There are many factors you have to decide on before finalizing your mortgage decision. The key factors are amortization, term of the mortgage, open or closed mortgage, prepayment privilege, interest rate options, interest averaging, payment schedules, and assumability, and portability. A brief explanation of the first four items will be discussed in this Part I. […]

There are many factors you have to decide on before finalizing your mortgage decision. The key factors are amortization, term of the mortgage, open or closed mortgage, prepayment privilege, interest averaging, interest rate options, payment schedules, assumability, and portability. A brief explanation of the first four items was discussed in the last column, Part I. […]

You may have heard of people who invest in private mortgages by buying an existing residential mortgage. This can be done directly with the owner, or through a mortgage broker. This form of investing may or may not interest you, but it is helpful to at least understand the concept. When buying an existing mortgage, […]

A “vendor mortgage” is sometimes referred to as a “vendor-back” or “vendor take-back” mortgage. Here, the vendor encourages the sale of the property by giving the purchaser a loan on the purchase of the property. For example, if the purchaser is able to get 75 per cent conventional financing but does not have sufficient funds […]

Many Canadian seniors prefer to remain in their own homes as long as possible for a variety of reasons, including a comfortable feeling of security, familiarity, happy memories and an emotional connection to the neighborhood and community. In addition, many seniors prefer to remain in their home due to the support network built up over […]

There is a tremendous amount of competition and money available at present in the mortgage lending market. Lenders want your business, and will offer you many incentives to entice you, especially if you are willing to transfer your existing mortgage financing. For example, some lenders are willing to absorb your legal, appraisal and/or transfer fees, up to a certain limit.

Have you thought about the idea of remaining in your home, getting some cash out of the equity to enhance your lifestyle needs, and not having to make any payments on the loan or repay the loan until your surviving spouse dies? If you or your parents are 62 years of age or older, this is an option you may wish to explore. The concept is referred to as a “reverse mortgage”.

This is a very important feature to have in your mortgage if it is a closed mortgage. If your mortgage is open you can pay in part, or in full the balance outstanding on the mortgage at any time without penalty. If, on the other hand, you have a closed mortgage that does not have any prepayment privileges, you are locked in for the term of the mortgage (three years, for example) without the privilege of prepaying without penalty.

Mortgage lending has become very complex, with constantly changing rates, terms and conditions. Each lending institution has its own criteria that apply to potential borrowers. Some insist on a particular type of property as security, while others require a certain type of applicant. In this latter case, factors such as type of employment, job stability, income and credit background are weighed. There is a broad range of philosophies and policies held by the various lending institutions on the issue of security and applicant qualifications in order for a lender to advance mortgage funds. These are subject to change from time to time.

Many people are not aware of the various factors that can affect mortgage interest rates. Once you have a better understanding of these factors, it will improve your knowledge of the way the mortgage money system operates, and increase your confidence and skill when selecting and negotiating your mortgage.