- It determines the maximum mortgage loan for which you qualify.
- It allows your realtor to show you a range of properties in your price range.
- It allows your realtor to make a realistic offer on your purchase, and saves time in the negotiation process.
- It holds the interest rate for a period of up to 120 days, guarding you against rate fluctuations.
- It provides peace of mind during the home buying process.
- Each applicant can withdraw up to $25,000 tax free.
- Applicants cannot have owned a principle residence within the past 5 years.
- You must reside in the home for at least one year.
- The RRSP funds must have been invested for more than 90 days before withdrawal to qualify.
- The withdrawn amount must be repaid, over an interest-free repayment period that can be as long as 15 years.
Warning: Not all open mortgages are created equal. Check to see just how “open” your mortgage is!
Warning: Not all closed mortgages are created equal. Check with Invis-Feisal & Associates as to how your prepayment penalties are calculated.
With mortgages you pay a price for certainty. You generally pay more for a fixed rate mortgage because the lender is taking the risk as to what the rates will do by fixing the rate for you. You generally pay less for a variable rate mortgage because it is you that is taking the risk of uncertainty as to how interest rates will move up or down.
With low interest rates, variable interest rate mortgages have become popular. Often it is possible to get a rate under the bank prime rate!
Eg. If your mortgage payment was $1000 a month, and you paid it bi-weekly at $500 every two weeks, at the end of the year you would have paid $13,000 towards your mortgage as opposed to $12,000 by paying monthly. That extra amount will reduce the total overall interest costs and therefore the number of years it takes to pay off your mortgage. Going weekly at $250 per week will also put $13,000 towards your mortgage just as bi-weekly did and give you the same result.
If setting your payments bi-weekly or weekly does not work for you then just pay monthly and put an extra monthly payment on once a year (double up one payment) and you will get almost the same benefit.
Eg. Assume a mortgage amount of $420,000 with 5.35% APR with 5 year term over 30 year amortization. The monthly payment is $2,330.02 and the interest cost for the mortgage lifetime would be $418,805.31.
Step 1: Change to a biweekly payment of $1,165.01 save $81,605.69
Step 2: Now add an extra $100 to your payment and see your savings grow!
Monthly payments would be $2430.02 with a savings of $76,890.66
Change to bi-weekly payments of $1,265.01 save $111,840.96!
1. RRSP Homeowner´s Plan allows you to withdraw up to $25,000 from your RRSP tax free (you have 15 years to pay this money back into an RRSP).
2. Property Purchase Tax Exemption if you have not owned any real estate as your principal residence anywhere in the world you would be exempt. (Province of British Columbia).
In addition to considering what the ratios say you can afford, make sure you calculate how much you think you can afford. If the payment amount you are comfortable with is less than 42% of your income, you may want to settle for the lower amount rather than stretch yourself financially. Make sure you don´t leave yourself house poor. Structure your payments so that you can still afford simple luxuries.
A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.
Lenders will generally accept a gift from a family member as an acceptable down payment provided a letter stating it is a true gift, not a loan, is signed by the donor. Most lenders will also require proof of receipt of the gift funds prior to completion, as well as confirmation that the donor has the funds available to gift.
Mortgages with less than 20% down must have Mortgage Loan Insurance provided by either CMHC, Genworth or Canada Guarantee.
Financial Institutions can only offer their own products to the public through their sales force. As a result, they are not able to provide unbiased advice or selection since by doing so they risk losing your mortgage to a company whose product may provide more value to you. At Invis-Feisal & Associates, we offer a wide variety of mortgage products and services as we deal with many lenders, not just one. Because of this we are able to search for product from a variety of lenders, including banks, trust companies, insurance companies, credit unions and private lenders, for the one that offers the best product, rate and terms for your particular needs. Thus, we can be totally objective and unbiased in our recommendations to you.
When you deal directly with a Financial Institution and your mortgage is declined, for whatever reason, you must begin the application process all over again with another lender. When you deal with us, the application can quickly be redirected to another lender, or several other lenders, for consideration.
In situations where traditional lenders will not approve a mortgage because of poor credit, and where the application must be placed with a private or non-traditional lender, a brokerage fee may be charged to the client. This cost must always be disclosed to the client up front and must be authorized in writing by the client before it can be charged.
Where Child Support and Alimony are received by you from another person, generally the amount paid may be added to your total income before determining the size of mortgage you will qualify for, provided proof of regular receipt is available for a period of time determined by the lender.
Most lenders send out their mortgage renewal notices offering existing clients their posted interest rates. The rate you are being offered is usually not the best one. Always ask us to investigate the possibility of a lower interest rate with the lender or another lender. If you don´t, you may end up paying a much higher interest rate on your renewing mortgage than you need.
Contact us 120 days prior to your maturity and we can help obtain the best option for you upon renewal.