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Our Mortgage Specialist, Hildegard O'Connell, can assist you to
arrange the financing of your home at your convenience. Her
experience will help you find the best solutions to fit your needs.
She is a mortgage professional with over 15 years experience and can
help you achieve your dream home.
To contact Hildegard, click here:
http://mdm.scotiabank.com/hoconnell
You can use these handy calculators to help you if you are thinking
of buying a home or transferring or refinancing your existing
mortgage:
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Figure out how much you can afford to spend on a
home
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Determine what your mortgage payments will be
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Compare different ways of paying your mortgage
off faster
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Add lump sum or top-up payments to your mortgage
calculation
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See your amortization schedule (which provides a
breakdown of principal and interest payments for the life of the
mortgage)
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What is a pre-approved mortgage?
It's a written commitment from a lender
that you will get a mortgage for a set amount interest
rate, locked in for 60-120 days, depending on the
lender. The commitment is subject to a financial
assessment and property appraisal. This service is
always free and without obligation.
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Why do it?
A pre-approved mortgage gives you an edge.
Before you even start house hunting, you'll know how much you
can afford, your interest rate, and your monthly payments. With
your financing already mapped out, you can concentrate on
finding the right home in your price range.
A pre-approved mortgage shows you're a serious
buyer. In a situation where several people are bidding on the
home you want, you may decide to offer the list price and beat
our earlier offers.
When your offer is accepted on the home of your
choice
You're in the home stretch, finalizing the
details of your mortgage and closing the purchase of your new
home. Now you need to call your mortgage specialist and send
them the following information:
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A copy of the real estate listing
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A copy of the accepted Offer to Purchase
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Information on the source of your down
payment
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Income verification if you are employed
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A letter from your employer verifying your
place of employment and income, or T4s and Notice of
Assessment, or T1 General Tax Return and Notice of
Assessment
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Income verification if you are self-employed
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3 years of Financial Statements and 3 years
of Notice of Assessments, or 3 years of T1 General Tax
Returns and 3 years of Notice of Assessments
Processing the mortgage application
Your mortgage specialist will want to verify the
value of the property you are buying, your current financial
picture and your credit history, so a property appraisal and
credit report will be ordered.
If your down payment is less than 25% your
mortgage is considered "high ratio" and you must pay insurance
premiums. You decide whether you want to pay the premium in cash
or have your lender add it to your mortgage amount. Your
mortgage representative can contact Canada Mortgage and Housing
Corporation (CMHC) or GE Capital Mortgage Insurance Company Of
Canada (GEMI) to make the arrangements.
Be prepared to pay fees for the mortgage
application, credit report and property appraisal.
Closing the purchase
Closing day is the day you become the official
owner of your home. However, the closing process usually takes a
few days.
Typically, you visit your lawyer's office to
review and sign documents relating to the mortgage, the property
you are buying, the ownership of the property and the conditions
of the purchase. Your lawyer will also ask you to bring a
certified cheque to cover the closing costs and any other
outstanding costs.
Once your mortgage and the deed for the property
are officially recorded, you become the official owner of the
property.
Mortgage Terms Explained
Mystified by all the financial jargon used to
describe mortgages? Here's a quick overview of key terms to help you
understand the language--and make the process clearer and easier.
Mortgage:
A personal loan used to purchase a property. You
pledge the property being purchased as security for the loan.
Down Payment:
The portion of the purchase price that you pay
initially as a lump sum; the rest is financed by your financial
institution. A down payment is generally up to 25% of the
purchase price.
Principal:
The amount of your loan.
Interest:
This is added to the amount you have borrowed to
compensate the lender for the use of their money. Your mortgage
is repaid in regular payments which are applied toward the
principal and interest.
Term:
The number of months or years the mortgage
contract covers (typically six months to five years), during
which you pay a specified interest rate.
Amortization:
The number of years it will take to repay the
mortgage in full. (This is usually longer than the term of the
mortgage). For instance you may have a five-year term amortized
over 25 years.
Equity:
The difference between the value of your
property and the amount you still owe on the mortgage.
Conventional Mortgage:
Offered to buyers who make a down payment of 25%
or more of the appraised value of the purchase price.
High Ratio Mortgage:
Offered to buyers with a down payment of less
than 25%. This type of loan must be insured against default by
the federal government through the Canada Mortgage and Housing
Corporation (CMHC) or an approved private insurer (the lender
usually arranges this). The borrower pays a one-time insurance
premium to the insurer (ranging from 0.5% to 3.75% depending on
the size of the loan and value of the home; additional charges
may also apply). The premium is usually added to the principal
amount of the mortgage. If you default on your mortgage, the
lender is paid by the insurer.
Fixed Rate Mortgage:
Carries a set interest rate for a specified
period of time (the term of the mortgage). The regular payment
of the principal and interest remains the same throughout the
term. The benefit of choosing this option is that you are
protected if interest rates rise.
Open Mortgage:
Gives you the flexibility to make unlimited
pre-payments or lock into a fixed term at any time. This loan's
interest rate changes periodically, and is tied to the prime
rate. This type of mortgage is popular when interest rates are
expected to fall or remain stable.
Portability:
If you are selling your home and buying another,
this option allow you to take your mortgage - with the same
term, rate and amount - and apply it to your new house. If your
mortgage isn't portable, don't sign for a longer term than
you're likely to stay in the house or you could wind up paying a
penalty to break the mortgage agreement.
Assumability:
This feature allows the buyer of your house to
take over or "assume" your mortgage. If your mortgage has a
fixed interest rate lower than current rates, it could be an
attractive selling feature.
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