Homes of Northumberland Hills

Mortgage Information

Mortgage Shopping Made Easy

Here are some basic steps you can take to ensure that you find a mortgage that works for you.

Canadian Home Sales

According to statistics1 released today by The Canadian Real Estate Association (CREA),

National resale housing activity improved in February 2012 after having declined in January.

Highlights:

• Home sales rose 1.4% from January to February.

• Actual (not seasonally adjusted) activity was up 8.6% from February 2011 levels.

• The number of newly listed homes climbed 1.9% from January to February.

• The national sales-to-new listings ratio was little changed, remaining firmly in balanced territory.

• The national average home price advanced 2.0% on a year-over-year basis in February.

Sales activity recorded through the MLS® Systems of Canadian real estate Boards and Associations edged up 1.4 per cent from January to February 2012, recouping one-third of the monthly decline in activity between December 2011 and January 2012.

New Mortgage Rules

The new measures:

Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.

Do the math

Now that you have an idea of how much you owe, gather up all of your information on your assets (your current home, investments, stocks, bonds, other properties) and add them up. Hint: it’s best when you own more than you owe. There are plenty of calculators online that will help you make sense of the numbers and give you a preliminary idea of the mortgage amount you qualify for.

How much home can I afford?

Land Transfer Taxes in Ontario

0.5% of the value of consideration for the transfer up to and including $55,000,
1 % of the value of the consideration which exceeds $55,000 up to and including $250,000, and
1.5% of the value of the consideration which exceeds $250,000, and
2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.

Prequalify

Meet with a bank or lender. They’ll ask you some questions that may point out some things you missed in your initial estimate, like liabilities – or assets you didn’t realize you had. Using all this information, they’ll give you a rough estimate of how much you can borrow. However, this informal process isn’t a guarantee or a pre-approval. It’s simply a way to help you gauge the properties you can afford and figure out if you’re ready to make this type of financial commitment.

Choose a lender

A mortgage is one of the biggest financial commitments you can make, so it pays to shop around. Even if you have an excellent relationship with your bank, there’s no harm in exploring the option of obtaining financing from another company.

Many homebuyers have found financing online, whether it’s through a mortgage finding service or a bricks-and-mortar institution. You don’t have to leave your home to do it, and you can shop 24/7. The downside of doing it online is that lacks a personal touch – you may miss out on an option that you might have come across by talking to someone in person.

If you’re pressed for time, a mortgage broker can do your “shopping around” for you, and find the best rate available. Before choosing a broker, make sure he or she isn’t affiliated with a specific bank or lending institution.

Get pre-approved

Getting mortgage pre-approval is similar to pre-qualifying, but the result is an approval from a lender for a specific amount, locked into an interest rate for a period of time (normally 90 to 120 days).

Trademarks owned or controlled by The Canadian Real Estate Association. Used under licence.

Ian Bowen

Sales Representative

Royal LePage ProAlliance Realty, Brokerage (Independently owned and operated)

1111 ELGIN STREET WEST, Cobourg, ON K9A5H7

Phone: 905.377.8888

Fax: 905.372.4978

ibowen@royallepage.ca

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