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Exploring These Great Links to Learn More About Mortgages

Our recent articles have explained some of the considerations homebuyers should keep in mind when selecting mortgage plans, but choosing a mortgage is a complicated process that requires much more research. Read these articles to learn more about the mortgage lending process, and contact Get A Better Mortgage, Inc. at (647) 800-2175 with your questions. At Get A Better Mortgage, we’ve dedicated ourselves to helping Canadian homebuyers save money—let us help you.

• When you pay less than 20% of your mortgage up-front, you must also purchase high-ratio default insurance. Learn more about high-ratio lending from the Canada Mortgage and Housing Corporation.
• For detailed information about the Canadian mortgage market, read this report from the Bank for International Settlements.
• Bankrate.com explains the qualification requirements, advantages, and disadvantages of high-ratio mortgages.
• Are you worried that you’re making a mistake in your mortgage application process? Review these 9 common mistakes from AskMen Canada to make sure that you haven’t made a serious error.
• YourMoney.ca offers some general advice on avoiding common mortgage mistakes.

Avoiding Common Mortgage Mistakes

Buying a house is a major financial investment, and if you don’t take the time to ensure that you’re getting the best possible deal, you’ll spend years paying for your mistake. Fortunately, a number of companies and consumer advocates are available to help you find the right choice. Here are three steps to take in order to avoid common mortgage mistakes:

Understand the Types of Mortgages

Most mortgages are either fixed-rate mortgages or variable mortgages. Each has advantages and disadvantages. Fixed-rate mortgages require you to pay the same percentage of your total cost every period, providing stability and consistency—however, if housing costs fall, you’ll be stuck paying at the previous, more expensive rate. Variable, or adjustable-rate, mortgages fluctuate with the market. Because costs generally increase, however, they also start at significantly lower rates.

Get Pre-Approved

Pre-qualifying for a mortgage only means that the mortgage company is interested in vetting you as a customer—don’t confuse pre-qualification for pre-approval. When you are pre-approved by a mortgage company, it means that they’ve done the math and can offer you hard figures about your mortgage rates. By seeking pre-approval, you can make accurate predictions about your future mortgage situation.

Shop Around

Just like with every other commodity, you can find the best product at the best price if you compare mortgage rates from various companies. Make sure you understand exactly how much money you need to borrow, and find a company which can offer you that amount at the lowest cost. Overpaying on a mortgage can be extremely expensive, so take the time to find the best mortgage for your particular situation.

At Get A Better Mortgage, Inc., we’re dedicated to helping Canadian homebuyers find and renew their mortgages in order to help them get the best possible deals on their homes. If you need help financing your new home purchase, contact our office at (647) 800-2175.

This Month in Canadian Real Estate

Canadian home prices rose 1.4% from January to February to an average of $373,000, and mortgage rates remained unchanged at 5.24%. Because buying a house is one of the largest purchases you’ll ever make, it’s important to find a mortgage counselor who you trust to guide you through the home-buying process.

Fortunately, once you find a trustworthy expert, you won’t have to spend too much time consulting with him or her. According to KW Research, most real estate consultations end within 90 minutes. Because mortgage agents are experts in their field, they can convey all the information that you need in very little time and dedicate their efforts to ensuring that you find just what you need.

For more information about finding the perfect mortgage plan, contact Get A Better Mortgage, Inc. at (647) 800-2175. At our Toronto offices, we can help you find the house of your dreams at a price you can afford.

High-Ratio Mortgages vs. Conventional Mortgages

Typically, homebuyers are required to provide 25% of their home’s total cost in order to qualify for conventional home mortgages. However, as the cost of homes increases, this has become less plausible for many homebuyers. High ratio mortgages allow buyers to pay a much smaller fraction of their costs up-front—but they do have some disadvantages. Here are some of the differences between high-ratio and conventional mortgages.

Initial Costs

While traditional mortgages generally require buyers to pay 25% up-front, high-ratio mortgages allow them to pay as little as 5%. This gives buyers much more flexibility, allowing them to keep money in investments, use it for renovations, and cover other costs. Even buyers who can afford to pay a larger percentage of their total mortgage costs at once may choose high-ratio mortgages, as these plans allow them to distribute the cost of their homes over time and permit them to retain more of their money if their financial situations are uncertain.

Default Insurance

Because lenders require smaller down payments for high-ratio mortgages, they require protection for their investments. The 25% initial cost is enough for most traditional mortgage lenders to use as collateral, but high-ratio lenders require that buyers purchase default insurance to cover the lenders’ risk. The cost of this insurance will be added to your total mortgage cost and paid off over time—the smaller your initial down payment is, the higher this cost will be.

Eligibility

Although situations in which Canadian buyers were eligible for high-ratio mortgages were initially limited, requirements have become much less stringent. To qualify for a high-ratio mortgage, you must provide a down payment of at least 5%, purchase a home that is intended to be your primary residence, and offer documentation to prove that you are capable of affording your mortgage plan.

If you’re looking for the best high-ratio mortgage for your new property, contact Get A Better Mortgage at (647) 800-2175. We offer market analysis to ensure that first-time homeowners find the best deals on their Toronto homes. To learn more, call us or visit our website.

Looking For A Better Mortgage!?

Have you gained some valuable information from reading our recent blog posts, which have discussed common mortgage application roadblocks and mortgage refinancing? If you would like to learn more about either of these topics, the following resources may be of interest to you. For exceptional mortgage consultation advice in Toronto, call Get a Better Mortgage, Inc. at (647) 800-2175.

• If you are trying to determine whether you are ready to take out your first home mortgage, this information provided from the Canada Mortgage and Housing Corporation may help.
• The Independent Mortgage Brokers Association of Ontario’s website has a helpful overview of residential mortgages available on its website.
• Find out what type of education and training mortgage brokers in Ontario must complete before they can assist you in finding a home with the help of this Financial Services Commission of Ontario resource.
• Read up on some common reasons why mortgage loan applications are denied in this Yahoo! Voices article.
• At BankRate.com, you can read about some common circumstances in which it may be a smart idea to refinance your mortgage.