FINANCING YOUR HOME
LENDER INITIATES THE FOLLOWING:
- Orders credit report on buyer
- Verifies buyers bank account
- Prepares loan package
- Verifies buyers employment
- Orders appraisal
- Forwards loan approval to lawyer
I WILL ARRANGE THROUGH DIFFERENT LENDERS OVER 1% BELOW THE POSTED CURRENT RATES FOR CLOSED MORTGAGES.
Canada Morgage & Housing Corporation insures mortgages up to 95% for 1st time buyers as well as repeat buyers to protect the lending institution in case of a default in the loan.
Registered Retirement Saving Plan - buyers can use up to $20,000 as down payment on the purchase of their home from RRSP funds.
The first mortgage is the portion of the total debt registered against your property which is secured by the first charge against the property.
An open mortgage is one that allows the borrower to repay the loan more quickly than agreed either on anniversary dates or regular monthly payments, with or without repayment charges.
A closed mortgage is one which does not allow the borrower to repay the loan more quickly than agreed. Payments must be made as specified in the agreement. If extra payments are allowed, the lender has the right to levy a prepayment charge. These may be specified in the mortgage agreement.
With a buydown mortgage, the loan is taken out for a full term, usually 25 years, at prevailing rates. the builder,the seller, the relative or even the buyer provides a cash payment to the lender when the mortgage is made to lower the buyer's monthly payments during the early years of the loan.
As a seller, you can finance a first, second or third loan. You loan your equity back as a mortgage (often called a "take-back") or help the buyer in other ways. A common form of owner financing bases monthly payments on a 25 year loan scale, but requires the balance of the mortgage to be paid at the end of short period, i.e. 5-7 years. This type of loan is commonly called a "balloon" mortgage.
In an assumable mortgage, the buyer "takes over" or assumes the mortgage obligations of the seller (subject to agreement of the bank or lending institution). The down payment is difference between the new purchase price and the existing mortgage balance. The interest rate does not change, which may be lower than today's rates. An assumable mortgage is appealing to buyers because it gives them the opportunity to get financing at lower rates. However, if the buyer is unable to make mortgage payments the lending institution may hold the vendor liable.