Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

Home Closing Costs

In the process of buying a house, it is important that a homeowner sets aside money for closing costs. Usually, these costs amount to about three percent of the total cost of the house. A home buyer should ask a mortgage broker to explain the closing costs likely to be encountered. Usually, the seller will provide information regarding these costs during the initial process of buying the house. However, the buyer should not hesitate to ask for clarification where he or she does not fully understand. The goal is to get a clear understanding of how the closing costs will affect the buyer’s budget so as to make necessary adjustments and avoid last minute inconveniences. Some of the closing costs that you can expect as a homebuyer include:

Legal fees

Legal fees will vary depending on various factors, but on average, they will cost about $700 to $1200. You should set apart about $200 to $400 for such disbursements as mortgage registration, the completion of a tax certificate, and the title search of the property you intend to acquire. The charges may also include postage, faxing and photocopying fees.

Property tax adjustment

Part of the process of closing will usually involve reimbursing previous owners for prepaid taxes, as they will have been paying property taxes to the city. Set aside some money to cover these costs.

Interest adjustment date

Your lender will set an interest adjustment date and probably require you to pay interest pending the arrival of the date. Set apart some money to settle these costs. Usually, the interest is a month’s interest at the rate of your mortgage.

To minimize the amount spent on closing costs, it is advisable to seek advice on rates in the market. Your bank or mortgage broker are two sources who can assist you with this. Seeking this information is beneficial as it could end up saving you a lot of money.

Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

Debt In the Event of Death

Once death strikes you, you will have no other option other than to leave behind your family, incurred debts and your legacy to the bereaved. Whatever happens to the debts once you’re no longer remains a question in the minds of many. In general, all your acquired assets and debts will be part of the estate whereby now the estate will take responsibility of paying them. The money that remains is channeled to your heirs. In the case there is not sufficient money to repay back debts, they will remain unpaid.

It tends to be somehow technical, but with some fix, the family members will be able to maneuver on such technicalities. Here are a few things that you need to have at the back of your mind:

SETTLING THE ESTATE

A will draft by the deceased typically mentions an executor, who will stand responsible for the settlement of his related financial affairs. In case there is no written will, then someone will need to apply to the relevant court to be appointed the Estate Trustee. There is a pecking order that should be paid first. It is stated that secured debts like auto loans or mortgage ought to be considered first, and thereafter to be followed by unsecured debts, such as credit medical bills and credit card.

HOME

Banks expect payments for a mortgage because they will take action by giving penalties. There is assured protections to family members or other individuals living within the home. Financial institutions are prohibited from automatically foreclosing whenever a home owner meet his/her untimely death.

AUTO

Similar protection is assured to automobiles that go unpaid in full amount. However, lenders are not allowed to take back a car as long as it is being paid for. Rules differ from one area to another in the way in which assets are protected and which are not. So it will be wise enough to consult a lawyer.

CREDIT CARDS

If you claim the credit card alone, then you should also be ready to claim the debt even in death. In that case, therefore, the estate will take care of it. If it is a joint account or there is a co-signer, there is the likelihood of the other party being held responsible for the balance as well. But if you’re just an authorized user, you’re likely not to pay.