Are you interested in a Home Purchase? There are several things to consider when you are buying a home, including a Mortgage. A Mortgage is a loan that will allow you to purchase a home, as most people will not have the cash to buy a home outright.
Here are some key things you should know when you complete the Home Purchase Process.
What is the first thing I need to do if I want to Purchase a Home?
Contact your Mortgage Broker who will complete a preapproved mortgage on your behalf. This will allow you to shop for your new home with confidence knowing that you have your finances arranged ahead of time.
What information do I provide to my Mortgage Broker if I want to purchase a home?
You will be asked to provide confirmation of income, down payment, real estate purchase contract and Lawyer Information.
How much money do I need for a down payment when I purchase a home and how does that work?
When you purchase a home, you cannot borrow the whole amount, therefore you need to have funds for a down payment. The down payment amount is a minimum of 5% of the purchase price. If you are purchasing a home that is a higher priced property, currently above $500,000, the down payment could be 10%.
What is CMHC Default Insurance and do I need it?
If you are considering a home purchase and you have less than 20% of the purchase price as a down payment, federal regulations require that you purchase Mortgage Default Insurance. This is normally provided by CMHC (Canada Mortgage and Housing Corporation) and the cost for this insurance is added to your Mortgage debt. This insurance covers the lender in case of default by the Buyer.
What kind of Term can I choose for a Home Purchase?
The period of time you agree to the interest rate and conditions from a lender is referred to as a Mortgage Term. Most lenders will provide you with options of a 6 month to 10-year term, although a 5- year term is the most popular in Canada. Once the term has completed, you will renew your mortgage to a new term. It is important to discuss the best Term for you with your Kelowna Mortgage Broker, depending on your individual circumstance.
What is an amortization period and which option is best for a home purchase?
When you receive a Mortgage, you will have a specific number of years to pay the loan back in full. This is called an amortization period. The most popular amortization period for a home purchase is 25 years, although in some instances a longer period can be granted.
What payment options are available with a Home Purchase Mortgage?
You can choose from payments of Weekly, Bi-weekly and Monthly. Most lenders will allow you to customize your payment date to coincide with your work pay periods, which is a great way to budget. Bi-weekly accelerated is the most popular payment frequency and this option will pay your mortgage balance faster.
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Our team is devoted to helping you achieve your long term goals. Enjoy options and possibilities that you may not have considered when sticking with traditional banking products. If your goals include paying down your mortgage faster or looking for a rental income to make some headway on your amortization we are happy to discuss all of your options. Your Kelowna Mortgage Broker is able to help you with your first mortgage or renegotiating the terms on an existing property. Call John Antle Mortgages in Kelowna today and let’s get started!
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