Mortgage Down Payment
Today’s mortgage market allows potential homeowners to purchase their dream property in Canada with as little as five per cent down.
Any down payment that totals less than 20 per cent of the property value will require mortgage default insurance, and is considered to be a high ratio loan.
A conventional mortgage is defined as a mortgage loan where 80 per cent or less of the property value is financed through a lender. The percentage of your home value that is financed, or not paid for by the down payment, is defined in a Loan to Value ratio (LTV) (loan amount divided by property value). The LTV has a large influence on the mortgage product you will be eligible to qualify for on the purchase of your new property.
The greater the down payment you can accumulate, the greater the contribution you are making toward the principal value of your home, and thus the less of the mortgage loan amount you will be paying interest on over time.
Your mortgage is one of the largest purchase items you will probably take on in your life. In making that commitment, you will most likely seek advice from several people: your family, your partner, your real estate agent, your financial planner and your mortgage broker.
Ensuring that you employ the best real estate professionals that you have access to – home buying professionals with your best interest in mind – will save you exponentially down the line. It takes a solid team to secure an optimal home.
Finding a well-connected Canadian mortgage broker is your first step. A mortgage broker will help you ascertain the true amount you can afford to spend on your new home, before you start shopping. A mortgage pre-approval will give you powerful buying power with home sellers, and will hold for you the best mortgage rates available, usually within 90 days. With one mortgage application, a mortgage broker will scout the Canadian mortgage market for you, and find the mortgage product that best suits your needs, be it through a bank, trust company, credit union, insurance company or private lender.
Halloween aside, this October has plenty of reasons to get you spooked, what with a recession, a long and tiring election campaign, and recent world events. Plenty of reasons, but your mortgage need not be one of them.
We’re here to help in this frightful time, no matter if you’re buying a home, renewing your mortgage, or looking to refinance.
Mortgage brokers have access to a wide range of lenders and products, and we can find a mortgage that’s right for you. After all everyone’s mortgage needs are different. You may require the certainty that your mortgage payment will stay the same from the first day of your term to your last. You may want flexibility, to be able to pull equity out of your home to finance a renovation or a new car. Regardless, you should be able to do so with the lowest mortgage rate available in Canada.
Mortgage rates are incredibly low right now, but you likely wouldn’t know it if you looked at your local bank’s rates. Go with your bank’s mortgage rates, you’ll probably end up paying a ghastly premium.
It seems like not a week goes by that a major news story doesn't rock the Canadian real estate market regarding mortgage rates. While it's true that mortgage rates are an important factor when it comes to homebuying, it's even more essential for Canadians to understand exactly how mortgage rates work, and how they can affect home loans.
What are mortgage rates?
A mortgage rate is a term used to describe the interest on a home loan. For most individuals, obtaining a mortgage is a necessary part of buying a home. Mortgage rates are figured on the principal balance of a home loan, meaning how much money is still owed before the loan has been fully repaid. Since a higher balance means more interest, mortgage rates are typically more expensive at the beginning of a loan. As the balance is paid off, less interest is able to build up. This is also why homebuyers spend so much time searching for low rates, as lower interest means less money owed. Continue reading
The Dirty “R” Word
If the word “Recession” fills you with unease, you’re not alone. The word doesn’t sit well with many people. Unless you are in the rare circumstance of having just come into a gratuitous fortune, or you are employed in a sector of the economy that has somehow been unaffected by it, a recession will to affect you. Even then, depending on the severity of the recession, unaffected sectors can be effected by proxy.
With new regulations, insured mortgages have a maximum 25 year amortization. Banks often choose to insure low ratio mortgages, and cover the cost themselves. Having insured mortgages allows banks to off load the risk and securitize these mortgages.
Affordability is a hot topic in Canada's residential real estate market. While rising home prices mean greater value for homeowners, they can also translate to difficulties for prospective homebuyers. After all, a more expensive home will require more financing, something that can lead to more debt and ultimately foreclosure if a borrower is unable to stay current on their loan.
Data from the Teranet-National Bank's house price index shows that despite a decline in sales, home prices have continued to rise throughout the country. Overall, on a year-over-year basis, home prices increased 2 percent during May. This follows a 2 percent gain during April. Continue reading
It seems like not a day can go buy without some industry observer proclaiming that the sky is falling in the Canadian real estate market. However, if data from the Bank of Montreal is to be believed, maybe the end times aren't as certain as some may think.
While it's no secret that the housing market has cooled in recent months, the BMO's Housing Confidence Report shows that nearly half of Canadian homeowners (48 percent) intend to purchase a property within the next five years. This number is relatively unchanged from fall 2012, meaning Canadians still have a high level of confidence in the housing market. Continue reading
It seems that recent good news regarding the Canadian real estate market wasn't an isolated incident, as new data shows home prices are on the rise.
According to the Teranet-National Bank house price index, home prices increased 2 percent overall on a year-over-year basis during May. This comes after a 2 percent gain in home prices during April, creating a pattern of slow but steady growth.
Seven of the 11 cities across the country tracked by the index saw prices moving up above the national average. Quebec City saw a rise of 6.5 percent, while Calgary and Hamilton each saw an increase of 5.8 percent. Winnipeg saw prices rise 4.6 percent, Edmonton experienced an increase of 4 percent and Toronto showed gains of 3.9 percent. Continue reading
When evaluating the mortgage market, one of the best ways to understand how the industry is faring is to look at the ways consumers are going about the process of finding a mortgage. The manner in which borrowers react to rules and regulations, use various tools to search for mortgage information (including lender websites and mortgage calculators) and whether or not they choose to use a mortgage broker, are key indicators of the health of the overall market.
Recently, the Canada Mortgage and Housing Corporation (CMHC) released a survey that revealed some of that information, and its results serve to shine some light on how borrowers feel about the mortgage process in 2013.
Obviously, the internet plays a huge role in how people research mortgage options. The report states that 63 percent of consumers searched for information about mortgages online. On top of that, 84 percent of consumers researched mortgage rates online. While that already represents a large majority, it is highly likely the number will continue to grow. That means lenders and brokers who haven't already put a lot of work into developing their online footprint are far behind the curve, and those who already have put in that effort will need to continue to do so in the future. Continue reading