prepayments you can make. With an open mortgage, however, you can make a lump sum prepayment at any time without penalty. Making prepayments can help you pay off your mortgage sooner and ultimately save on interest costs over the life of your mortgage.
- Manufactured home:
- Sometimes called a mobile home is a factory-built, single-family home. It is transported to a chosen location, and placed onto a foundation.
- Maturity Date:
- The last day of the term of the mortgage. On this day, the mortgage loan must either be paid in full or the agreement renewed.
- Mobile home:
- These are built in factories, and then taken to the place where they will be occupied. While these homes are usually placed in one location and left there permanently, they do retain the ability to be moved.
- Modular Home:
- A factory-built, single-family home. The home is typically shipped to a location in two, or more, sections (or modules).
- A mortgage is a security for a loan on the property you own. It is repaid in regular mortgage payments, which are usually blended payments. This means that the payment includes the principal (amount borrowed) plus the interest (the charge for borrowing money). The payment may also include a portion of the property taxes.
- Mortgage approval:
- Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.
- Mortgage broker:
- The job of the mortgage broker is to find you a lender with the terms and rates that will best suit you.
- Mortgage life insurance:
- Mortgage life insurance gives coverage for your family, if you die before your mortgage is paid off.
- Mortgage loan insurance:
- If you have a nigh-ratio mortgage (more than 80% of the lending value of the property) your lender will probably require mortgage load insurance, which is available from CMHC or a private company.
- Mortgage payment:
- A regular payment to the lender that includes both the interest and the principal.
- Mortgage term:
- Length of time that the agreed-upon mortgage contract conditions, including interest rate, is fixed.
- MLS — Multiple Listing Service:
- A multiple listing service is a real estate agents’ cooperative service that contains descriptions of most of the homes that are for sale. Real estate agents use this computer-based service to keep up with properties they are listing for sale in their area.
- Net worth:
- Your financial worth, calculated by subtracting your total liabilities from your total assets.
- New Home Warranty Program:
- Coverage in the event that an item under the warranty needs to be repaired. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty.
- In Quebec a notary handles the legal matters related to homebuying.
- Offer to purchase:
- A written contract setting out the terms under which the buyer agrees to buy the home. If the Offer to Purchase is accepted by the seller, it forms a legally binding contract that binds the people who signed to certain terms and conditions.
- Open mortgage:
- A flexible mortgage that allows you to pay part before the end of its term.
- A period of time during which a house or apartment for sale or rent is held open for public viewing.
- Operating Costs:
- The expenses that a homeowner has each month to operate a home. These include property taxes, property insurance, utilities, telephone and communications charges, maintenance and repairs.
- Payment schedule:
- The monthly, biweekly, or weekly mortgage payments
- See CMHC Insurance Premiums.
- The amount that you borrow for a loan. Each monthly mortgage payment consists of a portion of the principal that must be repaid plus the interest that the lender is charging you on the outstanding loan balance. During the early years of your mortgage, the interest portion is usually larger than the principal portion.
- Principal, interest, taxes and heating — costs used to calculate the Gross Debt Service ratio (GDS).
- Property Insurance:
- Insurance that you buy for the building(s) on the land you own. This insurance should be high enough to pay for the building to be re-built if it is destroyed by fire or other hazards listed in the policy.
- Property taxes:
- Taxes charged by the municipality where the home is located based on the value of the home. In some cases the lender will collect a monthly amount to cover your property taxes, which is then paid by the lender to the municipality on your behalf.
- Real estate:
- Property consisting of houses and land.
- Realtor or real estate agent:
- A person who acts as an intermediary between the seller and the buyer of a property.
- Reserve Fund:
- This amount is set aside by the homeowner on a regular basis so that funds are available for emergency or major repairs. Setting aside 5% of your monthly take-home pay will give you a well-funded reserve.
- Row house:
- Also called a townhouse, a row house is one unit of several similar single-family homes, side-by-side, joined by common walls.
- Property that can be claimed by a creditor if a loan is not repaid.
- Single-family detached home:
- Free-standing home for one family, not attached to a house on either side.
- Single-family semi-detached home:
- Home for one family, attached to another building on one side.
- Stacked townhouse:
- Two two-story homes are stacked one on top of the other. The buildings are usually attached in groups of four or more. Each unit has direct access from the outside.
- Strata (or condominium):
- a unit, usually in a highrise or lowrise, or a townhouse that can be owned. You own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Strata owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.
- Survey or Certificate of Location:
- A document that shows property boundaries and measurements, specifies the location of buildings on the property and states easements or encroachments.
- Sustainable neighbourhood:
- Neighbourhood that meets residents needs while protecting the environment.
- Total Debt Service (TDS) ratio:
- The percentage of gross monthly income required to cover the monthly housing payments and other debts, such as car payments.
- Mortgage term is the length of time that the mortgage contract conditions, including interest rate, are fixed.
- A freehold title gives the holder full and exclusive ownership of the land and building for an indefinite period. A leasehold title gives the holder the right to use and occupy the land and building for a defined period.
- Title Insurance:
- Insurance against loss or damage caused by a matter affecting the title to immoveable property, in particular by a defect in the title or by the existence of a lien, encumbrance or servitude.
- Total Debt Service Ratio (TDS):
- The percentage of gross monthly income required to cover the monthly housing payments and other debts, such as car payments.
- Also called a row house, a townhouse is one unit of several similar single-family homes, side-by-side, joined by common walls.
- Variable mortgage interest rate:
- Fluctuates based on market conditions but the mortgage payment remains unchanged.
- The seller of a property.
- Vendor take-back mortgage (Sometimes called take-back mortgage):
- The vendor, not a financial institution, finances the mortgage. The title of the property is transferred to the buyer who makes mortgage payments directly to the seller. These types of mortgages, can be helpful if you need a second mortgage to buy a home.
- Warranty (New Home Warranty Program):
- Coverage in the event that an item under the warranty needs to be repaired. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty. All provinces have New Home Warranty programs for newly built homes. However, there are currently no such programs in the Territories.
Maintaining a Home
For most Canadians, their home is their most important investment. It's where your family spends a lot of time, so keeping it healthy, well tended and safe is important. A regular schedule of seasonal maintenance and repairs can help you protect your investment by putting a stop to the most common and costly problems before they occur.
In This Section:
- General Maintenance and Repair
Learn more about basic, regular maintenance tasks that should be performed on your home and its systems.
- Your Home and Your Health
Basic repairs and maintenance provide great opportunities to make your home healthier. Learn more our Healthy Housing™ concept and what you can do to correct moisture and air issues in your home.
- Adaptations for Seniors
Homes can be adapted to meet the changing needs of seniors, improving safety and allowing seniors to maintain their independence.
- Energy Efficiency and Cost Savings
Find out how to make your home more energy-efficient and learn about alternate sources of home energy
Renovating a Home
Planning is the key to a successful renovation. To help you plan your renovation project, CMHC has information and easy-to-understand tips that can help you assess your requirements and learn the key questions before you get started.
In This Section:
- Before You Renovate: Renovation Guide
A step-by-step approach to planning your renovation project. This guide presents you with key questions on practicality, finances and adaptability as well as a handy checklist.
- Renovating for Energy Savings
This series of fact sheets describe options for saving energy in houses of specific styles and ages.
- Renovation Fact Sheets
A series of fact sheets on different renovation topics to help you in planning and assessing your renovation project.
- Renovation Video
A short online video offering information and tips about popular renovation projects.
Programs and Financial Assistance
Financial assistance takes the form of forgivable loans or non-repayable contributions, and can be used to fund repairs, renovations, accessibility modifications, the creation of low-income rental units, and home adaptations.
In September 2008, the Government of Canada announced $1.9 billion, over five years, for housing and homelessness programs for low-income Canadians. As part of this investment, the renovations programs were extended for two years, until March 31, 2011.
These programs are available for low-income households, seniors, and persons with disabilities and are cost-shared and delivered by Provinces and Territories in most jurisdictions.
Financial Assistance for Homeowners:
Equity Refinance Mortgage Loans Canada
Mortgage Loans House Equity Canada Refinance Loans Homes Real Estate Mortgage Brokers Home equity loans Mortgage rates Mortgage Refinance Second Mortgage First Mortgage BC Mortgage loans Alberta Mortgage Loans Ontario Mortgage Loans Newfoundland Mortgage Loans Pension Mortgage Broker Mortgage Loan Home Loan Mortgage Lender Home Mortgages Home Equity Loan Refinance Home Mortgage Experts Refinance Home Loan Home Improvement Loan Vacation Home Mortgage Mortgage Professionals Property Mortgages
1st & 2nd Mortgages
Your Mortgage Experts
After all, what are the formal mortgage broker training, attendance at mortgage seminars, and time and effort that you've put in doing for you now? There has to be something else in today's market. As someone who has had mortgage loan training and who I'm sure pays attention to the news and realizes how many foreclosures are out there right now, aren't you ready to learn how you can profit from the current real estate economy and, in doing so, earn 10 times what you would make for simply originating a loan?
Now that you've completed the Quick Start Guide portion of my online posts, let's dive into the next series of material, which covers how to effectively market your preforeclosure business. Remember that my entire short sale course for mortgage brokers has nine main subjects that it will cover. So, let's start by quickly reviewing all of the topics that will be covered over the next several posts.
Types of offers you will be making to motivated sellers
Benefits of a business model that focuses on pre foreclosure
The 3 M's of Marketing Part I - Your Market
The 3 M's of Marketing Part II - Your Message
The 3 M's of Marketing Part III - Your Media
Implementing your marketing plan
Trust me when I tell you that your business is only as effective as how you market it. For this reason, the next several posts will be very important to your overall success. Now, let's go into the heart of this week's lesson. With any type of real estate investment purchase, there are a number of ways to buy and pre foreclosures are no different. What may differ in helping a client work through the foreclosure process is how they want to proceed. Many sellers see the light and realize that their best option is to sell the home. In this case, there are three primary options for you to work with them to help stop foreclosure:
1) A 'subject to' purchase, where you help them remedy their default with the lender and continue making their payments until you can sell the home. Although we will cover how this type of deal is structured, foreclosure laws may vary from state to state so make sure you understand how to best proceed where you live and invest.
2) A real estate short sale purchase, where you help the client negotiate a discounted payoff with the lender
3) A wholesale purchase, where you get a pre foreclosure property under contract with the seller and then assign the contract to another investor for a fee.
Every pre foreclosure deal is different and so too should be your decision in how to purchase each deal you come across in your real estate investing business. Sometimes, though, sellers may be in a position to stay in their homes and there are also ways to help them accomplish this. These include :
Helping them work out an arrangement with their lender
Helping them refinance their current loan
Arranging a lease back where they repurchase the home from you at a later date (this strategy is a sensitive one when it comes to state foreclosure laws so be sure you research this one thoroughly before ever doing it!)
With all of these options, there are likely few real estate foreclosures for which you will be unable to at least have some idea how to best pursue a solution. Since you are in the mortgage lending business already, the idea of marketing your services should be something that you are well on top of, again a huge advantage you have over other investors. The mortgage lending business is intimately tied to real estate and puts you in a great position to profit from the booming preforeclosure market. Please take the time to review the action steps and tips from all of my recent posts and make sure you've paid attention because we're going to move onward and forward and I want you to be in an ideal position to act upon what you are learning. Stay tuned, I have so much more to share with you, and all the best to you in success.
The Short Sale Expert to Mortgage Brokers
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Homeowners who are considering re-financing their home may have a wealth of options available to them. However, these same homeowners may find themselves feeling overwhelmed by this wealth of options. This process doesnt have to be so difficult though. Homeowners can greatly assist themselves in the process by taking a few simple steps. First the homeowner should determine his refinancing goals. Next the homeowner should consult with a re-financing expert and finally the homeowner should be aware that re-financing is not always the best solution.
Determine Your Goals for Re-Financing
The first step in any re-financing process should be for the homeowner to determine his goals and why he is considering re-financing. There are many different answers to this question and none of the answers are necessarily right or wrong. The most important thing is that the homeowner is making a decision which helps him achieve his financial goals. While there are no right or wrong answer to why re-financing should be considered there are, however, certain reasons for re-financing which are very common. These reasons include:
* Reducing monthly mortgage payments
* Consolidating existing debts
* Reducing the amount of interest paid over the course of the loan
* Repaying the loan quicker
* Gaining equity quicker
Although the reasons listed above are not the only reason homeowners might consider re-financing, they are some of the most popular reasons. They are included in this article for the purpose of getting the reader thinking. The reader may find their mortgage re-financing strategy fits into one of the above goals or they may have a completely different reason for wanting to re-finance. The reason for wanting to re-finance is not as important as determining this reason. This is because a homeowner, or even a financial advisor, will have a difficult time determining the best re-financing option for a homeowner if he does not know the goals of the homeowner.
Consult with a Re-Financing Expert
Once a homeowner has figured out why they want to re-finance, the homeowner should consider meeting with a re-financing expert to determine the best refinancing strategy. This will likely be a strategy which is financially sound but is also still geared to meeting the needs of the homeowner.
Homeowners who feel as though they are particularly well versed in the subject of re-financing might consider skipping the option of consulting with a re-financing expert. However, this is not recommended because even the most educated homeowner may not be aware of the newest re-financing options being offered by lenders.
While not understanding all the options may not seem like a big deal, it can have a significant impact. Homeowners may not even be aware of mistakes they are making but they may here of friends who re-financed under similar conditions and receive more favorable terms. Hearing these scenarios can be quite disheartening for some homeowners especially if they could have saved considerably more while re-financing.
Consider Not Re-Financing as a Viable Option
Homeowners who are considering re-financing may realize the importance of evaluating a number of different re-financing options to determine which option is best but these same homeowners may not realize they should also carefully consider not re-financing as an option. This is often referred to as the do nothing option because it refers to the conditions which will exist if the homeowner does not make a change in their mortgage situation.
For each re-financing option considered, the homeowner should determine the estimated monthly payment, amount of interest paid during the course of the loan, year in which the loan will be fully repaid and the amount of time the homeowner will have to remain in the home to recoup closing costs associated with re-financing. Homeowners should also determine these values for the current mortgage. This can be very helpful for comparison purposes. Homeowners can compare these results and often the best option is quite clear from these numeric calculations. However, if the analysis does not yield a clear cut answer, the homeowner may have to evaluate secondary characteristics to make the best possible decision.
|By: jeff rauth
It often comes as a surprise to many residential brokers and loan officers how vulnerable your fee can be as a commercial loan broker. Unlike residential lenders that provide fee or ysp statements 95% of commercial lenders do nothing to protect the broker. Instead you are often expected to provide the title company a signed fee agreement so that they add your fee to the settlement statement. If you don't have a formal fee agreement signed by your borrower you are putting yourself in a very vulnerable position.
The scenario of running around for months, collecting documents after documents per the lenders request, finally winning the deal and having it close all to not get paid is a very real possibility. If you don't set this up right from the beginning you are basically asking to get screwed.
So, when and how do you ask the borrower to sign your commercial broker fee agreement? There are two basic different strategies on this as it can be complicated. First is getting the agreement signed in the very beginning be3fore you even look at a single documentation. The second is to get the borrower to sign after you have had a chance to review the file and determine if it's worth working on. This may seem a small detail, but it is important.
What you don't want to do is have the borrower sign the agreement after they've seen a term sheet from a lender. If you've ever heard a borrower say, after reviewing a LOI you delivered, 'oh, I know this Bank. I've talked to them. Well, why do I need you?' than you know what I'm talking about. If you haven't, than keep brokering commercial loans and you will.
So, which is the better strategy? Getting it signed up front or after you've got some momentum and trust with the borrower? It really depends on your style, the deal, and the relationship you have with the borrower.
Some commercial mortgage brokers act as a combination of a broker and an hourly consultant. This is more of a traditional approach and will require additional steps and a more thorough sales process to get borrowers to agree. Often commercial brokers that conduct business this way will only work on an exclusive basis and essentially demand that they will organize and conduct the whole shopping process and no matter what, will get paid. This strategy does have its draw backs though, like being 'stuck' on working on deals that turn out to have little chance of funding. And, it can be a very difficult arrangement to sell to the borrower to give up that much control. Brokers with this set up will normally ask to get their fee agreement signed immediately.
The other strategy is really all about building some momentum with the borrower and getting them committed to the process and working with the you the commercial loan broker. Some brokers prefer this method as they get more of a chance to qualify the deal before they bother to get the agreement signed.
Whatever you decide on how to approach your borrowers, don't depend on mere words or a few emails to protect you fee. Get your agreement signed or don't be surprised if you have problems collecting your fee.
Mortgage refinance sounds like a really good idea to a lot of people until they start looking at all of the costs associated with it. When you refinance your home you are looking at paying costs of three to six percent of the principal due on the home. In most cases, three to six percent is a hefty chunk of change and then you may also be looking at pre-payment penalties. Before you went to refinance you may have never even heard of pre-payment penalties, so why are you having to pay them?
Understanding Pre-Payment Penalties
Many times lenders like to protect themselves against people refinancing or paying off a loan on their own before the agreed upon date. A lot of borrowers don't understand this as they assume that the lender would like to get their money any way they can. It's true that the lender wants their money back, but what you fail to realize with this way of thinking is that the mortgage lender is in business for themselves and when you pay off your loan early they stop making money because you are no longer paying them interest. The interest on your loan is how the lender makes their money and they need this money to continue doing business.
The lender will often write a pre-payment penalty into the loan so that if you refinance or you end up coming into some money and you pay off the loan early, that they will get some money to compensate for the loss of the interest that you would have paid them over the course of 30 years or whatever the term of your loan was. Pre-payment penalties vary from lender to lender but they are often a percentage of the principal balance, such as three percent of the remaining principal on the loan. So, if you still had $80,000 left on your mortgage and you had to pay three percent of it to get out of the loan you would be paying $2,400, and that is on top of the closing costs associated with the new loan.
It is often these pre-payment penalties that make mortgage refinance unaffordable for a lot of people. Before you start looking into the process too seriously you should inquire as to whether you have a pre-payment penalty or not. This may help you decide if now is the time to refinance or not. If you do have a pre-payment penalty you will need to factor this into the math as to whether the refinance is truly going to save you any money.
If you are able to lower your interest rate enough you may find that refinancing can still save you money, but you should be sure if you do refinance that your new loan does not have a pre-payment penalty. You may never refinance again and you may not pay off the loan early, but it is nice to know that if you choose to do either of these things that you will not be penalized for paying off the loan early. Having to pay the fees once is certainly enough and most lenders will be willing to forgo the penalty stipulation in the loan if you ask for it to be left out, if only you had known this the first time around!
Who knows? Either way, real estate is a risky business. Tying up all that money and having very little liquidity can spell disaster for any investor.
In any hot market there are always ways to make money without taking any risk yourself.
Just look at Levi Strauss. He traveled west during the Gold Rush to make his fortune as a gold miner. But he found that it was harder than advertised. So instead he did the next best thing, he started selling to the miners. He sold them something they all needed - jeans! And he made his fortune without risk. In fact, many of the store owners in that area got rich selling to the people who had the "gold bug"
If you want to make money on the real estate boom, I suggest you sell to the people who have the "real estate bug". The people who want to get in on the bull market and make a killing. Sell them something they all need- money!
You can do it just like I do, become a mortgage broker.
Become a mortgage broker and you can easily make hundreds of thousands of dollars by helping other who want to get rich quick in real estate.
There is very little cost to get started and no risk. When you become a mortgage broker, you can still keep your day job and work part-time while making a full time income.
In many states you don't even need a license to become a mortgage broker. You can get started today!
There is more demand for mortgage brokers today than ever in history. And demand will continue to grow. The U.S. population continues to grow. Everyone wants the American Dream of owning their own house. If you become a mortgage broker you can make that dream come true for your fellow Americans.
If you want the cards stacked in your favor you should really look a little closer at the trends that give more reasons to become a mortgage broker.
- The U.S. Population is growing exponentially.
- Americans are saving less then ever before - if someone wants to buy a house, they have to borrow money. They have no choice. They must use your service.
- As home prices go up, so do mortgage broker commissions. The fees are a percentage of the loan amount.
- More and more people are buying second homes and vacation properties.
- Over 65% of people getting a loan use a mortgage broker instead of a bank.
When you become a mortgage broker and work part-time you can work from home and keep your day job. If the market goes up - great!. If the market goes down, people will be selling their homes and investors will be buying. These investors will need loans from you to buy. You make money either way.
You could also be a real estate agent. But you'd have to drive people around all day. Becoming a mortgage broker means you can sit in your office while people come to see you. There is no need for you to go anywhere.
After you become a mortgage broker, life will never be the same.
|By: Kirthy S
Have you ever thought of how you would meet your mortgage repayments if you lost your job or if you are unable work due to an accident or a long illness? If you have not thought about this, it is time you did! Because you have an excellent cost effective option to protect your home in such circumstances- Mortgage Payment Protection Insurance.
What is Mortgage Payment Protection Insurance?
Mortgage is one of the biggest financial commitments in a person's life. Mortgage Payment Protection Insurance is a sensible option for anyone who wants to protect their home from advent of unfortunate circumstances. When you choose Mortgage Payment Protection Insurance you can pay your monthly mortgage repayments even if you are off work due to illness or you are unemployed. Mortgage Payment Protection Insurance from some companies also cover building insurance.
These policies require a Qualifying Period of around 28 days, which is a minimum number of days before you can claim against the policy. Once you qualify the insurance company you have applied with will pay you until you get a job or reach the maximum number of months that the insurance company will pay out (which is generally for a year with exception of few companies which will pay for two years).
You might feel that Mortgage Payment Protection Insurance with your mortgage lender is the logical step. However most mortgage lenders charge heavily. In such cases Mortgage Payment Protection Insurance from specialist providers is the cost effective option. The borrower needs to research and weigh the pros and cons of the policy before applying for it.
Are you eligible for Mortgage Payment Protection Insurance?
You are eligible for Mortgage Payment Protection Insurance if:
?You are over 18 years of age and under 65 years of age
?You have already availed a mortgage or will be taking out a nationwide mortgage
?You are employed and have been employed for the last 6 months. However you need not be employed for 6 months if you are taking a new mortgage or a further advance
?You will be living in United Kingdom permanently
However there are a few exclusions when Mortgage Payment Protection Insurance will not pay out. For instance when you voluntarily leave your job because of misconduct or dishonest behavior or if you suffer from long term financial problems which dont display any realistic chance of recovery. Most homeowners who have a full time working partner or savings to the tune of £8,000 will not be able to claim Mortgage Payment Protection Insurance.
Life is full of uncertainties. It is difficult to imagine how you would cope with unemployment, accidents and many other unfortunate circumstances. But you can ensure that you sail through trying financial times with Mortgage Payment Protection Insurance. Protect your home and yourself with Mortgage Payment Protection Insurance.
|By: Jordan Hashem
You should consider obtaining a Dallas real estate agent to guide you through the process of buying your new home. A good Dallas real estate agent can really help you through the process of applying for a mortgage, getting a home loan and buying a new home.
There are a few things you can do on your own to make it easier to get a home mortgage to purchase Dallas real estate. The first thing that you need to do when you are thinking about getting a home loan is pay down your debt.
When trying to purchase Dallas real estate, the more debt that you can pay off the better off you will be. The first thing a lender will do is run your credit report when you apply for a mortgage. The lower your debt to income ratio is, the better you will look to a lender. Therefore, you will obtain the best possible interest rate and closing costs. This will give you more option to buying bigger and better homes.
Paying down debt can be difficult while trying to save for the down payment on a home, but there are ways that you can pay your debt down while saving money for a down payment on some Dallas real estate. Take a look at your bank statement and figure out where you spend money. You may be surprised at how much you actually spend on the extras. Write down your set expenditures such as rent and utilities. Decide how much you really need for food and entertainment. Reducing these costs will be where your greatest savings occur. That's why it is important to point these factors out.
Try cooking more at home, as eating out can be very costly. Try using coupons and shopping in bulk. Do you buy lunch when you're working? Buying lunch can easily cost $65 or more per week, so start bring lunch from home. A trip to your local discount store for snacks can easily save 3-4 dollars each day at the vending machine at work. Try drinking the coffee that your employer usually provides instead of stopping at the trendy coffee shops on the way in to work.
These things can easily save you more than $150 per week. You can put $75 per month towards debt and open a savings account and save $75 per month towards the down payment on your new home. There are other easy ways to cut costs so that you can save money for paying off bills and for a down payment on your new Dallas real estate too.
The new trendy consignment shops may be a better option for new clothes than the mall and with gas prices on the rise, try biking or walking more. Saving this money will be very rewarding in the end as you move into your new Dallas home.
Lots of people are looking at acquiring a 2nd investment mortgage property, either for rental purposes or second homes. With so many people looking for a place to rent, the rental business has known a huge growth during the last few years. Of course, in some situations, a second investment mortgage property can be use more efficiently as a second home than a rental property.
1. The Profit
The profit you can get from a second investment property depends a lot on the type of investment you make. Some investors want to have a cash flow during the first year, while others just want positive net worth. The return of the investment is higher when you keep the property for a long time.
2. Deducting the Interest against Income
If you purchase a second property, you can deduct the interest against income. In some situations, even if you are cash flow positive, you will pay less on taxes. Make sure that you consult your tax advisor for further details on how to save on paying interest and taxes.
3. Conforming Rules
The consequences of renting a second property depend upon whether you use property as a residence or not. A 2nd home is used as a residence if you or a member of your family uses it for personal purposes longer than 14 days or 10 % of the number of days you use it for rental. If you use the mortgaged property as a residence and only rent it for 14 days or less in one year, you don't have to report the revenue. Of course, if you rent if 15 days or more in one year, you do have to report the income. If you don't use it as a residence, you have to report the income anyway.
4. Deducting the Interest on a Second Investment Mortgage Property
If you use a mortgage for buying a second house, you can deduct the interest only if you choose itemized deductions. If the mortgage is larger than the fair value of the house, or mortgages for both of your houses exceed $1 million, the deduction could be limited.
For a second mortgage or credit secured by your home, the interest is deducted only if these types of mortgages on your houses don't exceed $100,000. If you itemize deductions, the real estate taxes are also deductible.
Before deciding to purchase a second property you should thoroughly consider both the costs and the revenue associated with this type of investment. Consulting a private investment advisor can significantly improve your chances of making the right decision and maximize your profit.
As we that home equity loan is a type of loan in which the borrower uses the equity in their home as collateral. A homeowner who requires more money in large amounts usually applies for a home equity loan. These loans are sometimes useful to help finance major home repairs, medical bills or college education. A home equity loan creates a lien against the borrower's house, and reduces actual home equity.
Home Equity Loans allow you to free up some of the equity tied up in your house. Not only this, home equity loan allows you as a homeowner to get a loan by using the equity in your home as collateral. The equity consists of whatever funds you have invested in your property in order to own it or improves it. Most of people apply for a home equity loan is to build new home extensions and for adding new interiors. By making improvements or repairs to your home, you can augment the fair market value, and at the same time giving your home a spanking new look. And this doesn’t come in between your plans to re-sell the house soon or continue living there for years, improvements or maintenance of your home really makes a substantial dissimilarity in the total worth of your home.
Another popular way by which homeowners take advantage of their home's equity is debt consolidation. Many people are burdened with credit card debt and a home equity loan can give them the respite that they so eagerly await.
A home equity loan is a loan that you take out against the value of your home. Through home equity loan, a person can borrow money at an interest rate that's less than the rate they are currently paying, thus allowing them to pay off the amount earlier. Also, the interest on a home equity loan may be tax deductible. If you would like more information on home equity loan rates, and how to find the best home equity loan then you must do a deep research or you may contact to any expert.
According to a bank, the next most popular rationale for home equity loan is to buy a car or van purchase, home repair etc. If you are a homeowner then you have huge advantage of taking a loan that is burden less to repay and such a loan seldom drains away your finances unnecessarily. But every secured home loan is not going to give you benefits of such a loan. It is secured home equity loans that are considered as more advantageous in providing host of benefits. You can use the equity build up in home for:
b)Buying a car
e)Paying for tuition fees of child
Most home equity loans require good to excellent credit history, and reasonable loan-to-value and combined loan-to-value ratios. Home equity loans come in two types, closed end and open end.A secured home equity loans are the loans provided on equity in the home that you are pledging as collateral. The lender will first calculate equity and then decide on the loan amount. Equity is calculated buy subtracting a sum that you are yet to pay towards your past loans for buying home, from current market value of home. So the lender will approve a loan that is equal or less than equity.
This is sure shot way of safely lending money. The lender always gets back loan in case of payment defaults as selling home ensures the recovery of the loan. This is one reason that secured home equity loans are source of cheap rate finance. Lenders charge interest on secured home equity loans at lower interest as compared to other secured loans.
Choosing is a very important part of the process of re-financing a home. Understanding the different re-financing options and knowing how each of these options work is very important but none of this matters at all if the homeowner is unable to find a lender who is willing to offer them the rates and terms they are seeking. Choosing a lender can be a long and difficult process but there are some ways to make it easier. One simple way to make it easier is to ask for advice from friends or family members who recently re-financed. Additionally, homeowners can do their own research to determine which lenders are able to offer them the best rate. Finally the homeowner should determine whether or not the finances should be the governing factor in choosing a lender. Surprisingly enough, in most cases it is not.
Ask for Advice from Friends and Family Members
Friends and family members who recently refinanced can be a homeowners most valuable resource in the process of selecting a lender. These friends and family members are so valuable because they will most likely be willing to offer you a quite candid opinion of the lender they used. This opinion may be either positive or negative but in either case it is useful to the homeowner. If the opinion is negative the homeowner can remove this lender from their list of lenders to consider. Conversely if the lender comes highly recommended, the homeowner may consider this lender more carefully.
Homeowners who want to know which lender is offering them the best interest rate and financial terms should do a great deal of comparison shopping. The homeowner may even consider requesting quotes from each and every lender. This should make it perfectly clear which lenders are willing to offer the homeowner more favorable rates. When comparing these quotes all of the factors should be considered to ensure the quotes are being compared fairly. For example each quote should be broken down to determine the monthly savings, total savings, etc. All of this statistical data will make it much easier for the homeowner to make a wise decision when the time comes.
Consider More than Finances
Finally, while interest rates, loan terms and other financial matters are all certainly important none of these are more important than being treated fairly by the lender. For this reason, the homeowner should carefully consider all of their lenders and should determine whether or not they feel as though the lender is responsive to his needs. For example, a lender who does not return calls in a timely fashion or answer questions truthfully and accurately may not be the ideal lender for a homeowner even if he is the lender who is offering the most favorable rates.
Additionally, homeowners should trust their instincts regarding their trust in the lender. Some lenders simply do not appear to know what they are talking about. Homeowners might be inclined to avoid these individuals because they may end up doing more harm than good during the re-financing process. Conversely some homeowners may be immediately impressed by the honesty and intelligence of another lender. In most cases, the homeowner would likely choose the second lender as long as the rates offered by each lender were comparable.
Mortgage calculators can provide you with valuable loan mortgage calculations. A good loan calculator will enable you to make educated decisions about your mortgage loan whether you plan on buying a new home, considering refinancing an existing mortgage loan or just need to know what your mortgage loan options are.
It is very important to base important mortgage loan decisions on sound calculations. Most loan calculators will enable you to do that. There are many different mortgage loan programs and products available - some you may know of and some you may not!
Mortgage and loan calculators are tools to use when you want to know how much a loan will cost you. To use a mortgage calculator is one of the first steps in the mortgage process. First, find out what kind of mortgage works best for you. There are many choices for you. You can chose a fixed rate mortgage or an adjustable rate mortgage. Then use these mortgage calculators to determine the amount of mortgage you can afford. You can also chose to determine your new monthly mortgage payments.
Mortgage calculators can also be used to calculate payments on debt consolidation mortgage loans and see your monthly savings. You can use the the calculator to check how you can refinance the loans you have. With a calculator it is simple to work out how much you can afford to borrow and exactly what your repayments will be using time scales and interest rates.
There are multiple financial factors that go into determining the right mortgage for you. By using a loan comparison calculator you can account for all of relevant factors and get an accurate monthly payment figure. These tools allows you to find a payment plan that enables you to reduce your debt gradually through monthly payments of principal.
In short the mortgage calculator can help you to
- Determine affordable mortgage and produce other valuable information about your loan.
- Decide how much house you can afford based on the income and debt information you supply.
- You can calculate your monthly mortgage payments based on loan amount, interest rates and other loan terms.
- You can calculate extra payments on your monthly mortgage to pay off the loan faster.
- Make comparisons with often several mortgage products, both fixed and adjustable.
- Make amortizations schedules and tables based on the amount and interest.
- Calculate when it makes sense to refinance your home.
When you decide to use a mortgage calculator you will most certainly get accurate and good information about the actual loan. Just to make sure, enter the same figures in another company?s calculator to check that the result is right. The figures are right of course but as an add on you can find that there are other options for a loan with that company. Do several searches to find the best possible. There can be a big difference and you can save very much if you do your calculations carefully.
When you go to get a mortgage you may start hearing the term option ARM thrown around, and you may wonder what one is exactly. An option ARM usually has two primary characteristics: interest rates adjusting monthly and payments adjusting yearly. Traditionally, a borrower can choose the size of the payment that they are required to make. The way you choose is you can usually pick whether you want to pay interest only on your loan or, if you want to pay a minimum payment.
Option ARMs are usually seen as a good deal by a prospective home buyer because they have low payments in the first year of the loan repayment. Some buyers realize that with a lower payment in the initial years they can enter into larger loan than otherwise possible. A minimum payment in early loan years can result in excess cash flow for the borrower as well, if a house well within their budget is involved.
While option ARMs may have very low payments in their first few payment periods, it is important to understand that rates can and will rise rather quickly in a few circumstances. If you elect a low initial rate on the loan, the payments will begin to rise in subsequent payment periods to recoup the lenders principal and interest within the loan term. When you pay less in the beginning of the loan life, the payments will accelerate to compensate for low initial payments. Option ARMs work if you can secure higher income in future payment periods. However, if you don't see expenses dropping or income rising in the future, you should be very careful when setting low rates in the beginning of the loan, because you can expect rates to rise in the future with a static income which may lead to default.
Deciding to enter into an option ARM mortgage should be a well researched decision. Paying very little in the beginning is not the best option for the majority of people. Making payments as large of possible in the first few years is generally advisable so payments don't really start to jump in years after low payments. Always comparing rates from competing lenders is crucial to getting a reasonable rate for the risk that you manifest. Settling on mortgage rates is not a good idea- get multiple rates if possible. While you want a low rate, you don't necessarily want a low rate to translate into the lowest possible payment in the beginning of your ARM, because payments will potentially increase.
Lending institutions generally derive the rate they charge you by adding interest onto some average lending rate. Understanding how to keep this additional cost reasonable is key to making an option ARM manageable. This additional cost to you is know as the margin, and this information is not necessarily going to be relayed or shared with you as it is how the lender makes their profit. The best way to ascertain a reasonable margin for your risk profile is to get quotes from several institutions so you have relative comparisons.
Homeowners who are re-financing their home for the first or even the second or third time should thoroughly research all of the available options to ensure the best possible interest rate and terms are secured. Homeowners are sometimes lazy when it comes to re-financing. There may a large drop in interest rates or a change in the financial situation which warrants a re-finance. Although the homeowner may be aware that a re-finance is warranted, the homeowner may not be aware that it sometimes takes a great deal of work to find the best possible rates and terms.
Homeowners are often inclined to re-finance with the same lender who granted the original mortgage or with the same lender who handled prior re-finances. The theory behind this reasoning is along the same lines as, If it aint broke, dont fix it. These homeowners figure their current mortgage is adequate and they are happy with the current lender so there is no need to investigate further options. However, this cavalier attitude can be quite costly for the homeowners.
Try All the Options
Homeowners who are considering re-financing their home should contact a number of lenders and obtain rate quotes from each of them. When soliciting quotes the homeowners should consider all of their available options but should limit these options to established lender. While a newer lender may be offering fantastic rates and loan terms it is considered quite risky to go with this type of lender as opposed to a more established lender.
Homeowners who wish to further investigate smaller lenders who do not have an established history should proceed with caution. Unless the lender has trusted friends or family members who are willing to vouch for the lender, the homeowner should investigate these smaller lenders carefully. Visiting a website address is not the best way to ensure credibility. Designing a professional looking website is a fairly simple process. Most website designers could design and upload such a website in less than a day.
When comparison shopping for the most favorable rates, homeowners should make it well known that they are shopping around for rate quotes and are not making a decision immediately. Lenders who know they have some competition may be more likely to offer a lower interest rate than they would if they did not think the homeowner was considering other options. Although this may not seem quite fair to the lender, the business of re-financing is a competitive business. Just like a plumber might offer his most competitive rate if he knows the homeowner is seeking estimates from a number of different plumbers, lenders are apt to do the same. They make their money from homeowners and having a homeowner re-finance their mortgage does not help them out at all financially.
Some lenders may think the homeowner is bluffing and may not offer the best rate initially. However, if the homeowner rejects the offer and states they have a better offer with another lender, the first lender may be enticed to offer an even lower interest rate just to see if they can sway the homeowners. While cost is certainly important, it is not the only factor to consider. Some homeowners might re-finance with a lender who offers slightly higher rates if the homeowner feels as though this lender is more responsive to his needs.
|By: Joshua Keen
A reverse mortgage is a type of loan that is available to senior citizens who have a lot of equity in their homes, but little cash on hand. It is literally a mortgage in reverse, where a homeowner is able to access equity locked in their home through a special loan from the bank. This money is paid out either in monthly installments or all at once. There are no monthly costs for the borrower to pay, and the loan becomes mature only when the property is sold or when the homeowner dies. At that time, all interest and fees associated with the loan are due in one lump sum.
For seniors who need money for day-to-day expenses like medications, bills, or travel funds, a reverse mortgage can be a great option.
Other home loans are available, but they require monthly payments, which can be difficult for some seniors to afford. This is one of the reasons that a reverse mortgage can be a good fit for some people; not only can they free up some cash from their home equity, but they can do so without adding to their monthly expenses.
On the downside, because the money for this type of loan comes out of the home equity, a reverse mortgage can affect the amount of inheritance that beneficiaries will receive. When the property is sold (or at the time of the owner's death), the bank takes back all monies owed to them, leaving what's left over to the borrower. The more money taken out on a reverse mortgage, the less money will be left for the heirs of the estate. Fortunately, there is a limit to how much can be owed. When the property is sold, if the proceeds from the sale are lower than the amount still due on the loan, the bank will eat the difference.
In order to qualify for a reverse mortgage, the borrower must be 62 years of age or older, use the property as their primary residence, keep their home in good repair, and must have paid off all or most of their mortgage. If there is an outstanding balance on the mortgage, it must be paid in full with funds from the new loan.
If possible, a better solution is to sell the property and downsize to a smaller home or apartment. This would allow the homeowner to live off the profits from the sale, without owing anybody anything. However, this is not a viable option for everyone, especially in a slow real estate market.
A reverse mortgage can bring great relief to seniors, but this type of financing is not the answer for everyone. The costs involved with this type of loan are quite high in the beginning, although the borrower won't be impacted by it on a month-to-month basis. If the homeowner doesn't plan on staying in the house for very long, the costs of taking out this type of loan can be too great for it to be practical. Some fees must be paid for upfront (using money from the loan), and closing fees can be higher than with other types of financing. A homeowner should only consider this type of loan if she is planning to stay in the house for a long time. If she's at all unsure about her plans, it may be a better idea to take out a different type of home loan, or to look into the option of selling the property.
Because predatory lenders often target seniors, the government has made it mandatory for all those interested in acquiring a reverse mortgage to speak with a qualified third party advisor. This will ensure that the borrower is doing what is in his best interest, including choosing a reputable lender with which to do business.
Your FICO score will be a determining factor in the setting of the interest rate on your mortgage. Put simply, your FICO score is a risk rating on you, the borrower. Data related to your financial responsibility is aggregated by institutions that you do business with, and it is this data that comprises your FICO score or credit score. So what exactly makes up your FICO score and how will it affect your mortgage interest rate and your monthly payments?
There are five basic components with respective percentages that make up your FICO score. They are payment history 35%, amounts owed 30%, length of credit history 15%, new credit 10%, and types of credit used 10%. As indicated by the aforementioned percentages, payment history carries the most weight in the composition of the score. Mortgage lenders need borrowers with exceptional payment histories so they can forecast future profit. To secure future profits, a lender needs to know that borrowers will be able to pay well into the future. The servicing of past debts is an excellent predictor of the servicing of future debts; consequently, if you have been on time with the vast majority of your debt payments in the past, you will be a profitable consumer into the future, and therefore an acceptable mortgage risk.
Payment history does not just include the payment history on prior mortgages. It includes a long list of financial data; everything from the most obvious-credit cards- to the not so obvious, such as how completely you fulfilled your promises of repayment on a past due shopping credit line. Data that is an extension of direct financial transactions will also be included in the payment history component of your credit score. Examples of this data are liens, garnishments, judgments, and bankruptcies. Understanding how to build a complete profile of yourself, by yourself, is crucial to your financial success in the 21st century. If you entered a financial transaction with credit or an account held by computer data bases, any and all of this information will be used by lenders to asses you as a risk to profitability.
Amounts owed comprises 30% of your credit score, and even if lenders don't directly use the variables that constitute the amounts owed on a FICO score they will definitely be using some measure of your current debt and servicing of that debt to determine if they will be paid in full and on time. Before taking out a mortgage, paying off as many debts as possible is a great idea. Being less of a risk is quite desirable and will allow you to shop around for the most competitive rates. Your credit score is a good indicator of you as a risk to a lender, and accordingly institutions will use it as a way to set your mortgage interest rate, and consequently your monthly loan amount. A common analysis, used to illustrate the vast difference in rate and payments terms, on a loan, is to analyze a $300,000 loan and what a good credit score and a bad credit score would have to pay.
On a $300,000 loan, a 760-850 credit score can expect to pay about 5.5% and a $1,700 monthly payment. A credit score of around 500 can expect to pay approximately 10% and $2,600 per month-quite a difference in monthly payments.
|By: Emil Emilov
I hope you're going to enjoy the following article on investing in real estate. If you want to know more visit my website.
Imagine the scenario. Months into your grueling house search, you have finally found The One. The location is right and the home and property fulfill your wish list to a T. You have already unpacked your boxes and stretched out on your expansive deck...in your imagination. The only thing standing between you and your dream home is the paperwork. And you've already pre-qualified for a mortgage, how hard could it be? All the stars are aligned and it's time to make an offer.
Not so fast. Another family has already begun envisioning their own version of life in your dream home. Dad is grilling steaks on your dream deck while the family dog pounces through your beautiful kitchen. The only difference between yourself and the competing buyer? The other family has been pre-approved for a home loan, and places an offer on the home right away.
The difference between being "pre-qualified" and "pre-approved" warrants clarification. First, it is important to understand that neither being pre-qualified or pre-approved guarantees financing for a home. Pre-qualification means that someone, perhaps your real estate agent or lender, has informally taken a look at your finances and deemed that you are likely a good candidate to qualify for a home loan of a certain amount. Bear in mind that pre-qualification is based on information you provide that has not been verified, and in no way guarantees that you will actually qualify for a loan in the amount specified. So if you are not guaranteed financing based on the amount for which you pre-qualify, of what use is being pre-qualified? Getting pre-qualified can be a good start for home buyers who have no idea of what price range they can afford. Having a general idea of the loan amount for which a home buyer may qualify helps real estate agents and home seekers narrow down the pool of potential properties significantly.
Getting pre-approved for a home loan takes the process a step further, and will give you a more accurate number to work with during your home search. Your credit report and income will be reviewed before you are pre-approved, giving the lender a more accurate impression of your financial status as compared to your word alone. Believe it or not, it is not uncommon for potential home buyers to stretch the truth about their financial status in order to be pre-qualified for a larger amount. Doing so only leads to wasted time and money looking at homes that are economically unfeasible, an undesirable scenario for all parties involved.
Shopping for a home is often a long, involved process. The last thing you want when you finally discover the home you want to purchase is to lose it to another, more prepared buyer. Being pre-approved gives you information about the maximum loan amount for which you will likely be approved, as well as the interest rate you can expect. Knowing a maximum loan amount and your probable interest rate allows you to calculate with more accuracy what your monthly mortgage payment would be for a particular home, a major factor in determining what home you can comfortably afford. Being pre-approved for a home loan can give you advantages in negotiation as well; sellers may be more inclined to accept your offer because of reduced uncertainty, and you may be able act quicker than another buyer since several steps of your application process have already been completed.
|By: Ben Horne
As you start your search for a mortgage, there are a few questions you need to ask yourself in order to narrow your search and know what you're looking for. Unfortunately, the answers to those questions aren't always easy. For some honest mortgage advice on the answers to your mortgage questions, keep reading.
Fixed Rate Mortgage or ARM?
If you plan to stay in the house you're planning to purchase for longer than 7 years or simply want stability in your monthly payments, pick the fixed rate mortgage if you can afford it. A fixed rate will allow you consistent payments month-after-month for the duration of the mortgage loan.
Alternatively, an ARM (Adjustable Rate Mortgage) is great for families who know they'll be out of their house in less than 7 years. Before you take on an ARM, ask your lender what your worst case scenario would be based on your annual rate adjustment cap. Make sure you could financially handle a potential sharp spike in your monthly mortgage payments.
How Large Should My Down Payment Be?
Ask yourself how much of an interest rate reduction you'll get with a higher down payment and whether a lower down payment will result in having to pay expensive private mortgage insurance. Mortgage insurance is often required by the lender to cover their risks when the buyer's down payment is too low.
Typically, investing in a larger down payment results in a return on the investment that's equal to the mortgage interest rate. Now, if dropping your down payment puts you in a different category (for example, below 20% or below 5%) that can affect the return significantly.
Do I Want an Interest-Only Mortgage?
An interest only mortgage offers homeowners an option to pay only interest, but for a specified period of time. This results in a lower required monthly payment and the buyer is still free to make payments on the principal.
Interest only mortgages should only be used though by borrowers who actually need them. For example, a good candidate might be a freelancer or contractor who has a fluctuating income and wants the freedom to make extra payments on the principal while still having a smaller monthly commitment.
Other examples include individuals who need the cash flow for high-yielding investments (earning more than 9% over the long term) or families who are expecting to make higher incomes in a few years, at which point they can begin making some significant principal payments.
Should I Accept a Pre-Payment Penalty?
A pre-payment penalty is a clause in your mortgage agreement that says you'll pay a penalty if you pay off the mortgage too early or seek to make extra payments. On the surface, you might assume the lending institution would welcome the faster repayment of its loan. However, doing so actually results in some financial loss through lost interest payments.
Typically, prepayment penalties disappear after a few years. If you opt for a fixed rate mortgage and plan to remain in the house for a long time, you can often exchange a pre-payment penalty for a lower rate!
Everyone is talking about the great mortgage meltdown and its effect on the real estate market. For the most part, the news is bad, particularly for those who already own property and are trying to sell it. However, there is one group of home buyers and property owners who can actually benefit from the current situation.
The mortgage meltdown has gotten so serious that the banks and the government cannot ignore it. They have to do something and one of the things they have to decided to do, is to raise the limit for both FHA, government insured financing and for what is known as conventional financing and conforming loans.
Conventional financing is arranged through banks, savings and loans and mortgage companies. Unlike FHA VA loans, they are not insured by the government. Conventional loans fall into two categories, Conforming loans and Jumbo loans. Conforming loans can be sold to Fannie Mae or Freddie Mac, the two giants quasi independent, government chartered agencies which exist specifically to buy loans from banks and other lenders, creating liquidity in the mortgage market.
Until recently, Conforming loans have to be for $417,000 or less. Any loans above $417,000 were considered Jumbo loans. They could not be sold to Fannie Mae or Freddie Mac and so they cost more. Borrowers pay higher interest rate and they often paid more points or fees to get Jumbo loans. Then, with a mortgage crunch hit, it was almost impossible to get jumbo loans without paying absurdly high fees. This left a lot of would be homebuyers and homeowners who wanted to refinance, out in the cold.
Now, the government has stepped in to do something about it. Not only is the limit for Conforming Conventional loans being raised from $417,000 to $750,000, but the limit for FHA insured home loans, which was only $365,000, is also being raised to $750,000. This will enable tens of thousands, possibly hundreds of thousands of people to buy a home or refinance a home of affordably, so perhaps there really is a silver lining to every cloud after all.
|By: Rony Walker
Increase Your Cash Flow
So how do you increase your cash flow? You can do this by giving a boost to the value of your investment properties. You can achieve this by working on some sophisticated home improvements. By increasing the value of your properties, you earn more leverage in terms of rental prices.
Go on ahead and extend the size of your house or apartment. Or you can simply add a bit of sophistication to the interiors. You can remodel and upgrade the kitchen. Or you can work on the outdated receiving areas. You can do some repainting to make the place look as good as new. You can even go as far as replacing the roofs, the flooring, and the cabinetry. Of course, you must not forget the exteriors.
Watch your simple apartment turn into a sophisticated bachelor's pad. Or you can turn the house into a vacationer's villa and watch the cash flowing in.
Purchase Additional Investment Properties
You can even go beyond sophisticated home improvements and purchase additional investment properties. You know that you will never go wrong by investing in real estate for your properties are guaranteed to appreciate in value in the coming years.
Getting the Cash
Now where do you get the cash for all these? The answer is simple. All you have to do is to cash-out on the increased value of your property's equity. How is this possible? You will find the answer in a refinance home loan.
You see, property value has been on a consistent rise over the years, guaranteeing an increase on your equity. Consequently, your property is mortgaged under its current market value. Through a cash-out refinance home loan, you tap into the increased value of your equity and gain its monetary equivalent.
Now you can use the money for your planned home improvements and additional investments. This way, you increase the market value of your properties and your cash flow too.
You can also use the cash to fund other major expenditures. A lot of people rely on their refinance home loan to finally get that long-planned holiday vacation trip. Others use the cash to buy a brand-new car. While there are those who rely on the cash they get from refinance home loan to send their kids to college.
Or you can use the cash to pay for your burgeoning debts. You can do this by consolidating your debts into a single, more manageable mortgage loan. Through a refinance home loan, you transfer from unsecured loans to a secure one. This allows you to take advantage of lower interest rates. With lower interest rates come lower monthly payments. The result - a more manageable financial situation that is guaranteed to help you prosper.
There are a number of benefits which may be associated with re-financing a home. While there are some situations where re-financing is not the right decision, there are a host of benefits which can be gained from re-financing under favorable conditions. Some of these benefits include lower monthly payments, debt consolidation and the ability to utilize the existing equity in the home. Homeowners who are considering re-financing should consider each of these options with their current financial situation to determine whether or not they wish to re-finance their home.
Lower Monthly Payments
For many homeowners the possibility of lower monthly payments is a very appealing benefit of re-financing. Many homeowners live paycheck to paycheck and for these homeowners finding an opportunity to increase their savings can be a monumental feat. Homeowners who are able to negotiate lower interest rates when they re-finance their home will likely see the benefit of lower monthly mortgage payments resulting from the decision to re-finance.
Each month homeowners submit a mortgage payment. This payment is typically used to repay a portion of the interest as well as a portion of the principle on the loan. Homeowners who are able to refinance their loan at a lower interest rate may see a decrease in the amount they are paying in both interest and principle. This may be due to the lower interest rate as well as the lower remaining balance. When a home is re-financed, a second mortgage is taken out to repay the first mortgage. If the existing mortgage was already a few years old, it is likely the homeowner already had some equity and had paid off some of the previous principle balance. This enables the homeowner to take out a smaller mortgage when they re-finance their home because they are repaying a smaller debt than the original purchase price of the home.
Some homeowners begin to investigate re-financing for the purpose of debt consolidation. This is especially true for homeowners who have high interest debts such as credit card debts. A debt consolidation loan enables the homeowner to use the existing equity in their home as collateral to secure a low interest loan which is large enough to repay the existing balance on the home as well as a number of other debts such as credit card debt, car loans, student loans or any other debts the homeowner may have.
When re-financing is done of the purpose of debt consolidation there is not always an overall increase in savings. Those who are seeking to consolidate their debts are often struggling with their monthly payments and are seeking an option which makes it easier for the homeowner to manage their monthly bills.
Additionally, debt consolidation can also simplify the process of paying monthly bills. Homeowners who are apprehensive about participating in monthly bill pay programs may be overwhelmed by the amount of bills they have to pay each month. Even if the value of these bills is not worrisome just the act of writing several checks each month and ensuring they are sent, on time, to the correct location can be overwhelming. For this reason, many homeowners often re-finance their mortgage to minimize the amount of payments they are making each month.
Using the Existing Equity in the Home
Another popular reason for re-financing is to use the existing equity in the home. Homeowners who have a considerable amount of equity in their home may find they are able to cash out some of this equity for other purposes. This may include making improvements to the home, starting a business, taking a dream vacation or pursuing a higher degree of education. The homeowner is not limited in how they can use the equity in their home and may re-finance a home equity line of credit which can be used for any purpose imaginable. A home equity line of credit is different from a loan because the funds are not disbursed all at once. Rather the funds are made available to the homeowner and the homeowner can withdraw these finds at anytime during the draw period.
|By: Michael Stazko
It is recommended that you work with a mortgage broker or a mortgage lender before you shop for a house. You don't want to end up falling in love with a home and then finding out you can't afford it. Getting pre-qualified or pre-approved for a loan can help you decide what price range fits your situation. So what's the difference between a mortgage broker and a mortgage lender?
A mortgage broker is basically a retail seller of a loan. They get paid a commission from the lender and a service fee from you. The service fee can include an origination fee, a processing fee, a closing fee, and/or points on the loan. The fees will be listed on the documents you sign at the title company, on the day of closing. The advantage of using a mortgage broker is that they have information on a wide range of lenders and loans that can fit your needs. A mortgage broker's obligation to his/her customer is to find the best rate possible and make sure all the documents are prepared by the closing date. To do otherwise could cause the mortgage broker to lose customers and tarnish their reputation with other real estate professionals.
A mortgage lender is the actual institution servicing your loan. A lender could be a bank, a credit union, or a quasi-government company like FNMA or "Fannie Mae". Sometimes a lender will sell the loan to the open market, but still continue to service it. The fee of a lender is typically less than that of a mortgage broker. The mortgage broker, however, might find you a better rate because they are not bound by the policies of one institution. It is, therefore, debatable that going directly to the mortgage lender for a loan will save you money.
Then who should you use? The answer is easy. Find the one who gives you the best deal. All mortgage brokers and mortgage lenders should tell you their fees upfront, so shop around. It is also a good idea, in some instances, to use a lender referred to you by your realtor. Realtors work with lenders all the time and yours might have a good feel for one that is reliable and honest. In the end, though, you should use the mortgage broker or mortgage lender that is right for you.
|By: Paula Cherrist
For nearly all homeowners who have a mortgage on their house or condo, they dream of the day when it is finally paid off in full. Having that legal document in hand that says you are free of debt and the property is in your name is an extremely satisfying life-long goal for many people. Mortgages and the accompanying monthly payments are just part of the home buying process, and thus part of most adult lives. Unfortunately for some, various factors in life such as a market downturn, job loss or increase in payment amounts can spell disaster and end up in foreclosure. If you are in a financial position to do so, there are a few ways you can pay off your mortgage faster.
Before you even consider paying off your mortgage early, you need to realize that not everyone considers doing that a good idea. If you have a very low interest rate on your loan, some people would advise that you take the money you would otherwise use to pay extra on your mortgage and invest it, which would in turn earn even a small income or profit. There is also the argument that you could use the extra money to renovate your home or condo or just make a few improvements, thus increasing the overall value of the property and making it nicer for you to live in as well.
You also have to weigh whether or not you'd be happier by paying off your mortgage sooner or by having the extra money to spend in the present. Then you also have to consider the fact that unforeseen circumstances can arise such as illness or unexpected expenses and it always pays to have a financial cushion to fall back on during rough times. And of course you also have that handy tax deduction along with your mortgage. But if you do decide you'd like to be free of your monthly mortgage payments sooner, then you can do so by taking a few proactive steps right now.
The first and probably most simple thing you can do is to either increase the amount of your monthly payment or make biweekly payments. Be sure to discuss this with your bank or loan company because there may be restrictions on the number of additional payments you can make or limits on the extra dollar amount. By requesting that the extra payment you make be applied to the principal of your mortgage you can knock off between 5 and 10 years and a huge amount of interest on a 30 year mortgage.
Even if you have just bought into a pre-construction development and haven't even moved in yet, it doesn't hurt to consider all your options. One of the most widely publicized developments right now is the http://www.bestchicagocondos.com/pre-construction-condos/chicago-spire-2.html, and the developer is requiring 15% down with each contract to buy, which is a little more than most other new projects. That reduces your amount owed, and if you can afford the $750,000 to $40 million that a unit there will cost, you might not be overly concerned about shortening the life of your mortgage. But in reality, the amount saved on any loan is a bonus for you.
It's also important to speak with your loan officer and find out when they apply your payments. If the extra payment you send isn't credited until the next month, then you not only lose out on saving interest on the current month, but also on any interest that money might have earned in your savings account. Time your payments so that they are applied the month you send them. Be sure to have any extra payment go towards the principal and not just deducted from your next month's payment. And make absolutely certain that your bank or loan company doesn't charge a service fee for processing that extra payment.
Another option is to make a lump sum of balloon payment once or twice a year if you are permitted to do so. To save up for that amount you can earmark your tax return, any bonus you receive at work or profit sharing dividends. Something as simple as forgoing that $4.00 mocha latte on the way to work may sound like pocket change but will add up to some big savings in interest over the long run if you add it to your payments.
If you have a 30 year mortgage and are confident that you can handle higher monthly payment over the long run, you might consider refinancing for a 15 year fixed rate mortgage that has lower interest rates. Just be sure that the higher payments are doable because you'll be held accountable if you can't muster up the extra money each month, as opposed to only answering to yourself if you miss a self-imposed extra payment.
Don't be discouraged if you can only add $10 or even $5 extra dollars to each payment. It's that much more towards your goal of paying off your mortgage and you should congratulate yourself on it. It all adds up over time.
Debt collectors Information, debt collector is a term for a licensed bill collector and debtor is term for person in debt which is secured or unsecured debt
get out of debt, how can you be debt free
credit card debt and all other unsecured debt
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