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23

Jan 2013

Chapter 4 – Mortgage Types

by Iain in Vancouver Mortgage Blog

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…

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23

Jan 2013

Chapter 5 – Term vs Amortization

by Iain in Vancouver Mortgage Blog

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…

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23

Jan 2013

Chapter 6 – Variable vs Fixed

by Iain in Vancouver Mortgage Blog

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…

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23

Jan 2013

Chapter 7 – Pre Approvals

by Iain in Vancouver Mortgage Blog

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…

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23

Jan 2013

Chapter 8 – Qualifying

by Iain in Vancouver Mortgage Blog

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…

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23

Jan 2013

Chapter 9 – Improving Credit

by Iain in Vancouver Mortgage Blog

The majority of Canadian citizens have a credit score.  Scores can range from 300 to 900.  Anything above 680 is considered good credit and you can usually receive a full range of borrowing options.  Once you get below 600, your options will become more limited.   Your score is composed of a few different elements from the past 7 years:   payment history amount of…

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23

Jan 2013

Chapter 10 – Common Required Documents

by Iain in Vancouver Mortgage Blog

Although you don’t need to provide documents during the pre-approval process, you will eventually need to confirm the information on your application. The exact documents required vary from lender to lender, but there are a few that you can expect to provide each time.   Mortgage Commitment: The mortgage commitment is the contract that the lender provides.  It includes all the conditions required from you…

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23

Jan 2013

Chapter 11 – BC Home Buyer’s Plan

by Iain in Vancouver Mortgage Blog

The Home Buyers' Plan (HBP) is a first time home buyer program that allows you to withdraw up to $25,000 from your RRSP for a down payment. Conditions for participating in the HBP Only the individual who is entitled to receive payments from the RRSP can withdraw funds from an RRSP. You can make withdrawals from more than one RRSP as long as you are the…

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23

Jan 2013

Chapter 12 – Special Tax Discounts

by Iain in Vancouver Mortgage Blog

Home Owner Grant: The basic grant can reduce your property tax by as much as $570 per year. To be eligible for the grant, you must meet the following criteria: 1. You are a Canadian citizen or landed immigrant and ordinarily reside in British Columbia. 2. You are the registered owner or eligible occupant of the home. The home must be located within the province. 3.…

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23

Jan 2013

Chapter 13 – Property Transfer Tax Exemption

by Iain in Vancouver Mortgage Blog

This is a big benefit for first time home buyers. When purchasing real estate in BC, you must pay a property transfer tax of 1% of the 1st $200,000 plus 2% of the remaining amount. This Provincial Tax is due every time a property in B.C. changes hands. The Lawyer will collect the tax on closing and pay it to the Government. The First Time Home…

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