For many first-time homebuyers saving for a down payment can be challenging. You may have saved the minimum 5 per cent down payment, but have you set enough money aside for closing costs? First-time homebuyers often make the mistake of not budgeting for closing costs. Closings costs can easily amount to over $10,000 in Canada’s most expensive market, Vancouver. Let’s take a look at the…
One of the biggest advantages of using a mortgage broker is that you get access to the best rates and products from over 30 major lenders. We save you the work by submitting your application to the most suitable lender.
Here is a 90 second video that explains the main differences between a broker and a bank: Before I really knew about the mortgage industry, I assumed that brokers made their livings in one of three ways: charging a fee, increasing a lender's rate, or using a small lender with high rates for the sake of a commission. Not a very positive image, but…
The idea of buying a home can seem really overwhelming, but it’s actually pretty straight forward. Step 1 You decide that it’s time to buy. The first step is to contact your mortgage broker or bank to figure out how much you can afford based on your income and your down payment. They will usually send in your application to hold the current rates for…
When buying a home or other property, you’ll have to rely on a range of professionals to guide you through the process. For first time home buyers in particular, it helps to be acquainted with these specialists and their roles. Mortgage Broker – A mortgage expert who introduces buyers to a full range of mortgage products, interest rate options, and strategies to pay off a…
One of the most important pieces of information to know is your down payment percentage. This will determine whether your mortgage is conventional or hi-ratio, and both have different rules that will affect how much you can borrow. HIGH-RATIO MORTGAGE If you have under 20% of the purchase price as your down payment, your mortgage is considered hi-ratio. Hi ratio mortgages must be insured…
It’s quite common for borrowers to confuse amortization and term. Amortization is the number of years it takes to pay off your entire mortgage. Term is the length of your contract. When your term is up, you can change your mortgage amount, amortization, and interest rate. Choosing a longer amortization reduces your monthly payment and therefore increases how much you can borrow. Longer amortization periods…
One of the questions I get asked frequently is whether to choose a fixed product or a variable product. Which route to take ultimately depends on your preferences. Here are some things to look at when making your decision: 1. Fixed payments vs Fluctuating payments There is a certain premium that you pay to have a guaranteed payment for a given time period. That's worth…
Before beginning the bidding war on a potential property, it helps to have an indication of how much you can afford. Some home buyers don’t fully understand pre-approvals. Even if you obtain a pre-approval, it does not guarantee you will qualify for the financing. The main benefit of a pre-approval is that it will give you a good idea of how much you can afford…
Several factors come in to play when a lender is deciding how much you qualify for. Credit Lenders want to see that you have a good history of paying your bills. Gross Debt Service Ratio (GDS) Gross debt service ratio is the percentage of your income that is going towards your home payments (mortgage, property tax, condo fees). The percentage allowed varies among…
