1. How the penalties are calculated if I break my mortgage early? Specifically, ask what rate they use to calculate the “interest rate differential”. Typically, if the lender has “posted rates” they use these to calculate the penalty. If this is the case, the penalty can be 3, 4 or even 5 times higher than […]
First Time Mortgage Tips
Negative Amortization
Negative amortization is a situation where your mortgage payment is not enough to cover the interest due. The interest then builds up and your total principal owing increases instead of shrinking. Negative amortization can occur when you have a fixed-payment variable-rate mortgage and prime rate rises. When considering a variable product you should always consider one that […]
5 C’s Of Mortgage Lending
Collateral – The property itself that you are hoping to purchase. Capital – Where is your down payment coming from? At a minimum, you need 5% down for a “high ratio” insured mortgage or a “conventional” mortgage with 20% down. This money can come from your own resources or can be gifted from a family […]
Co-Signor or Guarantor For A Mortgage
If a buyer can’t obtain a mortgage due to poor credit, employment history, lack of down payment or income — most lenders will consider lending if there is someone to act as co-signor or guarantor for a mortgage. The two options provide different requirements. Co-signer or guarantor for a mortgage, which is best? People often […]
Get Pre-Qualified For A Mortgage
Buying a home is one of the biggest financial decisions you will make, especially if you are buying your first home. So it is important to know your current financial situation and ensure you buy a home you can afford while still enjoying your life. For that reason I always recommend all home buyers talk […]