Archive for July, 2013

Find Your Perfect Home

Sunday, July 21st, 2013

Your perfect home is “out there” somewhere! After you have been pre-qualified for a mortgage, you will know how much you are comfortably able to spend on a mortgage payment (including all applicable fees, taxes, etc.). Even if you don’t think it’s possible to find your ideal home on your current budget, you can take a first step in that direction.

 The first step after pre-qualification is to make a list of all the features you want/need in a home. These should include number and size of rooms, type of home (detached, town home, condominium, etc.) and nearby community amenities. Then divide your list by what is non-negotiable and what are “nice to have” features. Your real estate broker will be better able to better serve you by knowing not only your home price range, but also the features that are important to you.

Some options to consider: Purchase a home that meets most of your “must haves” and plan to set aside savings each month toward a remodeling fund. If you love the family room and bedroom sizes but want to update or remodel your kitchen, you can move in now and begin getting estimates for your dream kitchen.

 Another option is to buy a home that is slightly less than the maximum you can afford now. It may not qualify as your dream home, but you will be accumulating equity in your house and after several years, you’ll have additional funds available to finance another home that does offer everything you hope for in a home!

If you have any questions about buying a home talk to us, and we’ll walk you through the decision making process.   Call Justin at  604-736-1855.

Different Types of Mortgages and Rates

Wednesday, July 10th, 2013

There are many different types of mortgages and rates available in today’s marketplace. The fixed rate mortgage loan offers the most stability and terms that do not change over the life of the loan. Adjustable rate mortgages allow borrowers to take advantage of hoped-for decreasing mortgage rates in the future. Low-Interest/High ratio loans are ideal for home buyers who don’t have a large sum of money for a down payment.

 

Qualifying for a Mortgage

A conventional mortgage is a mortgage for less than 80%-in other words the borrower provides at least 20%-25% as a down payment, and is either fixed or variable rate loans.

With fixed-rate loans, the payments remain the same throughout the term of the loan.  This is ideal for someone whose income is expected to remain stable throughout the year and who has a low tolerance for risk.

An adjustable rate mortgage loan is a good idea if the borrow believes rates will decline in the near future. This loan rate is tied to the prevailing market prime rate and rises and falls as the prime rate goes up or down. Variable rates are typically lower than adjustable rates and the initial rates are usually very low to make them attractive to borrowers.

If rates do decline, the payment remains the same, but more of the payment is applied to the principal, allowing the loan to paid off earlier. If rates do begin to rise, the loan can be refinanced to a fixed rate.

Low-Interest/High Ratio Loans

A low-interest/high ratio mortgage is a mortgage where the borrower provides a down payment of less than 20%. Mortgages for 75% or more require mortgage insurance, usually provided by Canada Mortgage and Housing Corporation (CMHC) or Genworth. The insurance premium (of up to 7.3% of the mortgage amount) offers the lender the assurance that they will be repaid should your default on your mortgage.

This is merely an overview of mortgage products available to borrowers. Check back often for information on the vast array of products and variations offered to today’s Canadian home purchaser.

If you have any questions about the steps necessary to pre-qualify for a mortgage please give Justin (604-736-1855 ) a call or fill out the form on our Contact Us page.