I think you should know about the mortgage rates the mortgage rates can be either Fixed Variable or Adjustable. You can have an open mortgage or a closed mortgage a closed mortgage means that it has a fixed Period of time and a fixed amount on a monthly basis and that cannot be changed over the 25 years Let’s say amortization period an open mortgage is Usually more common, and it’s more flexible. It’s open. There is no penalty if you decide to move in the future It would be very wise much wiser to have an open mortgage whereby you can Change the terms pay a small potential penalty for that the general rule is 25 years for the length of the mortgage when you’re buying a property 25 years is the time spent and That is what it currently is it used to always be 30 and in some cases it is 30 years But the rule is 25 Conventional versus high ratio mortgage.
What does that mean? Conventional mortgage is if you go to a bank advisor you do the numbers and you are able to put together enough cash for at least 20% or more of the purchase price So that is a conventional mortgage When you go to a high ratio loan-to-value? Mortgage it means that you’re going to be borrowing a lot more money, and it would be that you have cashed for Under 20% of the purchase price, so this is something that you need to determine When you do your budgeting is so important to have cash Available so that your interest payments will be so much lower getting mortgage approval When you’re thinking of buying a home? it’s really important after you’ve done the basic budgeting is to sit down with a mortgage advisor a lender and To go over the numbers what you earn.
What Are Your Expenses?
What is the type of property you can afford and to do the numbers that is? Extremely important and one of the first steps that you must do if you’re thinking of buying a property Now since the beginning of the year January 2018 in order to cut back on the debt of consumers the Canadian Government through its auspices has Dictated that there’s a 2% Extra stress test it doesn’t mean that you will be paying more on a monthly basis but it means you have to be able to qualify when the mortgage lenders and the bankers do the Calculation you have to be able to at least On paper be able to pay an extra two percent over and above the negotiated interest rate so if you have an interest rate a mortgage of 25 years at 3% you have to be able to qualify for 5% even though you’ll be paying 3% Which means for some people they won’t be able to buy that house for?
$750,000 they’ll have to Scale it back to 220 percent less of A purchase price because they won’t be qualified to buy for seven hundred and fifty thousand dollars But qualified for five hundred and fifty thousand dollars or six hundred thousand dollars So don’t go looking for a house that they can’t afford so one more thing Before I wrap up when you sit down with your real estate professional And a price is being negotiated for the purchase of a home And if there is a condition based on Financing in one offer the second offer doesn’t have that they’ve already done their numbers They already have a pre mortgage approval which I’m recommending you absolutely get The offer that does not have any condition and have their financing in order and they can waive the conditional financing they will be Definitely the offer that the seller will look at first This is a summary of the type of mortgage you can get when you’re out sitting with your mortgage lender the amortization period the high ratio mortgage and the new rules of the stress test So this gives you I hope a general overview when you sit down.