Squamish Realtor: Marylene Desroches

Mortgage Info

Arranging Your Mortgage

Mortgage payments are made up of a principal sum (the amount borrowed) and interest (the cost to you of borrowing money). The best plan for any type of mortgage is to minimize the amount of interest you pay - and lenders offer several ways to help do this.

Mortgage Calculator
A larger down payment means your home ultimately costs less because a smaller mortgage means less interest.
A shorter amortization, the period over which a loan is repaid.
A weekly or biweekly payment schedule, instead of monthly. By making payments every two weeks, instead of monthly, a 25-year mortgage can be reduced to 20 years.

Sea To Sky Mortgages

You don’t have to get your mortgage from the same place you have your savings or chequing accounts. Also, at the end of each term, you may be able to change the options of your mortgage, such as the payment schedule, the term, the rate or even who holds the mortgage.

Mortgage Features

Prepayment: Ensure that you have some form of prepayment clause in your mortgage that will allow you to pay down your mortgage with a lump sum, or an extra payment, without penalty.
Portability: If your loan is not insured, your lender may require a property appraisal at your expense. A basic appraisal for mortgage cost between $150-$250.
Assumability: If you have a high-ratio mortgage, your lender may require that you have your property tax installments added to your mortgage payments.
Expandability: Your lender will require an up-to-date survey. Ask the vendor to provide one as a condition of your Offer to Purchase, or you will have to pay to have one done.

Types of Mortgages

Conventional Mortgage: The insurance covers the replacement value of the structure of your home and its contents. Your lender will insist on this because your home is the security for your mortgage.
High-Ratio Mortgage: You will have to reimburse the vendor on a prorated basis if some bills have been prepaid beyond the closing date.
Second Mortgages: In British Columbia there is 1% of the first $ 200,000 and 2 % of the remaining of the purchased price.
Open Mortgage: You’ll be charges a fee to hook up new services and utilities, such as your telephone, at your new home.
Closed Mortgage: Lawyers’ fees for a mortgage range widely depending on the complexity of the deal but will probably be at least $800.

What a Lender Wants From You

Personal information – age, marital status, dependents
Details of employment, including proof of income (T-4 slips, personal income tax returns or a letter from your employer stating your position)
Other sources of income, for instance, pensions or rental income
Current banking information
Verification of your down payment
Consent to run a credit investigation
A list of assets, including property and vehicles
A list of liabilities, for example, credit card balances, car loans - the total amount you owe and your monthly payment amounts
Fees for an appraisal or for a copy of a valid appraisal report if one was recently done
Mortgage insurance fees if a high-ratio mortgage is required
A copy of the property listing
A copy of the Agreement of Purchase and Sale on a resale home
The condominium financial statements, if applicable.

Approval Process: A mortgage approval should take only a few days. During this process, the lender will do a credit check and spot check other information you have provided. In addition, an appraisal of the value of your home may be obtained. If required, a request for mortgage loan insurance is submitted to CMHC or a private insurer. The lender then approves or rejects your mortgage loan.
Pre-approval: With pre-approval, your lender approves the amount of your mortgage and gives you a written confirmation or certificate for a fixed time period before you start looking for a home. The pre-approval term, usually lasting from 60 to 90 days, also sets the mortgage rate the lender will offer to you. If rates go down in that period, the lender should offer you the new lower rate

Mortgage Loan Insurance

When you need a mortgage loan that is more than 75% of the purchase price of your home, a mortgage loan insurance maybe required. It protects the lender and, by law, most Canadian lending institutions require it.

Having mortgage loan insurance means that if you, the borrower, default on your mortgage, the lender is paid back by the insurer - CMHC. With the risk of losing their money removed, lenders have the confidence to make mortgage loans of up to 95% of the purchase price of the home (subject to price ceilings). That means your down payment can be as little as 5% of the house price. With mortgage loan insurance, many Canadians who might be unable to obtain a 25% down payment can still buy a home.