23 Mar

Do I Have To Change My Banking?

General

Posted by: Kristin Stauffer

Many times the mortgage lender that best suits a clients needs is operating under a name that the average Canadian has not heard of.

 

The next logical question from clients is then, “Do I have to open up a new bank account with them as well?”.

 

The answer is no. The lender your new mortgage is with will more than likely offer only mortgage financing products and no other banking services. Gone are the days when you had to pick a bank and have all of your finances with that one institution. Online banking, email money transfers and pre-authorized debits make it simple to transfer money from bank to bank so that you can choose all of the products that are the best choices for you no matter which lender they are with.

 

If the lender your new mortgage is with does not offer banking services it is known as a Monoline Lender. There is no branch to visit and any changes or questions you have in regards to your mortgage can all be directed back to your mortgage broker who will service your mortgage for you as long as you are with that lender.

 

Your mortgage payments will be automatically withdrawn from any chequing account you currently have set up on the day of your choosing, with no extra work required from you!

 

Got a mortgage question? I have your answer!

http://angrybirdsgamer.com
http://angrybirdsgamer.com

9 Mar

What a 30 Year Amortization Can Do For You

General

Posted by: Kristin Stauffer

The maximum amortization for a traditional residential purchase in Canada that has less than 20% of a down payment is currently at 30 years.

 

Who wants to have a mortgage for 30 more years?! For most owner-occupied homeowners the answer is “I don’t, thank you very much!”. Well, there are some reasons to take an amortization slightly higher than what you qualify for.

 

The first reason is to get used to your new payments and your new house. More often than not your payments will now be higher than where you were living before. This is especially true for first-time home buyers who were used to renting. You now have a lot of extra expenses to pay and that can be overwhelming, particularly in the first year. Then there’s the added costs of your new home. Did the furnace break in the first month? Do you need to buy
a lawnmower for your new backyard? Taking a 30 year amortization to lower your payments for that first year is often the best idea to free up your cash flow.

 

The second is something that is very relevant today in our unsteady and slowly recovering economy, which is job loss. Let’s say you’ve taken advantage of some prepayment privileges for your mortgage. You filed your tax return and received a refund, so you put it all towards your mortgage to pay down the principal. Or you increased your payments by $50 bi-weekly because you had some extra cash flow. Now you’re sitting at a much lower amortization than what you started at, maybe closer to 20 years. If you lose your job and need to decrease your payments you can do so with a majority of lenders back up to the original amortization or very close to it.

 

One thing to keep in mind is that taking a 30 year amortization typically does not mean you’ll have your mortgage for life – even though it may feel that way at first. With all of your options available to you to make lump sum prepayments or increase your payments to lower your amortization, we can get you mortgage free faster.

 

An annual review is key as well to ensure you’re on the right track – if your current mortgage provider does not do this maybe it’s time to find somebody who will take that time for you.

 

Got a mortgage question? I have your answer!

http://angrybirdsgamer.com
http://angrybirdsgamer.com