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Mortgages: Tips for Any Buyer
The Downpayment
The down payment is the money you put forward toward the price of a home – and is often the most challenging part of buying a home. The larger the down payment, the less your home with cost you in the long term. At the same time, it is important to be realistic about exactly how much you can afford as a down payment. Over stretching your finances to make a larger down payment can lead to you being cash strapped in the future, and hence having to borrow money on a credit card or a line of credit, at a higher interest. Think long-term when making this decision.
Making your Purchase More Affordable
Typically, lenders require mortgage loan insurance for anyone who wants to purchase a home with less than 20% of the purchase price. The Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages for amounts that exceed 80% of the value of the home, without mortgage loan insurance. Through your lender, CMHC Mortgage Loan Insurance enables you to finance up to 95% of the purchase price of a home. The premium charged by the CMHC for such loans decreases as the down payment increases. Even still, depending on the circumstances, there can be ways to maneuver around these insurance premiums.
The Mortgage Payment Schedule
When most people think of their mortgage payments, they think in terms of monthly installments. However weekly or bi-weekly mortgage payments have been growing in popularity with home owners across Canada, and many institutions now offer these payment options. However, making weekly or bi-weekly (where you make a half-payment every two weeks) payments will save you money. With bi-weekly payments, for instance, you will make two more half payments per year towards your mortgage. This might not seem like much, but it does add up. The end result is you pay off your mortgage sooner and you save money.
A second reason why making weekly or bi-weekly payments can be advantageous has to do with employment income. If you receive your income on a weekly or bi-weekly schedule, then your budget can be simplified if you similarly schedule your mortgage payments.
Mortgage Payment Plans
Privilege payment options are an essential component of a mortgage; they can lead to big savings and thus they are a very important aspect to any mortgage. These payment options allow the mortgage holder to make lump sum payments, usually on an annual basis. Exactly how these payments can be made and when vary widely across financial institutions, so it is important to understand your mortgage specifics. A privilege payment of 10%, for example, means you can pay off 10% of your mortgage per year, in addition to your regular mortgage payments. In general, the more flexibility in this payment option, the better. Even just paying off an extra $1000 a year will shave off a lot of interest over the lifetime of the loan.
Fixed versus Variable Interest Rates: What’s Better
A 2001 study by a York University professor determined that in about 90% of the time, it was better to have chosen a variable interest rate in your mortgage, down to 77.1% of the time, if you had good negotiating skills and credit. At the end of the day, your own risk tolerance plays a big part in making the decision of whether to go variable or fixed, as does your own cash flow availability.
Taking a variable mortgage rate can lead to savings because with a fixed rate, the banks charge a premium to accept the risk that money may not be so cheap in the future. At the same time however, you are accepting the interest rate without any guarantee. It is important to ensure you speak with a mortgage expect to make the right decision for you
100% Satisfied
Hi Jasmine,
You can always provide my number for references. I’d say we are 100% satisfied with your services and recommend you as very well informed & knowledgeable person for searching a new home. I’d quote to anyone approaching you for realtor services that you’re an awesome realtor, great advisor and provide honest evaluation about property that brings value to the client. You have rich experience and knowledge about Mississauga, Milton, Oakville and Brampton localities. You do not push clients to getting into a deal and have a lot of patience.
The only thing I’d say you can do is to be a little pushy when you see that there’s a extraordinary deal out there that your client is missing by a couple of thousand dollars then just suggest them to stretch a little bit and take a plunge. Because this would at the end make a client happy and they will very soon forget that extra money spent.
I wish you all the best !
Thanks,
Deepaq Arora
#911 – 3700 KANEFF CRES Mississauga, ON
#911 – 3700 KANEFF CRES
Mississauga, ON L5A 4B8
Price: $214,000
General Description
Sun-Filled Corner Unit Features 2 Bedroom And Den, Open Concept Floor Plan That Begins With A Spacious Entry Into The Living And Dining Room. Huge Master Bedroom With Ensuite Bath. Wood Floors Throughout. Steps To Square One, City Hall, Ymca, Library, Transit At The Door Steps. One Bus To Subway. Go Station. Building Amenities: Indoor Pool, Exercise Room, Party/Meeting Room, Visitor Parking, Sauna, Concierge, Security Guard. **** EXTRAS **** 2 Fridges (One Is A Yr Old), Stove (1 Mth), D/W, Washer+Dryer (1 Yr). Upgraded Elfs, 2 Ceiling Fans, 6 Door Solid Wooden Wardrobe. Window Coverings. Den Can Be Used As 3rd Bdrm. Excl.: Microwave Oven. Huge Ensuite Locker And 2 Closets.
Property Features: Exercise room
Maintenance Fees: $526.72 Monthly
Pool Type: Indoor pool
Parking Type: Underground, Parking pad
Building Type: Apartment
Cooling: Central air conditioning
Exterior Finish: Concrete, Brick
Fire Protection/Security Type: Security guard
Storeys: Multi-Level
Heating Type: Forced air
Heating Fuel: Natural gas
Rooms:
Type Level Dimensions
Living room Flat 6.71 m x 3.74 m
Dining room Flat 6.71 m x 3.74 m
Kitchen Flat 3.51 m x 2.29 m
Master bedroom Flat 4.9 m x 3.51 m
Bedroom 2 Flat 3.81 m x 2.87 m
Den Flat 2.75 m x 2.41 m
Additional Costs When Buying a Home
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The purchase price of your home is only one of the costs you’ll encounter. Here are other possible costs you need to consider:
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Mortgage loan insurance: If you are putting less than 20 per cent of the house value down, you’re going to need mortgage loan insurance. Depending on the lender, the premium can be added to mortgage payments.
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Appraisal fee: Lenders typically loan a percentage of the home’s purchase price or the market appraisal of the property. Cost depends on the size and complexity of the assignment.
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Land survey: The lender may ask for a current survey or certificate of location before signing off on the loan. There can be a substantial cost for having a new survey done on the property.
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Deposit: A deposit normally goes with the formal offer to purchase.
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Insurance: The lender will require proof of property insurance for the replacement value of the house and its contents from the day you take ownership.
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Title insurance: Provides coverage in case of problems with the property title among other things. The cost is relatively low, usually a few hundred dollars.
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Application fee: Some lenders will pass on the cost to process your application. These fees vary and some lenders will waive entirely if you have other accounts with them.
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Mortgage broker’s fee: If you use a mortgage broker, a fee may be charged to arrange a mortgage on your behalf.
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Home inspection fee: An inspection protects the buyer by revealing any problems in the property that you’d want to know before you move in.
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Legal fees: You can save some of the legal fees usually charged by the lender if your lawyer draws up the mortgage. You’ll also pay for disbursements which are the costs involved in drawing up the title deed, conducting a title search, and preparing and registering the mortgage.
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Land Transfer Tax: Use the land transfer tax calculator accessible from the home page of this website to calculate both your Ontario and City of Toronto (if applicable) land transfer taxes. First time home buyers qualify for a maximum $2,000 (LTT on a $227,500 home) provincial rebate and a maximum $3,725 (LTT on a $400,000 home) City of Toronto rebate.
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Goods and Services Tax: Resale (used) homes are exempt from GST but it does apply to newly constructed homes and may qualify for a partial rebate depending on the sales price and if the home is going to be your primary place of residence.
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For new homes costing $350,000 or less, you will receive a GST rebate of 36% of the GST paid to a maximum of $8,750. The rebate for new homes costing between $350,000 and $450,000 declines to zero on a proportional basis. GST also applies to most of the services provided in completing the real estate transaction.
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Other costs: These include moving costs, fees charged by utilities for service hook-ups, property tax and other adjustments (an adjustment takes place when the seller has already paid for something in advance and wants to be credited for the unused portion on the date the house becomes yours), and ongoing maintenance (condo fees etc) and utility costs.
335 Rathburn Rd W 2103 Mississauga Ontario – SOLD
** SOLD **
335 Rathburn Rd W 2103
Mississauga, Ontario L5B0C8
Price: $254,000
W15 465-40-K
SPIS: N
Taxes: $2,057.54/2010
Last Status: New
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