03/10/2022
BASIC ADVISE
9 Things Canadians Should Know About Mortgages In Canada
1)Canadian Credit Scores
Canadian credit is based on :
-35% the record of timely payments on other loans
-30% the amount of outstanding debt
-15% the length of credit history
-10% the number and types of accounts opened recently
-10% the mix of credit accounts, credit cards, department stores, finance companies, bank loans, etc.
2)Pre-Approval For Canadians
-Getting a Pre-Approval on a mortgage can guarantee an interest rate for a stated period while you look seriously to purchase a home
-Canadians can identify what homes are in their price range and as well unlock financial benefits that will save you money in the long run
3)Down Payments In Canada
Its expected that a homebuyer must be prepared to pay a 5% down payment of the total cost of the property. However, those who are able to pay 20% or more may have some financial flexibility in their ability to avoid paying the high ratio mortgage insurance premium (CMHC)
4)Closing Costs For Canadians
Canadians need between 1.5%-2.5% of their home purchase price to cover land transfer taxes, PST on CMHC premium, home inspection fees, legal fee's, appraisal fee's, property tax, property insurance and more
5)Canadian Interest Rates
-Fixed mortgages locks into a fixed mortgage payment term which means the rate will remain the same, most common with 5 year terms
-Variable rate mortgages allows the interest rate to fluctuate. Tied to a Lender's prime rate
6)Mortgage Payment Schedules
-Canadians have the option of paying their mortgage monthly, bi-weekly, or weekly. This allows individuals to choose the payment plan suitable for their lifestyle and opens up potential of becoming mortgage free even faster
7)Mortgage Pay Back Time Period
The longer your pay back plan is, the smaller the monthly payments you will have to make. However, your total interest paid will be much higher than if your payment plan was shorter
8)Mortgage Terms In Canada
This is a period in which Canadians are "locked in" to a particular mortgage rate. This period can be as brief as 6 months or as lengthy as 5 or more years. Once expired, Canadians can renegotiate the terms
9)Mortgage Type For Canadians
Open Mortgages: allows borrowers to pay off their mortgage in full without penalty whenever they like. However , these mortgages come with higher interest rates
Closed Mortgages: Often have a lower interest rate but does not offer the same flexibility that an open mortgage does
