Questions with detailed answers from Gloria
What will my mortgage cost per month?
Use our Mortgage Calculator to determine your approximate monthly payment.
What types of Mortgages are available?
Conventional -- "Low Ratio" -- Loan amounts which do not
exceed 80% of the lesser of the appraised value or the purchase
price of the property.
National Housing Act (NHA) -- Loan amounts of up to 95% of the value
are normally available. Mortgages are insured by Canada Mortgage
and Housing Corporation CMHC, a Federal Government Corporation. Conventional -- "Insured" -- Loan amounts of up to 95%
are available. Mortgages are insured by Genworth Financial, a private
insurer.
What are the terms of the Mortgages?
First Mortgages are available with a fixed rate of interest for
various terms, ranging from 6 months to 10 years, with payments
amortized over periods of up to 40 years.
Fixed rate Mortgages can be "closed" or "open". The
"open" mortgage allows you to prepay some or all of your outstanding
mortgage balance at any time without penalty. These "open" Mortgages
are available for either a 6 month or 1 year term and generally have a
slightly higher rate of interest than "closed" Mortgages for
an equivalent term.
"Closed" Mortgages are available in a wide range of terms,
from 6 months to 10 years. These "closed" Mortgages cannot be
prepaid in full prior to maturity without being subject to an interest
penalty. Certain prepayments, as provided for in the Lenders Mortgage
Terms, can, however, be made. Allowable prepayments without penalty range
from 10% to 30% of the original mortgage amount per year.
How does self employment
affect my mortgage application?
Self-employed individuals have the ability to write off their expenses,
such as "office in the home" and depreciation. The net
income figure can be low, making qualifying for a mortgage and other
credit more difficult. In fact while the face of the working population
has changed, lenders, for the most part, have remained steadfast
in their approach to underwriting credit risks.
There are lenders, who have made the move to understanding that
income should not be the single most important qualifying factor
when determining credit risk. As Mortgage Brokers we have access
to lenders who lend up to 75% of the value of a home without being
concerned about income. Typically, with interest rates at Bank Posted
rates. At 65% of the value of a property discounted bank rates can
apply. Now you can be an Entrepreneur and a Good Credit Risk at
the same time.
Is
the lowest rate the best mortgage for me?
The lowest rate usually has the strictest mortgage terms, which
for some people can be unrealistic terms. Gloria finds that balance
between the terms and rate for your best financial solution.
Which
mortgage is best for me?
Nowadays, there are many mortgages to choose from, that's why
you need a professional like Gloria sorting though the various
alternatives on your behalf. Your needs are balanced against
products offered for the Best mortgage that meets your individual
needs. IE; long term goal, short term goal, use, prepayment
requirements and future flexibility. |
|
How does the purchase
of revenue property affect my mortgage application?
Lenders differ greatly on how they view revenue property. The underlying
concern is that if times get rough, the mortgage on a revenue property
is the first thing allowed to slide. CMHC uses a very restrictive
formula when assessing a revenue property purchase. There are lenders
who use this same formula. Fortunately there are other lenders who
take a more favorable look at qualifying this type of purchase by
using "the offset method." This method takes a portion
of the potential revenue from the property and deducts it directly
from the new mortgage payment, leaving the borrower to qualify for
any shortfall. Again, lenders vary on how much of the property revenue
they will use.
I want to purchase a
vacation property, will you provide me with a mortgage?
This type of purchase might leave a potential borrower feeling lonely.
Most lenders are leery because in financially difficult times, the borrower
may not make payments on this secondary property. Typically a lender will
require 35% down payment on this type of purchase.
|
