Depending on the circumstances surrounding your bankruptcy, some lenders will consider providing mortgage financing. Normally you must have been discharged for a minimum of 2 years and have 1 year re-established credit, however there are lenders who will finance you as soon as 1 day after discharge from bankruptcy. Ask Terry Moore how!
Normally a minimum down payment requirement is 5% and better, however with good credit and a stable job and a proven ability to make your payments there are programs allowing you to buy your home.
If it is a new property being sold by the original developer or builder, GST will be applicable. GST also applies to the purchase of land, an empty lot, and any property that has been “substantially renovated”.
The Property Purchase Tax (PPT) is calculated at 1% on the first $200,000.00 of the purchase price of the property and 2% on the balance over $200,000.00. First time homebuyers may be exempt from having to pay the PPT. (see “usefull info”)
Making bi-weekly accelerated payments can shave years off of the life of your mortgage. Bi-weekly accelerated payments occur every 2 weeks, which means you make extra 2 payments a year.
There will probably be a fee to change lenders, but it is never a bad idea if you’re going to save more money in interest than you have to pay in that penalty.
Every mortgage has a start and an end. At the end of your term, it is called the ‘maturity date’. The length of the term will determine the rate of interest you will pay. A term is typically 1, 3, or 5 years.
On the maturity date of your term, you can either choose to go with a different lender and a different product, or remain with that lender for a new term.
Your amortization is the total length of time it will take you to pay off your mortgage. When you first get a mortgage it is usually amortized over 25, 30 or 40 years. This means that if you maintained those terms and payment periods, your mortgage would be paid off in that number of years. However, in most cases, your amortization period will not stay constant because different borrowing terms at each renewal vary the amount of interest charged over your amortization period. The length of time to pay off your mortgage will be determined by the interest charge, the loan amount and the amount of payment you make.
Most variable mortgages give you the right to change to a fixed rate at any time at no additional cost.
A variable interest rate fluctuates. Your mortgage payment, or length of time to pay down the mortgage will lengthen or shorten with the raise or fall of the interest rate.
An open mortgage gives you the most flexibility in making extra payments towards your mortgage principal and even lets you pay off your mortgage entirely whenever you wish to. This could save you thousands in prepayment penalties.
Compared to an open mortgage, a closed mortgage offers little to no privileges in paying off your mortgage early. You cannot pay off your mortgage without attracting penalties, called prepayment penalties, from the lender
The mortgage interest rate is charged at a fixed amount and does not change during the term of your mortgage.
A conventional mortgage is usually one where the down payment is equal to 20% or more of the purchase price, and does not normally require mortgage loan insurance.
A high ratio mortgage is any mortgage that is higher than 80% of the value of the property and requiring mortgage insurance. The Canada Mortgage and Housing Corporation (CMHC), Genworth or AIG insure the lender in case of default on the loan.
Mortgage insurance is added to the amount of your loan and it is then blended into your payment schedule. These fees are calculated as a percentage of the principal amount borrowed, and added to the mortgaged amount.
A pre-approval will provide you with a confirmation of an amount you can borrow and will hold an interest rate for a specific period of time, usually 30, 90 or 120 days. If the mortgage interest rate drops before the lender advances the funds for a mortgage, you are given the lower rate. If the rates rise, you are given the rate at the time you had the mortgage pre-approved.
A mortgage broker surveys all lenders, not just banks, for the best product and rate for you. Lenders therefore provide their best rates to compete with other institutions for your business. Brokers also perform many of the costly processing and services for the lender thus enabling them to reduce their costs to mortgage brokers.
Mortgage consultants receive a commission or “finders fee” from the lender and there is no fee for you. In a few cases where there are some credit issues and the lender does not pay a commission there may be a nominal brokerage fee, but this would be disclosed to you prior to completion.
We save you time and money! A mortgage consultant is not tied to offering the mortgage and re-mortgage products of just one bank or lender. Instead, a mortgage broker can search through a wide range of mortgage options to find the best possible deal for each individual borrower. This is especially important when dealing with borrowers who have credit challenges, are self employed, or have had a previous bankrupt. Half the battle is understanding mortgages products and knowing which mortgage lender will take the most favourable view of your requirements.