Here are the general requirement to qualify for Home Owner Mortgage Loan Insurance through CMHC:
One of the first steps to purchasing a new home is making sure you can afford and finance the property. Shopping for a mortgage is a must-do, yet most people are prone to making mistakes that can result in getting the wrong mortgage for their needs. Here are a few things to consider while shopping for a loan:
1. Variable or fixed rate
With a fixed rate mortgage, the mortgage rate and payment you make each month will stay constant for the term of your mortgage . With a variable rate mortgage, the rate will change with the prime lending rate as set by your lender. A variable rate will be quoted as Prime +/- a specified amount, such a Prime - 0.46%. Though the prime lending rate may fluctuate, the relationship to prime will stay constant over your term.
2. The lowest interest rate mortgage is not always the best deal
Interest rate alone cannot be relied on to make the best mortgage financial decision. Mortgage rates can be artificially reduced by adding upfront discount points or adjustable rate features that may not make good financial sense for your situation.
3. Consider more then just the monthly payment
Mortgage payments are important in terms of affordability, but relying on payment alone could be a mistake. Monthly payments can be manipulated to enhance affordability by extending the term, adding up-front closing costs or adding adjustable rate features, all of which can negatively impact your wealth.
4. Think about the future
You can avoid costly mistakes by asking yourself a simple question—how long do I expect to live in this property? Time matters because mortgage interest rates are intimately tied to time. It is also important to consider what the future might bring. If there is a possibility of moving or selling during the term of your mortgage, you should chose a mortgage that will allow this without costly penalties.
5. Consider impact on wealth with “Net Benefit.”
Your choice of mortgage is one of the most important financial decisions that you will make in your lifetime. Different mortgages can have dramatically different wealth outcomes that cannot be determined by looking at payment or rate alone. The right mortgage could literally create thousands of dollars in wealth for you over its lifetime.
With so many things to consider, finding the right mortgage can be overwhelming. At Kootenay Home Mortgage we have access to several mortgage products and we will help find a mortgage to best suit your needs. Contact us at 250-254-4663 or firstname.lastname@example.org for more information.
In the past, prospective home buyers turned exclusively to their banks for their mortgage needs, but now you have more options at your disposal with the growing presence of mortgage brokers. In 2009 40% of the total mortgages in Canada went through a Mortgage Broker and that number continues to climb. If you are thinking about using a Mortgage Broker here are some important facts and common questions:
What are the key differences between a Mortgage Broker and the Bank?
The main difference is their access to mortgage products. A bank or other individual lender can only help you secure a mortgage offered by the said bank or lender. The lending institution may have many different mortgage products, but at the end of the day they can only offer you their products. A Mortgage Broker has access to multiple banks and lending institutions so they have far more options available and they can get banks competing for your business.
Who pays a Mortgage Broker?
A Mortgage Broker fee's are paid by the lender and not by the person who is using the service so there will be no fee's for the client.
How will a Mortgage Broker save me time and money?
Brokers are mortgage experts. They know the market, follow trends and know which institutions offer which mortgages products. They’ll also know which lenders are offering discounts or deals so they can get you a great rate.
Importantly, brokers can save you time. A broker can identify the most appropriate lender for your specific circumstances and know which mortgages will be most appropriate. They also handle the hassle of paperwork and the interaction and negotiation with lenders, which can help relieve stress from the process.
How does a Mortgage Broker Finance my mortgage?
Mortgage brokers will assist you in the application process, from pre-approval to home appraisal; however, it is important to note they are an origination service. A financial institution, not a mortgage broker, will provide and service your loan. The bank or lender will collect payments and provide customer service after the closing; however you can always reach out to your mortgage broker to help you throughout the life of your mortgage.
If you are interested in purchasing a home, renewing your current mortgage or refinancing your home contact us today!