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MORTGAGE

OPTIONS & BASICS

THE 3 BASIC PARTS OF MORTGAGES:
THE 3 BASIC PARTS OF MORTGAGES:
AMORTIZATION

This is the total number of years it will take to pay off your mortgage completely. The longer your amortization is, the lower your monthly mortgage payments will be, but you will also end up paying more interest over the term of the mortgage as well.

TERM

This is the length of time you have agreed to a certain interest rate and payment schedule. It can be anywhere from 6 months to 10 years. However, the most popular length of term for home buyers tends to be either 3 or 5 years.

INTEREST RATES

Variable

This type of interest rate is tied to the banks prime rate. The banks prime rate fluctuates up or down with the overnight rate set by the Bank of Canada. A variable rate can typically be locked into a fixed rate once during the term of the mortgage without penalty.

FIXED

This type of interest rate is locked in for a length of time and is usually higher than a variable rate. Essentially, you are paying extra for piece of mind. The payments, including the amount of interest that you owe will not change during the term of the mortgage. Fixed rates are determined by supply and demand in the bond market which is determined by world events. This is why it is hard to predict where rates are headed in the future.

INTEREST RATES

Variable

This type of interest rate is tied to the banks prime rate. The banks prime rate fluctuates up or down with the overnight rate set by the Bank of Canada. A variable rate can typically be locked into a fixed rate once during the term of the mortgage without penalty.

FIXED

This type of interest rate is locked in for a length of time and is usually higher than a variable rate. Essentially, you are paying extra for piece of mind. The payments, including the amount of interest that you owe will not change during the term of the mortgage. Fixed rates are determined by supply and demand in the bond market which is determined by world events. This is why it is hard to predict where rates are headed in the future.


THE 2 TYPES OF MORTGAGES:
THE 2 TYPES OF MORTGAGES:
OPEN

This type of mortgage allows you to pay the mortgage down or off in its entirety, at any time, without paying a penalty. A line of credit can also be considered an open mortgage. These mortgages usually carry a higher interest rate.

CLOSED.

This type of mortgage restricts how much principal you can pay down, if any, ahead of schedule. Most mortgages allow you to make pre-payments (and/or extra payments) towards the principal in the amount of  up to 20% of the principal amount per year.


MORTGAGE OPTIONS

We are proud to offer you a selection of over 50 lenders (including private financing) for clients with excellent credit or those who need some credit repair advice.

MORTGAGE OPTIONS

We are proud to offer you a selection of over 50 lenders (including private financing) for clients with excellent credit or those who need some credit repair advice.


MORTGAGE CALCULATOR
MORTGAGE CALCULATOR

Monthly Mortgage Payments


FAQS

What do my payments consist of?

Your payments consist of principal and interest. Early on in the mortgage you will be paying more interest than principal. Your lender may also collect property taxes with your payments and pay them on your behalf.

What is a pre-approval?

A pre-approval lets you know the maximum mortgage amount you can afford based on the information you provide about your income and debt levels at the time of the pre-approval.  It also  holds a rate for you up to 120 days.  If rates increase during that time, you will still get the lower rate if your mortgage closes within that 120 day window.  Any material changes to your income, credit and/or debts prior to purchase will affect your pre-approval.  Please note a pre-approval is not a guarantee that you will get a mortgage, as it is conditional on you providing income, as well as other documents to support your initial application, as well as the approval of a mortgage default insurer such as CMHC if applicable.

What if I have a variable rate mortgage and the prime rate goes up?

This means that either your monthly payment will increase because you will now be paying more interest on your mortgage, or the payments will stay the same but more of the payment will be applied to the interest and thus, you will end up making payments for a longer period of time.

How much do I need for a down payment?

This depends on your individual situation. If you have 20% or more for a down payment, you will not require mortgage loan insurance and you will qualify for a conventional mortgage. If you have less than 20% down payment, this is called a high ratio mortgage and you will need to purchase mortgage loan insurance (which can be capitalized into the mortgage with the exception of the PST portion). For this type of mortgage, you will need to qualify based on the lender and mortgage loan insurers guidelines. The larger the down payment you have, the less you will need to borrow and the less interest you will pay.