Canadian Mortgage Refinancing can be complex and the lowest interest rate doesn’t mean that you have the lowest interest mortgage. A mortgage involves a mortgage term, mortgage amortization and interest rate. Each will impact the amount of interest that you pay on your mortgage.
Mortgage interest compounds. There are several different ways that mortgage interest can compound and they are daily, monthly, semi-annually and annually (to name the most common frequencies to which mortgage interest can compound). For example, line of credit interest will almost always compound monthly (12x per/year), whereas conventional mortgages will often compound semi-annually (2x per/year). The more frequent the interest compounds, the more interest you pay. If a bank offered a 6% interest rate compounded monthly or a 6% interest rate compounded semi-annually, you would pay more interest in the example where the interest compounded monthly.
Some mortgages are “interest only” meaning that the monthly payments are calculated based on you only making interest payments monthly and interest only mortgages often compound monthly. Lines of credit and interest only mortgages offer the least likelihood of paying down your mortgage, unless you pay much more than your minimum monthly payment each month.
An ideal mortgage is one where the interest compounds semi-annually or annually and involves a monthly payment that pays both principal and interest. Usually a fixed rate mortgage will involve and interest rate that compounds semi-annually whereas a variable rate mortgage will often compound monthly.
Your mortgage term is the amount of time that your interest rate is guaranteed. This can be a double edge sword because locking in for a long time will ensure that your interest rate is secured but if interest goes down, the interest rate on your mortgage will not. With mortgage interest rates in Canada being at all-time lows many folks opt for variable rate mortgages that offer an option to lock in.
Your mortgage amortization will dictate how long you have to repay your mortgage. If you want to pay the lowest mortgage interest, well, the lower your amortization, the less mortgage interest you will pay. You don’t have to take out a mortgage that is amortized over 30 years. Plan your budget and mortgage payment based on a 20 or 25 year amortization and you will save thousands of dollars in interest overall.
Canadian mortgage refinancing can be negotiated at interest rates and terms that gives you the most for your borrowing buck but should be planned carefully. A local mortgage broker will almost always understand real-estate in your area and what mortgage products are available. You don’t want to end up with a mortgage where you think you have the lowest mortgage interest rate but are not actually paying the lowest mortgage that you could be.
You work hard for your money and you deserve to have a mortgage that will provide you with a great mortgage interest rate and terms that you can live with. This will not just come to you, you have to be informed and look around to find it.
For more information about Canadian mortgage refinancing, how to get the lowest mortgage interest rate and actually pay the lowest mortgage interest visit www.gtamortgagematters.com or call Paul Mangion at 416-204-0156.
Tuesday, October 25, 2011
Monday, October 17, 2011
Canadian Mortgage Refinancing Part 3 – What Does it Mean to Refinance Your Home or Get a 2nd Mortgage?
Canadian Mortgage refinancing could be the refinancing of a first mortgage or it could be a new second mortgage. Any time you own your home and obtain new mortgage financing, it is considered mortgage refinancing. The question is with all of the choices available it is often unclear which is the best choice?
Refinancing your first mortgage can be a good choice but can also carry negative implications if it is not arranged properly. The longer you agree to repay debt, the more money the bank earns. For example, if you have 19 years left on your mortgage amortization, many financial institutions and brokers will quote your new mortgage based on a 25 year or 30 year mortgage. This may save you a couple of hundred dollars per/mo. When you look at the amount that you are paying to debt and what the mortgage would look like if amortized over the 19 years as an example, a mortgage refinance keeping your existing amortization at the 19 years will in many cases still free up a significant amount of cash flow and save you a significant amount of interest.
Refinancing your first mortgage carries many benefits. More and more folks are choosing second mortgages as an effective way to keep their consumer debt separated from their first mortgage debt. This is the best way to see that you actually pay off your first mortgage. Choosing to refinance your home and get a second mortgage provides a lot of flexibility, but the bank in this case will often recommend a line of credit or that you amortize your new second mortgage over 20 or 25 years to provide you with “the lowest monthly mortgage payment”. The end result is a never ending payment that never gets your debt paid off because it will often only pay interest. Most people will just pay the minimum amount due on their statement each month, which often represents mostly interest. This makes the banks a lot of money.
Canadian mortgage refinancing can be achieved in a manner that is favourable to a consumer but for this to happen the consumer must be informed. If you were to get a second mortgage, amortization is important. If you owed $20,000 as an example and you amortized your repayment over 15 years you would have a monthly payment of approx. $250 per/mo. If you amortized the same amount of debt over 5 years you would have a monthly payment of approx. $450 per/mo. The 5 year amortization would see that you would be debt free in 5 years and that your first mortgage was not interrupted. When you look at your minimum payments to your credit cards, which only cover interest in most cases, the 5 year amortization could put hundreds of dollars per/mo. of cash flow back into your pocket.
We don’t really advocate lines of credit because they are like taking out one big credit card and there is no fixed repayment term (no end in sight) so we would recommend that you get a second mortgage over a line of credit.
No matter which way you go, don’t make any choices before you get informed about Canadian mortgage refinancing. You can get a second mortgage, first mortgage or line of credit through a mortgage broker which is a more competitive option than going directly to your bank. A mortgage broker represents your best interest first. For more information about Canadian mortgage refinancing and what it means to refinance your home or get a second mortgage, first mortgage or line of credit please visit www.gtamortgagematters.com or call Paul Mangion at 416-204-0156.
Refinancing your first mortgage can be a good choice but can also carry negative implications if it is not arranged properly. The longer you agree to repay debt, the more money the bank earns. For example, if you have 19 years left on your mortgage amortization, many financial institutions and brokers will quote your new mortgage based on a 25 year or 30 year mortgage. This may save you a couple of hundred dollars per/mo. When you look at the amount that you are paying to debt and what the mortgage would look like if amortized over the 19 years as an example, a mortgage refinance keeping your existing amortization at the 19 years will in many cases still free up a significant amount of cash flow and save you a significant amount of interest.
Refinancing your first mortgage carries many benefits. More and more folks are choosing second mortgages as an effective way to keep their consumer debt separated from their first mortgage debt. This is the best way to see that you actually pay off your first mortgage. Choosing to refinance your home and get a second mortgage provides a lot of flexibility, but the bank in this case will often recommend a line of credit or that you amortize your new second mortgage over 20 or 25 years to provide you with “the lowest monthly mortgage payment”. The end result is a never ending payment that never gets your debt paid off because it will often only pay interest. Most people will just pay the minimum amount due on their statement each month, which often represents mostly interest. This makes the banks a lot of money.
Canadian mortgage refinancing can be achieved in a manner that is favourable to a consumer but for this to happen the consumer must be informed. If you were to get a second mortgage, amortization is important. If you owed $20,000 as an example and you amortized your repayment over 15 years you would have a monthly payment of approx. $250 per/mo. If you amortized the same amount of debt over 5 years you would have a monthly payment of approx. $450 per/mo. The 5 year amortization would see that you would be debt free in 5 years and that your first mortgage was not interrupted. When you look at your minimum payments to your credit cards, which only cover interest in most cases, the 5 year amortization could put hundreds of dollars per/mo. of cash flow back into your pocket.
We don’t really advocate lines of credit because they are like taking out one big credit card and there is no fixed repayment term (no end in sight) so we would recommend that you get a second mortgage over a line of credit.
No matter which way you go, don’t make any choices before you get informed about Canadian mortgage refinancing. You can get a second mortgage, first mortgage or line of credit through a mortgage broker which is a more competitive option than going directly to your bank. A mortgage broker represents your best interest first. For more information about Canadian mortgage refinancing and what it means to refinance your home or get a second mortgage, first mortgage or line of credit please visit www.gtamortgagematters.com or call Paul Mangion at 416-204-0156.
Thursday, October 13, 2011
Canadian Mortgage Refinancing Part 2 – Average Debt in GTA is $40k and Homeowners Refinance to Consolidate Debt
Canadian Mortgage Refinancing rates are a clear sign of the times. It is a sad day when the average debt load carried by a GTA homeowner is $40,000. That does not reflect money owed to mortgages, that reflects’ pure debt.
We cannot ignore the fact that the cost of living has skyrocketed in the GTA. Many people are still carrying debt that they took on 4-5 years ago and have not been able to pay down since because of the unexpected increase in the cost of living. The cost of living increase is due primarily to increased transportation costs that companies are passing down to the consumer. Everything is more expensive, from hydro to food to vehicle maintenance and more.
The fact that Ontario has elected a minority government in the 2011 provincial election is sending a clear message that many average families in Ontario are struggling financially and need some relief.
So let’s not focus on what the government can do for us but rather what we can do for ourselves. When debt reaches the point where credit cards are at their limits and your budget can only afford to cover minimum payments financial, decisions have to be made. The issue is that the big banks have set minimum payments so low that these payments are mostly only covering interest. You can pay and pay and pay but the likelihood of your balance getting paid off this way is low (unless you want to make minimum payments for the next 10-15 years).
Homeowners refinance to consolidate debt because it is often much less interest, much lower monthly payments and puts much needed cash flow into the budget. Canadian mortgage refinancing is more and more common because when it gets to the point (like in Toronto) that the average debt load is $40,000, well this is just too much.
$40,000 in debt at current credit card interest rates cost an average of $1,500 to $2,000 per/month in minimum monthly payments. Homeowners who refinance to consolidate debt are able to reduce their monthly payments to as low as $400 per/mo. This is a drastic monthly savings and a testament to why more and more homeowners refinance to consolidate debt.
Many reading this may be thinking that they have approached their banks for mortgage refinancing to consolidate debt and were told no. There are many reasons that this occurs. First, the big banks earn more when you are stuck making minimum payments at credit card interest rates. Because credit card interest rates are so high and because of the length of time it takes to repay at minimum payments, they will often earn more if you do not refinance to consolidate your debt.
Second, the bank’s lending practices have become much more stringent and even having credit cards that are maxed out is considered (by many banks) poor credit. Third, the real estate market has seen so much turbulence in the past couple of years that banks are lending on a more conservative basis.
Canadian mortgage refinancing is available through local mortgage brokers who access other institutional lenders like trust companies, finance companies, mortgage investment firms and even private lenders. If your bank has said no, that doesn’t mean that you do not qualify elsewhere for a mortgage.
If you would like more information about Canadian mortgage refinancing and how you can use your home to refinance to consolidate debt please contact Paul Mangion, Principal Mortgage Broker at the Mortgage Centre at 416-204-0156 or visit www.gtamortgagematters.com
We cannot ignore the fact that the cost of living has skyrocketed in the GTA. Many people are still carrying debt that they took on 4-5 years ago and have not been able to pay down since because of the unexpected increase in the cost of living. The cost of living increase is due primarily to increased transportation costs that companies are passing down to the consumer. Everything is more expensive, from hydro to food to vehicle maintenance and more.
The fact that Ontario has elected a minority government in the 2011 provincial election is sending a clear message that many average families in Ontario are struggling financially and need some relief.
So let’s not focus on what the government can do for us but rather what we can do for ourselves. When debt reaches the point where credit cards are at their limits and your budget can only afford to cover minimum payments financial, decisions have to be made. The issue is that the big banks have set minimum payments so low that these payments are mostly only covering interest. You can pay and pay and pay but the likelihood of your balance getting paid off this way is low (unless you want to make minimum payments for the next 10-15 years).
Homeowners refinance to consolidate debt because it is often much less interest, much lower monthly payments and puts much needed cash flow into the budget. Canadian mortgage refinancing is more and more common because when it gets to the point (like in Toronto) that the average debt load is $40,000, well this is just too much.
$40,000 in debt at current credit card interest rates cost an average of $1,500 to $2,000 per/month in minimum monthly payments. Homeowners who refinance to consolidate debt are able to reduce their monthly payments to as low as $400 per/mo. This is a drastic monthly savings and a testament to why more and more homeowners refinance to consolidate debt.
Many reading this may be thinking that they have approached their banks for mortgage refinancing to consolidate debt and were told no. There are many reasons that this occurs. First, the big banks earn more when you are stuck making minimum payments at credit card interest rates. Because credit card interest rates are so high and because of the length of time it takes to repay at minimum payments, they will often earn more if you do not refinance to consolidate your debt.
Second, the bank’s lending practices have become much more stringent and even having credit cards that are maxed out is considered (by many banks) poor credit. Third, the real estate market has seen so much turbulence in the past couple of years that banks are lending on a more conservative basis.
Canadian mortgage refinancing is available through local mortgage brokers who access other institutional lenders like trust companies, finance companies, mortgage investment firms and even private lenders. If your bank has said no, that doesn’t mean that you do not qualify elsewhere for a mortgage.
If you would like more information about Canadian mortgage refinancing and how you can use your home to refinance to consolidate debt please contact Paul Mangion, Principal Mortgage Broker at the Mortgage Centre at 416-204-0156 or visit www.gtamortgagematters.com
Thursday, October 6, 2011
Canadian Mortgage Refinancing Part 1 – Refinancing Your Home When you Have Credit Problems
Refinancing your home when you have credit problems can be done with the assistance of an experienced mortgage broker who works with lenders that don’t mind helping someone who has experienced problems with credit.
The difficulty you experience when trying to find financing will depend on the type of credit problem you have. Canadian mortgage refinancing has come a long way in the past 20 years. More lenders are willing to work with someone who has credit problems.
Before the last decade, the primary choices as it relates to mortgage refinancing in Canada were the bank or a private lender. In the past decade however, a host of companies have emerged that will offer bad credit mortgages. These include mortgage investment corporations, trust companies and finance companies.
Generally consumer’s who have credit problems that are currently impacting their credit or recently impacted their credit, will find that lenders will approve them on an equity basis. This means that if the client does not have equity, it will be less likely they will be approved. The rule of the thumb that most equity lenders follow is that they will lend between 75%-80% of a property's value including the new funds required.
We mentioned that the difficulty you experience will depend on the type of credit problem you have because some people think that their credit problem is much worse than it actually is. Lenders that will lend to a consumer who has had credit problems will usually look at a few primary factors.
What is the credit score? While many private lenders will not have a minimum credit score, finance companies and trust companies who will consider a bad credit loan will have a minimum “credit score threshold”. When refinancing your home, the minimum credit score could be 550, 580, 600, and sometimes 620. When a credit score is below 550, you will almost always have to obtain mortgage refinancing through a private lender.
Is there a history of recent late payments? If the borrower has made many late payments to loans and credit cards within the past year or two, this too could impact their ability to get a mortgage with a finance company or trust company and will likely mean that you will have to consider a private lender.
Someone who has previously had a bankruptcy or consumer proposal that was completed at least 2-3 year ago and they have 2-3 years of solid re-established credit, may not be considered as having credit problems at all. The same is true for a client who in the past year has only make one or two late payments but has paid all other credit well and all accounts are up to date and in good standing.
The best thing you can do if you think you may have credit problems and want to apply for Canadian mortgage refinancing is speak to your local mortgage broker. They will be able to review your credit with you, talk to you about what options are available and secure a mortgage for you.
For more information about Canadian mortgage refinancing or refinancing your home when you have credit problems please contact Paul Mangion at GTA Mortgage Matter by calling 416-204-0156 or visiting www.gtamortgagematters.com
The difficulty you experience when trying to find financing will depend on the type of credit problem you have. Canadian mortgage refinancing has come a long way in the past 20 years. More lenders are willing to work with someone who has credit problems.
Before the last decade, the primary choices as it relates to mortgage refinancing in Canada were the bank or a private lender. In the past decade however, a host of companies have emerged that will offer bad credit mortgages. These include mortgage investment corporations, trust companies and finance companies.
Generally consumer’s who have credit problems that are currently impacting their credit or recently impacted their credit, will find that lenders will approve them on an equity basis. This means that if the client does not have equity, it will be less likely they will be approved. The rule of the thumb that most equity lenders follow is that they will lend between 75%-80% of a property's value including the new funds required.
We mentioned that the difficulty you experience will depend on the type of credit problem you have because some people think that their credit problem is much worse than it actually is. Lenders that will lend to a consumer who has had credit problems will usually look at a few primary factors.
What is the credit score? While many private lenders will not have a minimum credit score, finance companies and trust companies who will consider a bad credit loan will have a minimum “credit score threshold”. When refinancing your home, the minimum credit score could be 550, 580, 600, and sometimes 620. When a credit score is below 550, you will almost always have to obtain mortgage refinancing through a private lender.
Is there a history of recent late payments? If the borrower has made many late payments to loans and credit cards within the past year or two, this too could impact their ability to get a mortgage with a finance company or trust company and will likely mean that you will have to consider a private lender.
Someone who has previously had a bankruptcy or consumer proposal that was completed at least 2-3 year ago and they have 2-3 years of solid re-established credit, may not be considered as having credit problems at all. The same is true for a client who in the past year has only make one or two late payments but has paid all other credit well and all accounts are up to date and in good standing.
The best thing you can do if you think you may have credit problems and want to apply for Canadian mortgage refinancing is speak to your local mortgage broker. They will be able to review your credit with you, talk to you about what options are available and secure a mortgage for you.
For more information about Canadian mortgage refinancing or refinancing your home when you have credit problems please contact Paul Mangion at GTA Mortgage Matter by calling 416-204-0156 or visiting www.gtamortgagematters.com
Monday, September 26, 2011
Residential Mortgage Insurance with CMHC –When You Need It to Obtain a High Ratio Mortgage
One big reason that our banking system has fared better during the current worldwide economic instability is largely due to the regulation in our banking industry.
In Canada, in order to qualify for a residential mortgage with a “bank”, with less than 25% down payment, the bank must ensure that the mortgage is high ratio insured. While GE also offers high ratio mortgage insurance, the majority of high ratio mortgages that are insured in Canada are insured by CMHC.
Even if a bank approves your mortgage (or has a strong desire to) and CMHC declines the application for high ratio mortgage insurance, the bank will not be able to grant you the mortgage. This has opened up a whole marketplace of alternative lenders that offer high ratio mortgages. A lender, who is not regulated by the Chartered Banks Act, can fund a high ratio mortgage without residential mortgage insurance.
Your most affordable high ratio mortgage option will most often be offered by a bank and insured by CMHC.
We mentioned the fact that if residential mortgage insurance with CMHC is declined, the bank will not be able to finance your mortgage. When you apply for a mortgage, the bank will submit an application for high ratio mortgage to CMHC.
CMHC has firm lending guidelines and requirements that include that the applicant has good credit, good stability, and verifiable income. CMHC will insure a high ratio mortgage when the applicant has had a past history of bruised credit, provided they have at least two years of strong, re-established credit.
If you own your home and want to refinance, CMHC will high ratio insure a residential mortgage and refinance up to 90% of the property’s value, if the applicant qualifies. In the case of a refinance, this makes obtaining a mortgage much easier because where CMHC insurance is present; banks will often not require an appraisal of the property at an additional expense to the borrower.
CMHC’s residential mortgage insurance premium can range from .5% up to 4.5% depending on how much insurance is required. When the residential mortgage being insured represents a lower loan to value, the CMHC insurance premium is less, and when it represents a higher loan to value, the CMHC residential insurance premium is higher. CMHC high ratio mortgage insurance is added to the mortgage and blended into your monthly mortgage payments.
For more information about residential mortgage insurance with CMHC and when it is required to obtain a high ratio mortgage please contact Paul Mangion at GTA Mortgage Matters by calling 1 (877) 234-8275 or by visiting http://www.gtamortgagematters.com/
In Canada, in order to qualify for a residential mortgage with a “bank”, with less than 25% down payment, the bank must ensure that the mortgage is high ratio insured. While GE also offers high ratio mortgage insurance, the majority of high ratio mortgages that are insured in Canada are insured by CMHC.
Even if a bank approves your mortgage (or has a strong desire to) and CMHC declines the application for high ratio mortgage insurance, the bank will not be able to grant you the mortgage. This has opened up a whole marketplace of alternative lenders that offer high ratio mortgages. A lender, who is not regulated by the Chartered Banks Act, can fund a high ratio mortgage without residential mortgage insurance.
Your most affordable high ratio mortgage option will most often be offered by a bank and insured by CMHC.
We mentioned the fact that if residential mortgage insurance with CMHC is declined, the bank will not be able to finance your mortgage. When you apply for a mortgage, the bank will submit an application for high ratio mortgage to CMHC.
CMHC has firm lending guidelines and requirements that include that the applicant has good credit, good stability, and verifiable income. CMHC will insure a high ratio mortgage when the applicant has had a past history of bruised credit, provided they have at least two years of strong, re-established credit.
If you own your home and want to refinance, CMHC will high ratio insure a residential mortgage and refinance up to 90% of the property’s value, if the applicant qualifies. In the case of a refinance, this makes obtaining a mortgage much easier because where CMHC insurance is present; banks will often not require an appraisal of the property at an additional expense to the borrower.
CMHC’s residential mortgage insurance premium can range from .5% up to 4.5% depending on how much insurance is required. When the residential mortgage being insured represents a lower loan to value, the CMHC insurance premium is less, and when it represents a higher loan to value, the CMHC residential insurance premium is higher. CMHC high ratio mortgage insurance is added to the mortgage and blended into your monthly mortgage payments.
For more information about residential mortgage insurance with CMHC and when it is required to obtain a high ratio mortgage please contact Paul Mangion at GTA Mortgage Matters by calling 1 (877) 234-8275 or by visiting http://www.gtamortgagematters.com/
Tuesday, September 20, 2011
How to Shop for a Mortgage in Toronto without Ruining Your Credit
The biggest mistakes that individuals make when shopping for a mortgage are over shopping and under planning. Here are some tips on how to shop for a mortgage in Toronto, without ruining your credit.
Before you start looking for a mortgage, you should first think about if you qualify for a mortgage. This starts with requesting your credit report from Equifax. Your credit score is important because if it is less than 680, your mortgage options will be greatly reduced.
If you want to shop for a mortgage and have less than a 25% down payment, you will need CMHC mortgage insurance to qualify for a mortgage with a bank. When a mortgage is insured by CMHC, the applicant must apply with both the bank and with the CMHC. Usually the bank will submit your CMHC insurance application to them on your behalf.
Both the CMHC and the bank will require the following:
1. That your housing payments (with your new mortgage) do not exceed 32% of your gross income.
2. That your housing payments (with your new mortgage payment) and your payments to credit/debt do not exceed 42% of your gross income.
3. They will want to see good stability.
4. They will want to see proof of your income.
5. Most banks will require a minimum credit score of 680. However, the CMHC will often insure a high ratio mortgage when the applicants credit score is as low as 620.
If you do not satisfy the above basic criteria, you still have mortgage options in Ontario. Because the CMHC will insure a high ratio mortgage for someone who doesn’t meet the banks minimum criteria, there are a number of credit unions and trust companies that offer more flexible lending criteria.
The planning part of preparing to purchase a home should include reviewing your personal finances and credit to ensure you can obtain financing. There is nothing worse than falling in love with a home you want to purchase, only to learn you cannot get a large enough mortgage to make the purchase.
When the time comes to obtain a mortgage pre-approval, do not go from bank to bank applying for mortgages trying to get the best deal. Many folks don’t realize that each applicant for credit is reported to the credit report and too many applications for credit in a short period of time can actually reduce your credit score.
Your best bet is to establish a relationship with a local Mortgage Broker, one who deals with all the banks. If you are worried that you may face challenges qualifying for the mortgage that you want, when looking for a Mortgage Broker, ask them if they are capable of dealing with all types of credit and income. In most cases, the bank will pay your Mortgage Broker, so there is huge value to taking advantage of a resource that can shop the best deal for you. For more information about how to shop for a mortgage in Toronto without ruining your credit visit http://www.gtamortgagematters.com/
Before you start looking for a mortgage, you should first think about if you qualify for a mortgage. This starts with requesting your credit report from Equifax. Your credit score is important because if it is less than 680, your mortgage options will be greatly reduced.
If you want to shop for a mortgage and have less than a 25% down payment, you will need CMHC mortgage insurance to qualify for a mortgage with a bank. When a mortgage is insured by CMHC, the applicant must apply with both the bank and with the CMHC. Usually the bank will submit your CMHC insurance application to them on your behalf.
Both the CMHC and the bank will require the following:
1. That your housing payments (with your new mortgage) do not exceed 32% of your gross income.
2. That your housing payments (with your new mortgage payment) and your payments to credit/debt do not exceed 42% of your gross income.
3. They will want to see good stability.
4. They will want to see proof of your income.
5. Most banks will require a minimum credit score of 680. However, the CMHC will often insure a high ratio mortgage when the applicants credit score is as low as 620.
If you do not satisfy the above basic criteria, you still have mortgage options in Ontario. Because the CMHC will insure a high ratio mortgage for someone who doesn’t meet the banks minimum criteria, there are a number of credit unions and trust companies that offer more flexible lending criteria.
The planning part of preparing to purchase a home should include reviewing your personal finances and credit to ensure you can obtain financing. There is nothing worse than falling in love with a home you want to purchase, only to learn you cannot get a large enough mortgage to make the purchase.
When the time comes to obtain a mortgage pre-approval, do not go from bank to bank applying for mortgages trying to get the best deal. Many folks don’t realize that each applicant for credit is reported to the credit report and too many applications for credit in a short period of time can actually reduce your credit score.
Your best bet is to establish a relationship with a local Mortgage Broker, one who deals with all the banks. If you are worried that you may face challenges qualifying for the mortgage that you want, when looking for a Mortgage Broker, ask them if they are capable of dealing with all types of credit and income. In most cases, the bank will pay your Mortgage Broker, so there is huge value to taking advantage of a resource that can shop the best deal for you. For more information about how to shop for a mortgage in Toronto without ruining your credit visit http://www.gtamortgagematters.com/
Monday, September 12, 2011
Low Interest Mortgage Loans – How Long Can You Hold Your Low Interest Mortgage Approval?
Low interest mortgage loans are available to those who want to purchase or refinance their homes.
If you are thinking about buying a home, it makes the most sense to make sure you can obtain a mortgage before you start house shopping. You will also want to be sure that you understand the extent of your mortgage closing costs to ensure that you have the liquidity to go through with the purchase.
Do not go from bank to bank applying for mortgages. This will result in multiple credit inquiries on your credit report and will reduce your overall credit score. This alone could disable your ability to get approved for a mortgage.
Go to a Mortgage Broker, one that deals with all the major banks. They will be able to:
- Pull your credit
- Review your credit applications
- Tell you what you qualify for
- Negotiate with the banks
- Obtain a low interest mortgage pre-approval on your behalf
Most Mortgage Brokers can negotiate with the bank to hold your mortgage interest rate for 120 days.
Depending on your credit and income, you will need between five to ten percent of the purchase price as a down payment. If you are obtaining a CMHC mortgage, you will have to prove where your down payment money came from.
If you are planning to purchase a home, you will also need to consider the following “other closing costs” you will incur when purchasing a home.
1. It is always prudent to have a property inspector go in and do a home inspection on a property you are planning on purchasing. The cost of an inspection is approximately one thousand dollars.
2. You will have to obtain Fire Insurance Coverage on the property. This is often cheapest when bundled with other insurance policies, such as car insurance.
3. Real estate legal fees will be incurred both on your property purchase and on your mortgage closing. Many Real Estate Lawyers can offer you a bundle deal that covers both closings.
4. Finally, you will need to have enough money set aside to cover your land transfer tax which could be 1-3% of the property purchase value.
Your closing costs will vary depending on the location of the property you are purchasing. Step one in the process of planning to purchase a home is to establish a relationship with a good Mortgage Broker. For more information about low interest mortgage loans and how long you can hold your low interest mortgage approval visit http://www.gtamortgagematters.com/
If you are thinking about buying a home, it makes the most sense to make sure you can obtain a mortgage before you start house shopping. You will also want to be sure that you understand the extent of your mortgage closing costs to ensure that you have the liquidity to go through with the purchase.
Do not go from bank to bank applying for mortgages. This will result in multiple credit inquiries on your credit report and will reduce your overall credit score. This alone could disable your ability to get approved for a mortgage.
Go to a Mortgage Broker, one that deals with all the major banks. They will be able to:
- Pull your credit
- Review your credit applications
- Tell you what you qualify for
- Negotiate with the banks
- Obtain a low interest mortgage pre-approval on your behalf
Most Mortgage Brokers can negotiate with the bank to hold your mortgage interest rate for 120 days.
Depending on your credit and income, you will need between five to ten percent of the purchase price as a down payment. If you are obtaining a CMHC mortgage, you will have to prove where your down payment money came from.
If you are planning to purchase a home, you will also need to consider the following “other closing costs” you will incur when purchasing a home.
1. It is always prudent to have a property inspector go in and do a home inspection on a property you are planning on purchasing. The cost of an inspection is approximately one thousand dollars.
2. You will have to obtain Fire Insurance Coverage on the property. This is often cheapest when bundled with other insurance policies, such as car insurance.
3. Real estate legal fees will be incurred both on your property purchase and on your mortgage closing. Many Real Estate Lawyers can offer you a bundle deal that covers both closings.
4. Finally, you will need to have enough money set aside to cover your land transfer tax which could be 1-3% of the property purchase value.
Your closing costs will vary depending on the location of the property you are purchasing. Step one in the process of planning to purchase a home is to establish a relationship with a good Mortgage Broker. For more information about low interest mortgage loans and how long you can hold your low interest mortgage approval visit http://www.gtamortgagematters.com/
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