Refinancing Your Mortgage in Ontario – Top 3 Mortgage Refinancing Tips from the Mortgage Centre Mississauga

Refinancing your mortgage in Ontario can be the perfect solution to various financial issues you may have, including getting rid of debt or paying for things such as home renovations or your child’s tuition. Mortgage refinancing can get you the capital you need to finance these things. 

Are you thinking about refinancing your mortgage but unsure about the path to take? Use these three important mortgage refinancing tips from The Mortgage Centre to help you decide which route best suits your current and future financial goals. 

Mortgage Refinancing Tip #1: Develop a strong relationship with your local mortgage broker. In the past, banks were the major financial institutions that most people went to for financial advice and assistance. However, today there are so many different options out there that it is crucial to explore. One of the greatest sources for financial security and freedom is a mortgage broker, and once you have found one it is a great idea to establish a good relationship with them. Their expertise can help in so many different areas, be it the acquisition of your first mortgage, paying off debt, or refinancing your mortgage. 

In the case of mortgage refinancing, it is often your mortgage broker – not the bank – that can and will secure you the best interest and mortgage rates, as well as finding alternative sources of funding if the bank chooses not to approve you.  It is beneficial to depend on a professional mortgage broker when your financial best interests are at stake.

Mortgage Refinancing Tip #2: Get a credit report check. Before applying for mortgage refinancing, it is a good idea to know where you stand as far as your credit. If your credit score is great, your mortgage broker will have no problem securing you great rates when refinancing your mortgage. When refinancing your mortgage in Ontario, a credit score of 680 is considered good.

If however, you have less than perfect credit, your mortgage broker will go through your various options and not only find you funding, but help you rebuild your credit. Being prepared by knowing your credit score will help you to understand that you may be paying a higher interest rate, and to know that you should ask for help with budgeting and debt payment strategies.

Mortgage Refinancing Tip #3: Using an online mortgage calculator, evaluate different amortization periods and assess how they impact mortgage payments.  Rather than going into the bank and taking the first offer you are given – which is usually based on an amortization period of 25 to 30 years - being prepared and knowing what different terms offer can save you thousands of dollars in interest. A shorter amortization period may carry slightly higher monthly payments, but in the end you are paying it off much quicker and saving your money.

Being prepared before refinancing your mortgage in Ontario can mean the difference between money in your pocket and money in the bank’s. You work hard for your money, so take the time and do your homework. Use these tips to guide your search for the best mortgage refinancing you can get.

For more information on mortgage refinancing in Ontario or to get more mortgage financing tips, please contact Paul Mangion at The Mortgage Centre by calling 416 204 0156 or visit www.themortgagecentretoronto.com

Qualifying for a Mortgage in Ontario

Most people aspire to own a home. To be able to own a home involves discipline because you have to save your down payment and closing costs and then you also have to be able to ensure that you can obtain mortgage financing. Qualifying for a mortgage in Ontario is a process that requires preparation. 

Many people think that to get approved for a mortgage is as simple as obtaining a mortgage pre-approval. Obtaining a mortgage pre-approval does not mean that you will eventually be approved for a mortgage and once approved for a mortgage you will have to satisfy a number of conditions in order to have your mortgage closed (or be funded).

All a mortgage pre-approval does is say that based on a preliminary review of your application, the financial institution believes that you qualify for a mortgage based on the information that you provided.

Once you find the home that you want to purchase the financial institution will have to approve the property you are purchasing, the purchase price, your credit and then they will issue a formal mortgage approval.

Qualifying for a mortgage in Ontario will mean that you must have decent credit (650 credit score or better), and your income and debt must fall within CMHC guidelines. Your housing payments on your new home must not exceed 32% of your gross income and your payments to housing and debts must not exceed 42% of your income.

After qualifying for a mortgage and obtaining a formal mortgage approval, the mortgage approval will be subject to conditions. These conditions will include proving your income, proving your down payment, proving that you have obtained home insurance and more. This is where people sometimes run into struggles.

Self-employed individuals will often apply for financing but then later be asked for documentation to substantiate their income that will be difficult to obtain. This is very common with people who are sub-contractors. Generally banks will ask a self-employed individual to provide several years of tax returns and their net income after writing off their expenses, which may be less than what they initially indicated on their application. In addition, if the income stated was based on the previous year but in years previous to that there was less income, the bank will average out the income which could impact the mortgage approval.

Where down payments are concerned the homeowner will have to show the down payment money has been in the borrower’s bank account for at least three months prior to the mortgage approval. You cannot borrow your down payment. Sometimes people plan to borrow their down payment and don’t realize until after they have made an offer that this is an issue.

To ensure that you qualify for a mortgage that will close your best bet is to work with a mortgage broker who can review your application and who will ask you for your supporting documentation. This way when you are told that your mortgage is approved you know that it will close and can enjoy a stress free mortgage closing.

For more information about qualifying for a mortgage in Ontario please call Paul Mangion at 416-204-0156 or visit www.gtamortgagematters.com.

Ontario Mortgage Amortization Calculator – How to Use Them Effectively

If you are thinking about buying a home in Ontario the best way to figure out how much of a home you can afford to buy is to use an Ontario mortgage amortization calculator. There are many mortgage amortization calculators available online on various websites including the banks websites. 

Before using the Ontario mortgage amortization calculator to calculate your payments, first consider how much of your income can be allocated towards a mortgage payment. In Canada, any time a purchaser wants to purchase a home with less than a 20% down payment and finance their mortgage through the bank, CMHC must approve their mortgage for high ratio insurance. CMHC guidelines state that no more than 32% of the home buyers gross income can be consumed by housing payments. Housing payments are comprised of the new mortgage payment, the property taxes and include $100 for heat.

If you take your gross monthly income, multiply it by 32% and then subtract an estimated monthly amount for property taxes and heat, the amount left over is your maximum allowable mortgage payment under CMHC mortgage guidelines.

Now when you open an Ontario mortgage amortization calculator you will see 6 fields. You will be prompted to enter the amount of the mortgage, interest rate of the mortgage, interest compounding period, payment frequency, term and amortization. Enter a mortgage amount, interest rate and choose monthly for your payment frequency. When indicating how the interest will compound; if you plan to take out a variable rate mortgage select “monthly compounding”, if you plan to take out a fixed rate mortgage select “semi-annually compounding”. CMHC will high ratio insure a maximum amortization of 30 years, so that is the maximum amortization you can place in the amortization field.

Next you will click calculate on the Ontario mortgage amortization calculator. Compare the monthly payment to the monthly payment you calculated based on CMHC lending guidelines. If the payment is lower than the one you calculated based on CMHC lending guidelines then this indicates that you can either obtain a higher mortgage or if the amount you indicated was based on the amount you want to spend already you can reduce your amortization to see how much faster you can get paid off.

If the payment on the Ontario mortgage calculator is higher than the one you calculated based on CMHC lending guidelines then to obtain the size of mortgage that your calculation was based on will mean that you have to make a larger down payment.

Some websites offer an Ontario mortgage calculator that is called a “maximum mortgage estimator”. This Ontario mortgage calculator enables you to input the amount of monthly payment that you can afford to pay and then will tell you the maximum mortgage that you qualify to finance again based on CMHC guidelines.

The reason Ontario mortgage calculators are important is because they enable you to get an idea of what you actually qualify to finance before you go out shopping for a home. There is nothing worse than finding your dream home only to learn that you can't afford it.

For more information about how to use an Ontario mortgage calculator or to see if you qualify to be pre-approved for a mortgage please contact Paul Mangion at 416-204-0156 or visit www.gtamortgagematters.com.

The Mortgage Centre Mississauga Top 3 Mortgage Financing Tips for 2012

With the Holiday season and New Year right around the corner the Mortgage Centre Mississauga is happy to publish our top 3 mortgage financing tips for 2012.

Mortgage financing tip number 1 - Your bank is not the only game in town.

Many individuals are misguided and think that the bank is the only place to obtain a low interest mortgage. Some think that when their bank declines them for mortgage financing, that it is a sign that they have credit problems. More times than not the bank simply has very conservative lending practices and if you fall an inch outside of their guidelines, you may be declined.

Mortgage financing tip number one is to develop a relationship with a good local Mortgage Broker who can access other funding sources like trust companies, credit unions and mortgage investment corporations. The institutions often offer mortgage interest rates that are comparable to the bank’s mortgage interest rates and won’t make you jump through hoops to get a low interest mortgage approval.

Mortgage financing tip number 2 – If you are using your new mortgage to pay off debt, pay attention to your mortgage amortization. Many people who refinance their home to consolidate debt, make the mistake of extending their mortgage amortization back out over 25 to 30 years. Sometimes a mortgage broker or bank will re-arrange your mortgage this way, assuming that’s what you want.

Ask lots of questions. A mortgage amortized over 20 years will not bear that much greater of a payment than a mortgage financed over 25 years. When you look at all the money you will save on monthly payments as a result of consolidating your debt, there may even be enough savings to reduce the amortization that is left on your mortgage which will see you get your home paid off much faster.

Mortgage financing tip number 3 – Variable rate mortgages are still a favourable choice when obtaining mortgage financing. Mortgage interest rates in Canada are still at historic lows. Ride the low interest mortgage rate wave while you can. Some folks fear variable rate mortgages because they know that if interest rates increase, so will their mortgage rates. Many lenders who offer variable rate mortgages offer an option to lock-in. This means that if mortgage interest rates go up, you can lock into a fixed rate mortgage at any time.

If you are thinking about refinancing your mortgage, the end of the year is a better time than ever to do it. People who list their homes over the holiday season will often list for less because so many folks are pre-occupied with the holiday season so there is less demand. This is a perfect opportunity to get a great deal on a home. If you were thinking of securing mortgage financing to consolidate your debt, you are in a position to start the New Year with a single low monthly payment.

We at the Mortgage Centre Mississauga wish your family all of the best in the upcoming holiday season and the New Year and hope that you have found these top 3 mortgage financing tips useful.

For more information about the Mortgage Centre Mississauga and our top 3 mortgage financing tips for 2012 please contact Paul Mangion by calling (416) 204-0156 or by visiting www.gtamortgagematters.com.