There are many banks, credit unions and other lenders out there who would love your monthly mortgage payments. So talk to everybody and don't be money-shy! Talk to your banker, other banks and people you know. Real Estate Sales representatives can be very knowledgeable about mortgages and have lots of good advice.
Talk to a mortgage broker: Mortgage brokers are another great resource. Their business is finding you a low mortgage rate. They’re highly motivated to get you the best deal.
Mortgage terminology Mortgage term:
Amortization: The length of time it will take you to pay off the whole mortgage, often as long as 25 years. The longer your amortization, the lower your monthly payments, but the more you pay in interest over time.
Interest rates: Interest is the cost of borrowing money, That interest rate not only affects how much you pay, it also affects how much you can borrow. So it is vital to find the best rate.
Down payment: Your goal should be a small mortgage as possible, which means making the biggest down payment possible. Just remember you need money for all other fees and expenses associated with buying a home. Not to mention moving, repairs, renovations, new furniture... it can add up, so think ahead and be wise.
The Home Buyers' Plan: If you're a first-time homebuyer with money in an RRSP, you can withdraw up to $25,000 without paying any income tax. If your spouse is also eligible, that's $50,000. Ask me how to best take advantage of this plan.
What you need to apply for a mortgage
* Letter of employment confirmation (include your position, your pay and how many years you've been with the company)
* List your assets (your car, stocks, bonds, GICs, etc)
* List your liabilities (car payments, student loans, credit card debt, etc)
* Your ID’s Social Insurance Number, passport, landed papers
* Your banking information
* Your lawyer's contact information
* Information about the house you want to buy
Cost Associate with obtaining a mortgage
* Application fee: Some mortgage lenders charge a fee to process your application. But ask to see if you can get it waived.
* Appraisal fee: Your mortgage lender may need to have your new home appraised by a professional, and they often pass the bill on to you. Sometimes your lender will also waive this fee.
* Mortgage broker's fee: Your mortgage broker may charge a fee that's payable on your closing date. Ask your broker to avoid surprises.
* Land survey fee: Lenders may require a survey of your property, even if it's an existing survey. Get your lawyer on the case.
* Home inspection fee: A home inspection is so important; we will discuss it in more details in the Home inspection suction.
* Home Insurance: Mortgage lenders require you to carry fire and extended-coverage insurance because your home is the security deposit on the mortgage.
* Title insurance: It's not mandatory, but protects you from all sorts of fraud and potential errors surrounding the title to your land. Your lawyer will be the best souce to ask for more details on this topic.
* Legal fees: You'll pay your lawyer for their invaluable time and "disbursements" which are the costs involved in title searches, drawing up the title deed, and preparing your mortgage.
* Adjustments: The previous owner may have paid property tax or utilities in advance, and they want to be credited for those payments. Ask me or your lawyer what might come up on the closing date.
* Maintenance and utility costs.
* REALTOR® Commissions or fees: REALTOR® commissions or fees are subject to GST/HST.