Arranging a Mortgage
With the Canadian government tightening lending guidelines nearly every quarter, arranging a mortgage can be an overwhelming process. I recommend working with an experienced mortgage broker to get a comprehensive borrowing strategy and a great rate.
The team at 4Front Mortgages works with over 50 lenders to get you the right lending package for your needs. Their specialties include:
- · First time home buyers
· Investment properties
· Construction financing
· Refinances and equity take-outs
· Private lending
- Key Terms
Knowing the key terms that are part of the mortgage process
can help guide your first conversation with your mortgage broker.
Amortization - Length of time over which the mortgage will be repaid.
Mortgage Term - Length of time that the mortgage contract conditions and interest rate is fixed.
Closing Costs - Costs in addition to the purchase price of the home that are payable on closing day. See the Process & Costs worksheets for more details.
Down Payment - The portion of the home price that is not financed by the mortgage loan. It must come from the buyer’s own funds or other eligible sources before securing a mortgage.
Equity - The difference between the price for which a home could be sold and the total debts registered against it.
Fixed / Variable Mortgage Interest Rate - A fixed rate is a locked-in rate that will not increase for the term of the mortgage. A variable mortgage interest rate can fluctuate based on market conditions, but the mortgage payment remains unchanged.
High-Ratio Mortgage / Conventional Mortgage - A high ratio mortgage is a mortgage loan higher than 80% of the lending value of the property. A conventional mortgage is a mortgage loan up to a maximum of 80% of the lending value of the property.
Open / Closed Mortgage - An open mortgage is a flexible mortgage that allows you to pay off your mortgage in part or in full before the end of the term. A closed mortgage, in some cases, cannot be paid off in whole or in part before the end of the term. In other cases, the lender may allow for partial prepayment of a closed mortgage in the form of an increased mortgage payment or a lump sum prepayment.
Break Penalty -
If you break your mortgage contract early, likely if you choose to sell your
home or refinance it, you will have to pay the lender a penalty called a break
penalty (also called a prepayment penalty). The amount will depend on a variety
of factors including whether you chose a fixed or variable rate mortgage, the
terms of your contract, and how much time is remaining on your term.
To begin the approval process, contact the 4Front Mortgages Team today. Don’t forget to tell them Patrick sent you!