Fixed rate mortgage

Fixed Rate Mortgage And Its Advantages

A Fixed rate mortgage depends on the interest rate, as the mortgage is one of the most popular and used guarantees among the creditor parties to ensure the return of the money that you lent to the debtor parties, which follow the banks and loan institutions.

 This method is to obtain assets or parts of them at the value of the amount borrowed by the owner of the property. If the debtor cannot pay the debts, the creditor seizes the property in whole or in part as compensation for the amount and interest that has not been paid.

Fixed Rate Mortgage

Fixed rate mortgage

The interest rate set when you apply for a mortgage can change when you submit the mortgage documents. To avoid any surprises, you can pay an amount to lock in the interest rate, which obliges the lender to provide the original rate of interest. This guarantee is provided only for fixed-interest loans. This is provided that the foreclosure transaction is completed within a specified period, usually between 30 and 60 days.

And the longer the interest rate stability period after 60 days, the more you owe, and there are different types of interest rate fixation with a percentage of the mortgage amount, one-time fixed fees, or simply adding an amount to the interest rate, you can fix the interest rate when you find a suitable interest rate, or when submitting a mortgage application, or at some point in the procedures, and to know the details about fixed mortgages, follow this article with us.

Fixing the interest rate on a fixed mortgage 

When setting the interest rate, any change in interest rates on mortgage loans is usually prevented. You can look for loans that follow a “lock-down” policy as your loan’s interest rate can go down if the market rate goes down.

However, if it rises, you will get the option of locking in the interest rate as a suitable solution
to avoid an unexpected increase in the interest rate that could affect your ability to obtain a mortgage.

What is the meaning of a mortgage?

A mortgage is a method of financing that is provided with the security of the property. A mortgage is also a “property mortgage” and “property claim.” Linguistically, foreclosure means foreclosure.

 Thus, a Mortgage is the foreclosure of the property due to the debt. In Sharia terms, the definition of a mortgage is to put a property of monetary value as security for the debt. In a simpler sense, if person X borrows from person Y and makes his property as security for the debt, then the property will be at the disposal of the credit party Y until The debt is paid off by debtor X.

Types of Mortgage

Two types of mortgages are considered the most widespread and used among people.
There are many forms that a mortgage can follow, but the famous types of mortgage are:

  • A fixed property can be insured for 30 years or a period of 15 years.
  • Short mortgage of up to five years.
  • A mortgage for 40 years or more.

And when we talk about the types of mortgage, we refer to the most famous and widespread patterns: the fixed-interest mortgage, and the adjustable-interest mortgage.

Fixed-rate Mortgage

It can be defined as a fixed mortgage that dealers can benefit from this type of real estate loan
with a fixed price throughout the repayment period, as the same amount that was determined from the beginning is paid without any changes.

 There is no change in the amount of the monthly installments paid, and the interest is added
to the mortgage payment from the beginning of the payment process until the end of the loan period.

Even if the market interest rate changes and rises, the borrower is still obligated to pay the same rate,
but if the interest rate drops significantly.

 The borrower has the opportunity to secure a lower rate by refinancing the mortgage,
and this mortgage is referred to as a “conventional mortgage” or fixed mortgage.

Variable Interest Mortgage

Fixed rate mortgage

Adjustable rate mortgage is classified among the types of mortgage,
where the interest rate is calculated for a specific period and then changes according to the market interest rates, in most cases, the starting interest rate is lower than the market rate,
which makes the adjustable rate mortgage an idea Good for short-term mortgages.

However, it may be more costly in the long run if the market interest rate decreases from the initial rate after the specified period. In the event of high-interest rates, it may be difficult for the borrower to bear the high monthly payments. In all cases, the amount of monthly payments cannot be predicted. after the initial period.

Less common types of mortgage

Interest-only mortgages are one of the complex forms of mortgage in the repayment process, however, advanced debtors can take advantage of them in the best way, and mortgages during the housing bubble period caused many problems for homeowners at the beginning of the twentieth century and specifically during the first decade.

There is a form of mortgage called reverse mortgage, which is intended for elderly homeowners over the age of 62, and is suitable for the category that wants to convert part of the value of their homes into cash, where they borrow the value of their homes and obtain money through lines of credit, monthly payments or A lump sum, and in the event of the death of the borrower or the sale of the mortgaged home, the outstanding balance shall be paid in full.

Fixed mortgage terms

The borrower must meet the requirements of the mortgage
to obtain the necessary funds for it. The following is a list of the conditions of the mortgage:

  1. The financial obligations of the debtor or mortgagor include paying his financial payments on the specified dates agreed upon with the mortgaging creditor, in addition to paying the amounts due on interest.
  2. The creditor has the right to take the title of the property out of the mortgage
    if the debtor fails to pay on time, despite receiving a notice to pay.
  3. When the debtor’s financial condition can pay the agreed financial percentage in one payment, the other party is required to agree to the financial value after reaching an agreement in the contract.
  4. The contract must include a clause that transfers all responsibility
    to the heirs in the event of the death of one of the parties.
  5. The contract should include explicit information detailing the terms of the offer
    and acceptance that must be applied between the parties.
  6. It is prohibited to sign the contract except between two mature persons,
    both of whom exceed the legal age.
  7. The property being mortgaged must be available and owned by the mortgagor at the time of the mortgage and should not be prepared for the promise, in addition to the need to know the specific value of the mortgage.

Read more: Reverse mortgage calculator and the benefit of using it

Mortgage Features

Fixed rate mortgage

Among the advantages of a mortgage are the following:

  1. Not losing betting mortgaged real estate forever.
  2. Ownership of the property remains in the hands of the current owner
    until the debt is repaid to the borrower.
  3. The mortgage agreement between the mortgagor
  4. and the mortgagor must be written down in the judicial institutions to protect the right of the mortgagor.
  5. It defines the freedom of the current person to arrange the mortgage
    so that he can pay the financial debts owed by him to the creditor.
  6. When the mortgagor fails to pay the money owed to him,
    the borrower is guaranteed the right to dispose of the mortgage by coercive judicial supervision.
  7. Even though the price of the property has gone up, the interest rate agreed upon in the mortgage contract does not go up.

At the end of the article, we have mentioned to you everything related to the fixed mortgage,
which is determined according to the interest rate, and its most important advantages.

Types of mortgages

Types Of Mortgages And The Most Important Banks That Offer Them

Types Of Mortgages are what many people search for in Canada. When it comes to buying a home, Canadians have many important decisions.

This includes choosing the type of house and finding the ideal neighborhood that they want, in addition to financing the purchase, which is one of the most important and also the longest-term decisions.

Through this article, we will learn about the types of real estate mortgages, as many Canadian banks provide many real estate loans.

We will also explain how to apply for these mortgages and also how they differ in terms of interest rate and volume.

Types of Mortgages

Types of mortgages
Types of mortgages

There are two types of mortgages, which are the most popular among people, but in fact, there are many types of mortgages, but we will talk about the most important types of these mortgages, which are as follows:

  • A mortgage that is fixed for a period of up to 30 years, or another mortgage that is fixed for about a year.
  • In addition, there is a mortgage that is short and its term can be about years.
  • There is also a mortgage that has a term of about 40 years or more.

Note 

It is possible to reduce the value of the monthly payment through the extension of the payments, which are over longer years, but this matter may lead to an increase in the value of the interest, which must be paid.

And by returning to the most important types of mortgages, they are of two types,
which are the most common and well-known, and are first, the mortgage that has a fixed rate,
and secondly, the mortgage that has an adjustable rate.

Fixed-rate mortgage 

It is considered one of the types of mortgages in which the lender works to pay the same interest rate over a long period, i.e. the length of the loan repayment period, otherwise, it is necessary to work to change the value of the main monthly amount paid, which is added to the interest with doing By paying the value of the mortgage from the beginning of the payment process until its end.

Even if the interest rate changes within the markets and becomes high, the lender will continue
to pay the same price, but if there has been a significant decrease in the interest rate significantly.

This lender has a high chance of being able to secure this rate through refinancing your mortgage,
and a fixed-rate mortgage is also referred to as a conventional mortgage.

A mortgage with an adjustable rate

Work is being done to classify the mortgage that has a price in exchange for working on modifying the types of mortgages. Within this type, work is being done to determine the price of the primary interest, which is the lowest price in the market, which makes this mortgage a wonderful and glorious idea for a mortgage that is of short duration.

However, it can be less costly in the long term, if the interest rate within the market may decrease, from that initial price, after a specified period for that.

In the event that interest rates have increased, the lender may not be able to own these high payments. In all cases, we cannot predict all monthly payments after the initial period.

What is a mortgage 

Types of mortgages
Types of mortgages

When you work to buy a home in Canada, the first thing you do is to obtain a mortgage and to obtain the type of mortgage, you must be aware that there are some obstacles and steps that must be overcome, but once you are Knowing all that you expect your process will become much easier.

A mortgage is financing, and that is by guaranteeing the property, and it is also considered a privilege in exchange for the property, as well as claims on the property, and the mortgage is a matter of seizing the thing with debt, as it is about putting a property that has a financial value on the debt.

The best banks that offer types of mortgages

There are many banks that we may choose for you with great care in order
to help you obtain a dream home, and the most important of these banks are the following:

  • CIBC4

CIBC Bank is considered the main party working in the Canadian banking industry,
as it provides a range of various services and many mortgage products,
and it also provides types of mortgages, including those with a fixed interest rate.

 They also have adjustable mortgages with the lowest competitive interest rates,
and they also have a lot of other loan options, including a home energy plan,
which allows all lenders access to all the money to pay off high-interest debt.

  • BMO Bank of Montreal

Bank of Montreal works to offer a range of mortgage types that are for both commercial
and residential properties, and they also have many products that are for all first-time buyers.

In addition to many options for all those who wish to look to refinance their existing mortgage,
there is also a Home Owner’s Mortgage Profile.

Which can allow you to borrow up to about 80% of the value of the house,
which is divided between a line of credit or a mortgage.

  • TD Bank

TD Bank is considered one of the most important banks that exist in Canada and has a great reputation for it, and it also has a very wide range of products that are specific to mortgages, which include real estate that is fixed although it can reach about 10 years, as well as loans that have variable interest rates, in addition to loans that have variable interest rates.

Many of the programs are for first-time buyers of all self-employed borrowers,
and they also have an online application process, which makes this easy at first. 

Read more: Reverse mortgage calculator and the benefit of using it

  • HSBC Bank Canada

Types of mortgages
Types of mortgages

This bank works to provide many competitive rates on all types of mortgages,
which are fixed-rate, as well as many adjustable mortgage plans,
in addition to many other loan products, including mortgages.

At the end of this article, we have talked about the types of mortgages,
and the most important banks that work to provide them in Canada.

Ottawa Housing Market Trends: For Buyers and Sellers Capital Mortgages

Ottawa Housing Market Trends

Ottawa Housing Market Trends: For Buyers and Sellers

The Ottawa real estate market is in a constant state of change and is always adapting to new market factors. For buyers and sellers, this can make navigating the housing market more challenging than usual. This blog post will address some of the unique challenges in the Ottawa housing market, and how you can overcome them. Let’s dive in!

Changes in the Ottawa Real Estate Market

By almost every metric, the Ottawa real estate market is on a hot streak. If you’re in the market to buy, or if you’re a homeowner looking to sell, you’re in luck. There are a few reasons why the Ottawa housing market is excelling.

The First Time Buyer Tax Credit is Running Out – Time is running out for First Time Buyers to claim the $5,000 First Time Buyer Tax Credit. In Ottawa, this tax credit has led to a surge of First Time Buyer activity, pushing prices up and inventory down. It’s likely that many FHBs will want to get into the market before the end of 2022, so it may be a good time to take action.

Low Interest Rates – Interest rates have been at record lows for almost a decade, making home ownership much more affordable. This has led to a rush of first time buyers into the market, as well as people buying their next home, rather than staying put. This has pushed the Ottawa housing market beyond the point of balanced demand and supply, and into an environment of high demand and low supply.

Immigration and New Job Creation – Canada is seeing record numbers of new immigrants annually. In fact, in 2018, Ottawa saw a record number of newcomers, with nearly 45,000 new residents settling in the capital city. As newcomers are often looking for housing, this has led to higher demand in the Ottawa real estate market. New job creation, particularly in the tech sector, has also contributed to higher demand for housing.

High Demand and Low Supply

The Ottawa real estate market is showing signs of overheating. This is evidenced by a high demand for homes, and low supply of homes on the market. This is a trend that will likely continue throughout the rest of 2022, and into 2023. As the First Time Buyer Tax Credit is may eventually end, it’s likely that demand for housing will drop off, and supply will increase. It’s a good idea to keep an eye on the market, and be prepared to take action based on market conditions.

Finding Your Perfect Match

Finding a home that meets your needs is a challenge in any market. However, in a competitive market like Ottawa, it can be much more difficult. For example, let’s say you’re looking to buy a house in Ottawa. The average price for a house in Ottawa is currently just over $420,000. If you’re a First Time Buyer, your budget is likely less than this.

This means you’ll be looking at less expensive neighbourhoods, where there is less demand. This can make it difficult to find a home that meets your needs. It’s a good idea to be flexible when looking for a home. This will help you find a home that meets your needs, while also being in a neighbourhood that has less demand.

The Competition Is Heating Up

When you’re buying a home, or selling a home, it’s always important to have a competitive edge. That’s even more true in a high demand market like Ottawa. For example, if you’re buying a home in Ottawa, you’ll want to make sure you have a strong offer. The higher your offer, the more likely it is to be accepted. You’ll also want to make sure that your financing is in order. Some buyers try to secure financing after they’ve entered into a purchase contract, which leads to a drawn out and stressful process. Let Capital Mortgages help you with a pre-approved mortgage before you start your Ottawa search.

Conclusion

We’ve explored what is happening in the Ottawa real estate market, how these changes impact buyers and sellers, and what you can do to navigate these changes successfully. There are a few key points to keep in mind throughout this process. First, it’s important to understand the current state of the market. This will help you adapt your strategy and navigate the market successfully. Next, make sure to have a realistic view of the market. You’ll want to know what you can afford, and what properties are currently selling for. Last but not least, don’t get discouraged. The Ottawa real estate market can be challenging, but with the right strategy, it can be fun and rewarding.

We here at Capital Mortgages in Ottawa look forward to assisting you with all your Ottawa mortgage refinancing needs. Contact us today by calling us at: 613-228-3888 or email us direct at: info@capitalmortgages.com

You can use these links to APPLY NOW or CONTACT US.

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The Difference Between Fixed and Variable Mortgage Rates

 

Do you know the difference between fixed-rate mortgages or variable (sometimes called adjustable-rate) mortgages? Each mortgage type is affected by different market conditions and each offers its own advantages or disadvantages.  One of the most important steps in financing your home is choosing which type of mortgage suits your individual situation best.

 

Fixed-Rate Mortgages

In Canada most mortgages are 5-year “fixed-rate” terms.  A fixed-rate mortgage has an interest rate that is “fixed” for the term of your mortgage.  It does not change. As a result, the mortgage payment will not vary and the amount of principle and interest paid is completely predictable.

The largest advantage of a fixed-rate mortgage is the protection from rising interest rates (since your rate is “fixed”). At the end of the term you would renew your mortgage at the rates that are in place at that time.  Like most homeowners, if you need to keep your payment within a budget this is the choice for you.

The potential drawback of a fixed-rate mortgage is that if interest rates decline you cannot easily take advantage of that.  It is also potentially more expensive to break this mortgage before your term matures.

 

Variable / Adjustable-Rate Mortgages

A variable or adjustable-rate mortgage is exactly what it says.  The interest will change (increase or decrease) based on market conditions.  Specifically, on what the Bank of Canada does with the Prime Lending Rate.  If they increase it your rate (and mortgage payment) will increase at the same time.  The same with a decrease.  Your mortgage payment in most cases does not remain the same.  The Bank of Canada meets eight times a year to determine this rate.

One of the biggest advantages to a variable rate mortgage is the potential interest cost savings.  Your interest rate is set based on a discount from the Banks Prime rate.  Today, the prime rate is 3.45%.  The average discount below that is .80% for a rate of 2.65%.  This is lower than fixed rates.  Because of the lower rate, your mortgage payment may be smaller.

However, the drawback of a variable rate mortgage is that if rates rise so does your payment and interest cost.  It is not predictable like a fixed rate mortgage is.  If you have a fixed budget, this may not be the product for you.

 

Your choice will depend on your own personal finances, current interest rates and market trends. If you need assistance in choosing which mortgage is right for you, please don’t hesitate to contact Capital Mortgages today.

 

Capital Mortgages specializes as a service-oriented brokerage that prides itself on integrity and maintaining a service level second to none in the industry.

Refinancing Your Mortgage – What You Need To Know

There are a number of reasons why you might consider refinancing your property. One of these could be to capitalize on the equity you’ve built up in your home. For example, using the equity in your home can be a lower cost way of accessing funds than taking out a traditional loan. To learn more about whether refinancing could benefit you, we’ve gathered together some important information on the ways in which a refinance can be used:

 

Take advantage of low interest rates

Over the years interest rates can fluctuate and, since the time you took out your original mortgage, the interest may have moved. Through refinancing, you are able to take advantage of these new, potentially lower, rates and lower your payments.

 

Consolidate debt

If you are burdened by large monthly payments on multiple high interest credit card debt, you can refinance your mortgage to consolidate your debt into your mortgage at a lower interest rate, thus allowing you to save money and increase your cash flow.

 

Combine multiple mortgages into one

Paying various installments for multiple mortgages can be stressful. With refinancing, you are able to consolidate these mortgages into one with a fixed interest rate and possibly a longer repayment duration.

 

Access the equity in your home

An added bonus of home ownership is that you have access to financing at more competitive rates than unsecured loans or lines of credit. You can use the equity in your home to pay off debts, free up an amount of cash to do some home renovations, buy an additional property, invest in stocks, or for university tuitions. Since a mortgage is a secured loan, the interest applied is considerably lower than that of an unsecured loan.

 

If you would like to learn more about mortgage refinancing, please give the team at Capital Mortgages a call today. By carefully studying the status of your current mortgage and comparing it to your income and other debts, we can help you pick the refinance solution that best suits your current financial status.

Buying a New Home: Capital Mortgages Ottawa

Realtor’s Top 10 Tips for Impressing Potential Buyers

When re-selling your house, it’s wise to make it appealing enough so that potential buyers not only get impressed, but also feel a connection with the home hence prompting them to buy. These top 10 tips as recommended by real estate agents that are guaranteed to impress potential buyers.

Removing your personal photos

Photos are generally known to cause a lot of distraction to clients for they may end up focusing more on the photos thus missing out on the home’s key selling points. By removing them, buyers are more likely to pay attention to the home’s key features.

Accentuate the home’s best features

There’s always that one selling point that makes a client want to buy a home. It may be as simple as a nice view, spiral staircase or floating shelves, among others. The key is to accentuate this/these areas so as to give an irresistible wow effect.

Embrace Serenity

The last thing that you want in trying to impress potential buyers is distraction. Peace and quiet is hence the solution. To achieve this, you need to ensure that there’s minimal noise within and around the house. TVs as well as radios should be turned off. And just in case you feel the need to play music, opt for low volume soft jazz rather than other types of loud music.

Give the Walls a Fresh Coat of Paint

No one is going to be impressed by old, chipped or faded paint, as it makes the house look dull, old and dirty. Therefore, invest in a coat or two of new paint. Neutral colors are ideal for relaxing and resting areas while satin is ideal for other common areas, like the kitchen, as it’s also easier to clean.

Get rid of all your stuff

People are known to perceive things differently. This is why it’s important that before a showing, you get rid of any objects or designs that can turn off a prospective buyer just because they perceived it/them as being annoying, irritating or offensive. Examples of this include artwork or collectibles.

Clean up

Clutter can easily mess up a sale. The key is to declutter the house by packing all the extra stuff. By so doing, the house will look both clean and spacious which is something that most home buyers look for.

Pet proofing the Pad

A house with pets is likely to have a distinct smell that the homeowner might not smell, but a client will. When making a listing and preparing your home for a viewing, ensure that you clean after your pets and ask an outsider to give your home a sniff test. You may also try using a few air purifiers.

Make your House Smell like Home

There’s a huge difference between a house and a home. Buyers prefer homes to houses. To create this kind of an atmosphere, you can try using air fresheners whose aroma create a homey feeling, like fresh scents in the laundry room and vanilla or cinnamon in the kitchen.

Flaunt the home’s assets

If there are some items that will be remaining in the house, place high quality printed cards on these items as they help in bringing focus to not just the house but also to these other features. Examples of these items include high-end and built in appliances. However, desist from over-using the cards. A maximum of 10 cards is enough.

Give the Buyer some Space

Buyers never want to discuss the specifics of the home with the seller around. If you believe in your house, you should let it sell itself. The best thing to do is, take some time away from the house, even if it’s to the yard or porch, and give the buyer the space they need to view the house by themselves. By so doing, they may end up staying longer and possibly, falling in love with the house.

At Capital Mortgages in Ottawa we strive to be your personal mortgage broker for life.

Vast majority now favour fixed-rate mortgages

While it looks like interest rates will remain low for some time, there has been a large swing from variable to fixed-rate mortgages over the past year, says a new report by the Canadian Association of Accredited Mortgage Professionals.

CAAMP’s annual report on the state of the residential mortgage market, released Monday, suggests that 79 per cent of the new mortgages taken out this year have been fixed-rate, 10 per cent have been variable, and 11 per cent are a combination.

That’s a significant shift from prior years, during which fixed-rate mortgages generally accounted for about two-thirds of the total, while variable or adjustable-rate mortgages were about one-quarter.

Canadians are likely locking in because of the very small difference between interest rates for variable-rate mortgages (which are in the neighbourhood of three per cent) and five-year fixed-rate mortgages (which are closer to 3.2 or 3.3 per cent, after discounts that the banks typically offer), the report says.

“The current spread of about one-quarter of a point is negligible compared to the average of 1.7 points during 2010 and 2011,” it says.

Meanwhile, the average mortgage interest rate for homeowners has fallen to 3.55 per cent, from 3.94 per cent a year ago. For homes bought this year, the average rate is 3.26 per cent.

The report, which is based in large part on an online survey of 2,018 Canadians by Maritz, also found that about six per cent of homeowners took equity out of their home in the past year. The average amount is estimated at $49,000, implying that $30-billion of equity has been taken out during the year.

But 87 per cent of Canadians have at least 25 per cent equity in their homes. Sixteen per cent of mortgage holders have increased their payments, 15 per cent have made lump sum payments, and 6 per cent have increased their payment frequency.