Now for tip #2, get pre-approved for a mortgage and know your limit. You do not want to fall head over heels for a home only to find out you cannot afford it. Ask for your spending cap then let your Realtor® know your limit. There are a
variety of programs available to Realtors® specifically designed at searching listings using client criteria.
Generally speaking, a mortgage is a loan obtained to purchase real estate. The “mortgage” itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest. I checked the interest rates today at the East Coast Credit Union ( 902-295-3477 ) and the Royal Bank( 902 295 2224 ), both located on the main street called Chebucto Street. Rates are competitive; you should consult a mortgage specialist to determine your needs. Ask about accelerated payments and if you may pay a lump sum on the anniversary date of the mortgage, that is applied directly to the princple as some lending institutions allow this option.
When you are pre-approved for a mortgage you can shop with confidence. Issues to discuss at this point are penalties
of paying off your mortgage early, current mortgage rates and closing costs. You should also find a lawyer and ask what he/she will charge to act on your behalf. Typically they will charge a fee plus disbursements. The disbursements can add up quickly so get an estimate of the total cost of their services.
Next week… Know Your Area
Terri Brewer
Catherine E. Harvey Realties
Baddeck, N.S.
902 295 2364ph 902 295 3019 fax
www.harveyrealties.com
Mortgage insurance is not something everyone things about when they start shopping for home. Home buyers putting down 20% or more of the purchase price don’t have to worry about mortgage insurance. (note: this post is about mortgage insurance in Canada) So ‘what is mortgage insurance?’ you ask? Read on…
What is mortgage insurance?
Mortgage loan insurance is typically required by lenders when Canadian home buyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protects lenders against mortgage default, (hence the other name mortgage default insurance) and enables consumers to purchase homes with as little as 5% down payment — with interest rates comparable to those with a 20% down payment.
How much does mortgage default insurance cost?
To obtain Mortgage Loan Insurance, lenders pay an insurance premium. Typically, the lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.
The most mortgage insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house cost you borrow, the higher percentage you will pay in insurance premiums.
Are mortgage default insurance and mortgage life insurance the same thing?
Mortgage loan insurance and mortgage life insurance are NOT the same. Default insurance protects the lender from you defaulting on your mortgage. Mortgage life insurance guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.
Hopefully this gives you a brief overview of mortgage insurance… drop me a line if you have any more questions.
Terri Brewer
Catherine E. Harvey Realties Ltd.
902-295-2364 ph, 902-295-3019 fax
902-295-3472 home
