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40 YEAR MORTGAGES - DO NOT PAY UNTIL 2047 (National
Post)
Do not pay until 2047. It has a nice ring to it
for Canadians seduced into home ownership but unable to afford the
price tag that comes with buying property. No money for a down
payment? Little cash to make monthly payments? No worries. The
Canadian real estate industry has come up with the perfect product
-- the 40-year amortization.
LENDERS GOING GREEN WITH MORTGAGES (National Post)
Kosta Hatzidimitriou was surprised, then pleased when he stumbled
upon a green mortgage for his recent purchase of a three-bedroom single-family
home.
MORTGAGE INSURANCE CHANGES MAKE HOME BUYING EASIER (CBC
NEWS)
A federal law that lowers the level where mortgage insurance is
required came into effect Friday, and bankers say the change could save many
would-be homebuyers $2,000 or more.
CMHC TO INSURE INTEREST ONLY MORTGAGES - EASIER HOME OWNERSHIP (CBC)
The Canada Mortgage and Housing Corp. is cutting the cost of
mortgage insurance in a bid to make home ownership easier and cheaper.
MAKE MORTGAGES EASIER TO GET: LENDERS' GROUP (CBC)
A national group of lenders is calling on the federal government
to make it easier for immigrants and young people to buy their own homes.
IS IT TIME TO LOCK IN (National Post)
In recent years, many homeowners have taken advantage of low
interest rates and saved a ton of money by "staying short" with variable-rate
mortgages or VRMs. But rates are rising, and many are wondering if it's time to
lock in and protect themselves from further hikes.
THE FOLLOWING are Helpful MORTGAGE TIPS.
Avoid high-cost, high-fee loans
Stay away from loans that roll a balloon payment, prepayment penalty, mortgage life insurance or other provisions into one loan. These loans often make the combined financial burden too much to bear for average borrowers.
Adjustable-rate Mortgages
Adjustable-rate mortgages (ARMs) are favorable when rates are going down or your salary is going up. Otherwise, each rate adjustment can sting. ARM holders can reduce the impact of worst-case rate hikes by saving money during the initial low-payment period, buy down loan balances and budgeting.
Clean up your credit before shopping for a home
Cleaning up your credit report before you’re in the mortgage process can result in better loan rates and terms. General guidelines for strengthening your report include: pay bills on time, limiting outstanding credit, closing out unused credit cards, resolving outstanding bills and correcting inaccurate information.
Watch out for inflated appraisals
When you’re buying a home, a property appraisal will determine the mortgage’s loan-to-value ratio. An inflated appraisal may help you close your deal, but it also can trap you with too much debt.
Don’t Apply for too many loans
Each time you apply, lenders request a copy of your credit report. Frequent inquiries can be a sign of bad credit and can adversely affect your credit rating.
What goes up, must come down
Interest rates tend to move in cycles. After a prolonged increase, a slow drop usually occurs. Savvy shoppers should keep track of longer-term trends and wait to buy until rates decline.
Natural Disasters
Early preparation reduces financial loss from tropical storm, tornadoes, floods, wildfires and other natural disasters. Insurance, home improvement loans to fortify against major damage and safeguarded paperwork help sustain homeowners and businesses through disasters.
40 year mortgages
The 40-year mortgage reduces monthly payments if you need more help purchasing a home. But it also has major drawbacks – a radically higher interest bill over the life of the loan and a much longer time to build up equity.
When you assume, you can save
Assuming an existing loan can slash you monthly loan payments and save thousands of dollars in interest if the interest rate on the assumable loan is lower that current rates.
Be honest
Tell your lender about any weird conditions you meet or unusual circumstances in your situation when you apply for your loan. Sometimes what you put on the application doesn’t tell the whole story. You may get pre-qualified based on a cursory credit check and review of your application data.
Mortgage Calculator
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This calculator will show you how much your mortgage payments would be, and how you can save thousands of dollars in interest costs while paying down your mortgage sooner. Enter the mortgage term, payment frequency, amount that you would like to borrow for your mortgage, the interest rate that will apply to the mortgage and the amortization* period for the mortgage and click "Calculate."
* Amortization is the number of years it takes to repay the entire amount of the mortgage
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