Mortgage Preapproval

Mortgage Preapproval And Reasons For Needing Such Approval

Mortgage pre-approval is the first step in getting a dream home, even if that is getting pre-approved from a mortgage lender.

This is to obtain a loan with a written agreement in principle for your financing, showing pre-approval to all of these sellers that you are serious about buying a home.

In addition, it provides many important information about the amount of money that you can borrow, which helps you in the process of estimating all the payments for the monthly mortgage process.

It then provides an approximate sense of how much you can work towards affording for a home, and a mortgage pre-approval is a confirmation process from the lender.

Mortgage Preapproval

Mortgage Preapproval
Mortgage Preapproval

As a mortgage pre-approval is a confirmation process from the lender itself
and indicates that you are eligible to obtain a mortgage, you can also obtain a pre-approval process through more than one lender.

This process includes submitting a basic application with more details
about your financial situation in terms of assets and income as well as debts.

The lender uses this information to write a document indicating whether you have been pre-approved for a loan, and if so, what amount you can borrow from.

  In addition, this approval is not guaranteed in advance of your loan process,
since if you apply for a formal application or a loan of a certain size,
when you submit your final mortgage application, in this case, your lender will take a deep look at your credit history you and your money.

Reasons for Needing a Mortgage Preapproval

The process of getting pre-approved for a mortgage is a good first step as you begin seriously with the home-buying process.

Where it allows you to know whether you are a qualified person to obtain a loan in a real estate way,
and then the extent of the bank’s willingness to lend this money,
and from the pre-approval of the following mortgage:

Set realistic expectations

Many people may overestimate the amount they can afford, as they assume they have good enough credit to qualify for the low price advertised in private rates.

With a mortgage, they also use their annual salary instead of their monthly salary to calculate these costs.

Troubleshooting

Where most of Canada’s residents enjoy a direct financial situation,
as they work in many jobs that are full-time and then they receive a salary annually,
those who do not fit this mold can have difficulty in the process of obtaining a mortgage loan.

Other reasons for needing a Mortgage Preapproval

As there are many reasons for the process of needing approval for a mortgage,
which is considered a pre-approval for a mortgage,
the most prominent of which are the following:

Work to fix any problems

Getting pre-approved early also gives you a chance to fix any mistakes you might have, for example, if you have a low credit score,
you may be able to work hard to get it to the next level before you get credit.
You need your mortgage in a mortgage pre-approval.

Work to secure current prices

Since the federal government is planning to increase many rates for the mortgage process and that was in Canada in 2018,
this may mean waiting for the application process for a mortgage loan you are stuck with higher rates.

This is when you apply for pre-approval, it locks in all existing mortgage rates for a certain period,
so if rates go up, you will still be eligible for the rates you set.

The most important things to bring to the mortgage pre-approval meeting

Where many things must be brought to the meeting of the mortgage pre-approval process and those the mortgage pre-approval,
the most prominent of which are the following:

Application form

As you will need to fill out an application to obtain a pre-approval for everything that includes a mortgage loan, in most cases,
you may be able to do this through the Internet in advance,
or you may be able to obtain a paper form and fill it out also.

ID

As the bank will need to know your identification,
so be sure to bring a form of this identification process,
and then also bring your driver’s license or passport as that should suffice.

So even though all of these other forms of identification may be acceptable,
then that bank may need to make a copy of that ID or they may visually confirm that it’s you who says Mortgage Pre-Approval.

Other things to work on to bring to the mortgage pre-approval meeting

Mortgage Preapproval
Mortgage Preapproval

As many things need to be brought to this meeting in order
to ensure prior approval of the mortgage, the most prominent of which are the following:

Proof of assets

Since qualifying for a mortgage is not only about being able to make the monthly payment, you also need to be very capable in the process of making a file in the form of a down payment.

And then work to pay all the closing costs,
as the bank may want to work to see evidence that you will be able to do this,
as you will need a bank statement.

Read more: The Future of Mortgage Lending: Exploring Blockchain Technology

List of debt obligations

Where this list works that you will also enter your debts into that equation when this lender determines the amount of this money that he lends to you,
so he may need to know the form of all your financial obligations to make those calculations,
and then it will be better to consult one Mortgage approval professional.

At the end of the article, we talked about the pre-approval of the mortgage,
in addition to the most important and prominent reasons for needing the approval of this mortgage,
in addition to the things that must be brought to the meeting.

The Debate: Suburbs Vs. City

The Debate: Live in the Suburbs or Live in the City?

When it comes to the suburbs vs. city debate, the two are like night and day. The suburbs are typically quiet with wide streets and plenty of green space, while the city is busy with lots of restaurants, shops, and action. Which one is better? Depending on your lifestyle and personal preferences, you might prefer one over another. Each individual has their own reasons for wanting to live in a specific area, but it’s important to consider which will suit your needs and wants long term before making a final decision on where you’ll be calling home. Read on to learn more about both options so you can determine which will suit you best as a resident.

What is the Suburbs?

The suburbs are residential areas outside the city, typically with homes on large lots of land. Typically, the price of living in the suburbs is less than living in the city, with larger homes and lots of green space. The population in the suburbs is typically more diverse than in the city, with a mixture of different cultures and lifestyles all meshing together. The city and suburbs have a lot in common, but there are also a lot of subtle differences. For example, while both areas might have a mix of residential and commercial buildings, the city tends to have much taller buildings than the suburbs. The city also tends to have far more people living in it than the suburbs do. Although suburban dwellers can certainly walk to a nearby store or coffee shop, it’s not the same as being able to walk to a subway station or bus stop.

What is the City?

The city is typically where you’ll find skyscrapers and a bustling lifestyle. If you live in the city, you’ll find yourself surrounded by a wide range of cultures, making for a unique and entertaining lifestyle. It also typically costs more to live in a city, as rent and other properties are often more expensive than in the suburbs. Living in the city offers plenty of hustle and bustle, as well as a variety of cultural and entertainment choices. If you work in the city, you’ll likely love the convenience of the quick commute, even if the city suffers from traffic. If you have kids, you may consider the city’s smaller living spaces an advantage, as they will likely have more room to play and grow. Or if you’re an introvert or like to spend time alone, though, the noise and busyness of the city might get to you.

Pros of Living in the Suburbs

– Low cost of living: The suburbs typically have cheaper rent and a lower cost of living than the city. If you’re looking to save money, you may want to consider the suburbs for their lower cost of living.

– Lots of green space: If you enjoy the outdoors and like having a garden, the suburbs may be your ideal place to live. There’s plenty of space for a backyard or patio, with plenty of parks and green spaces to enjoy in the suburbs as well.

– Quieter lifestyle: The suburbs typically have a quieter lifestyle than the city, making them a great place to rest and relax. You may not always find this type of quiet in the city, depending on where you live.

– Family-friendly lifestyle: If you have kids, you may want to consider the suburbs for their family-friendly lifestyle. There are typically larger lots in the suburbs, making room for kids to play and explore. Many suburbs also have good schools nearby for growing kids.

Pros of Living in the City

– Quick commute: If you work in the city, you’ll likely love the ease of a quick commute. You’ll also likely find public transportation more convenient in the city than the suburbs.

– More cultural and entertainment options: You’ll have plenty of options when it comes to culture and entertainment in the city. You’ll find plenty of museums and shows, as well as lots of restaurants with a variety of cuisine.

– Walkability: If you like to get outside and walk, you’ll likely love the walkability of the city. You’ll be able to walk to nearby shops, restaurants, and even work – making your daily routine much easier and less stressful.

– Smaller living spaces: If you have kids, you may consider the city’s smaller living spaces an advantage. You’ll be able to get more done and have more room for your growing family.

Cons of Living in the Suburbs

– Longer commute: If you work in the city, you may not be able to walk to work from the suburbs. Depending on your job, you may need to drive or even take public transportation. Longer commutes can be stressful and tiring. They can also be more expensive, especially if you have to drive.

– Larger lots: If you enjoy having room for outdoor activities, a larger lot in the suburbs may be ideal for you. However, if you prefer to live in an area with smaller lots, you may want to consider another area.

– Less cultural diversity: If you like to learn about other cultures and meet people from around the world, the suburbs may have less cultural diversity than the city. You may feel like you fit in less and have fewer people to engage with.

Cons of Living in the City

– Higher cost of living: The city typically has a higher cost of living than the suburbs. If you’re looking to save money, you may want to consider the suburbs for their lower cost of living.

– Busier lifestyle: If you enjoy a quieter lifestyle, the city may not be for you. You’ll likely experience more noise and busyness in the city than in the suburbs.

– Smaller living spaces: If you have kids, you may consider the city’s smaller living spaces an advantage, but you may also want to consider how to give them more room to grow and play.

– Less green space: If you like the outdoors, you may find less green space in the city. You’ll likely have smaller yards and less space for growing flowers and vegetables.

Conclusion

When it comes to the suburbs vs. city debate, the two are like night and day. The suburbs are typically quiet with wide streets and plenty of green space, while the city is busy with lots of restaurants, shops, and action. Which one is better? Depending on your lifestyle and personal preferences, you might prefer one over another. Each individual has their own reasons for wanting to live in a specific area, but it’s important to consider which will suit your needs and wants long term before making a final decision on where you’ll be calling home.

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

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Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

The Benefit of Rate Holds

The term “rate hold” may be something you are familiar with if you have worked with us in the past. If not, it is a term that all prospective buyers should know!
 
A rate hold is offered by the majority of lenders to clients who are purchasing a new home and need a mortgage. The purpose of the rate hold is to secure the interest rate on your mortgage application for a certain time period. Often, these holds range from 90-120 days. Bear in mind, these are typically not provided for anyone refinancing their mortgage or looking to transfer it from one lender to another. Only those looking to purchase a home or establish a brand-new mortgage.
 
Once you have created an application with us, We can submit it to an available lender who is offering a rate hold on an interest rate you want to take advantage of – all without a property attached.
 
For an example of how a rate hold works, consider this. On day one you submit your application to a lender for a fixed interest rate of 2.64% for five-years. On day 60, that interest rate moves to 3.12%. As long as your mortgage closes in the next 60 days, you are protected and can keep your lower rate of 2.64%. Plus, if rates happen to trend downward, you can also take advantage of the lower interest rate.
 
This rate hold does not commit you to working with that particular lending institution, nor does it commit you to working with us. It also does not hurt your chances of receiving an approval down the road! All it does is protect the agreed upon interest rate for you while you shop the market, so you don’t have to worry about it increasing while you are hunting for your perfect home!
 
Once the 120 days expires, if you have not found that perfect home fit or want to take advantage of different interest rates, there is nothing stopping you from submitting another rate hold! It will just be subject to the current rates on the day of submission.
 
If you are looking to purchase a new or secondary home this summer, please don’t hesitate to reach out to Capital Mortgages to get started on the pre-approval process and put your rate hold in place!

 

Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

Besides My Mortgage, What Other Costs Are Involved In Buying A House?

Congratulations! You’ve found your dream home, have been pre-approved for your mortgage and have all the funds ready for your down payment. Buying a house is a moment many people dream of, and it is one of the most important milestones in many of our lives. 

Not to be the bearer of sobering news, but there are quite a few other costs to consider before you collect your mortgage funds and get the keys to your new abode. Arming yourself with the facts and being prepared for the entire process are what will make it go smoothly, so here are some other costs you should anticipate:

A home inspection (optional)

Before purchasing your new home, you’ll want to make sure it’s in good condition. This cost is optional, but one that we recommend to many of our clients.

Property appraisal

Your lender may request an appraisal to get an idea of the property’s value for financing purposes.

Property survey

This looks at your property’s boundaries, potential setbacks and restrictions that can impact its value. The seller may have one they can give you, or you can hire a land surveyor to provide it.

Title insurance

Your lender may require you to provide this, which protects you from title fraud, municipal work orders, zoning violations and other property defects. This is usually included in the legal bill from your lawyer.

Property insurance

This one is a given! This type of insurance protects you from fire and other damaging disasters.

Mortgage life, critical illness, disability, or job less insurance (optional)

There are all sorts of unforeseen circumstances that could affect your ability to pay your mortgage. This is an optional decision that would protect you and your family’s financial future.

Land transfer tax

This tax is based on your home’s purchase price and other factors. Most provinces charge this, and some cities charge their own municipal land transfer tax.

GST or HST

New homes may be subject to GST or HST.

Property taxes, utilities, condo fees

The seller may have pre-paid these before you take ownership. You would reimburse them for a portion of the costs from your closing date. 

Mortgage default insurance

Mortgage default insurance is required if your down payment is less than 20%.

Legal fees 

Your lawyer’s legal fees and any other expenses your lawyer had to pay on your behalf are part of your closing costs.

Questions about the specifics of any of these costs? Don’t hesitate to give us a call at 613-228-3888 today!

 

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Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

5 Tips for Selling Your Home During the Pandemic

Due to the unprecedented amount of time people are now spending in their homes, the demand for larger homes has increased. People are selling their previous dream homes for new ones that can accommodate everything from online learning to at-home workouts to working from home. This has led to a unique situation where folks are putting their homes up for sale and buying new ones despite the global pandemic. If you are one of these people, read this blog for some important tips for selling your home during the pandemic.

1. Don’t undervalue your home:

While you may feel like you need to make changes rapidly, do not make an emotional decision and put your home up for sale at a low price out of fear. According to studies, there continues to be low inventory on the market and therefore prices are remaining in tact. Moreover, low interest rates are enabling buyers to spend more than they may have a year ago.

2. Sell safely:

While many open houses have gone completely virtual, if you are planning on having an in-person open house, be sure to wear a mask, have gloves and sanitizer on hand, and deep clean your home before and after potential buyers come through. Be ready for virtual appraisals, inspections and bidding wars too!

3. Boost your curb appeal:

Due to the limiting of open house and in-person home visits, potential buyers are more likely to look at the front of your home again and again. From front yard gardening to decorating to a fresh coat of paint, try to improve your curb appeal for all those drive-by potential buyers. 

4. Be Patient:

The virus has changed the way the world works, and you cannot rush the process right now. This may result in a lot of last minute cancellations due to illness or delayed closings due to inspection or appraisal bookings.

5. Go for it:

It is still a great time to list your home, especially considering how many other people are aching for a new space, different space or more space in their own home in order to manage this new at-home focussed life. If you want to sell, go for it!

Are you planning on selling your home during the pandemic, and are looking for a team that you can trust to help you secure a new mortgage loan for a new home, contact us at Capital Mortgages today.  

Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

Tips To Overcome Housing Affordability Challenges As A First Time Buyer

Most Canadians spend over half of their monthly income on mortgage payments, which is far greater than the 30% figure that’s recommended to be financially sound. There are no two ways around it – buying a home is expensive, and saving up for a down payment is one of the greatest monetary challenges that many Canadians face. With the average price of a house sitting at $500,000 in Ottawa, it goes without saying that affording a property in our city can be tricky, even for those who are earning healthy salaries. This can be even more difficult as somebody purchasing a home for the first time.

To help ease the pressure, we have compiled a few tips to make housing affordability more accessible to you.

  1. If you have not purchased a home within the past four years, you may be eligible to qualify for the RRSP Home Buyer’s Plan. This allows us to borrow up to $25,000 tax-free from your RRSP to put towards a down payment. The money must be in your RRSP 90 days before your purchase.
  2. On September 2nd 2019, the federal government launched a national First-Time Home Buyer Incentive which offers eligible buyers up to 10% of a home’s purchase price to put towards their down payment. Note that this money is a form of a loan from the government, which will eventually need to be paid back.
  3. In certain Canadian provinces (including Ontario), you can receive a rebate on the land transfer tax you pay, which is generally between 0.5% and 2% of your property’s total purchase price and is one of the highest taxes you’ll pay.
  4. The First Time Home Buyer’s Tax Credit, introduced in the 2009 federal budget, allows first-time buyers to receive a non-refundable credit of up to $750 to offset legal fees, inspections and other closing costs. 
  5. If your home is less than $500,000, you will only be required to put down 5% as a down payment. However, note that any down payment under 20% of your home’s total price will require you to pay mortgage default insurance.

 

Hoping to discuss what kind of property you can afford with one of our mortgage specialists? Give us a call at 613-228-3888 today.

Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

What To Know About Re-Financing Your Mortgage Throughout COVID-19

What To Know About Re-Financing Your Mortgage Throughout COVID-19

The ongoing pandemic has thrown all of us for a loop, with many people either being temporarily laid off, having their salaries cut or being let go altogether. It’s a scary and unprecedented time that is leading a large percentage of Canadians to consider whether they should refinance their mortgages. Doing so will allow them to give themselves a safety net by potentially resetting their rate to be lower, reducing their payments or pulling out equity from their homes in the event of job loss.

Here are a few factors you should keep in mind when planning to refinance your mortgage:

  1. Refinances are not urgent for lenders – Your refinance request will be a third priority (or lower) for lenders after new purchase and lender switches. Coupled with the high demand for refinancing right now, keep in mind that it might take a lender longer to reply on your application.
  2. You may be required to pay a penalty – You’ll have to pay a penalty if you break an existing closed mortgage to refinance. These fees can range from $1,000 to several thousand dollars – check your mortgage contract to determine how your lender will calculate your penalty. Here is a helpful list of penalty calculators by major lenders. 
  3. Employer verification will be strict – Given the situation we’re currently living through, your lender might make you prove that you will not be laid off during the economic shutdown if you don’t work a job that has been deemed to be essential
  4. Fluctuating ratesKeep in mind that mortgage rates are fluctuating often right now, even though the Bank of Canada slashed its overnight rate in March. Make sure you’re not overpaying for a fixed or variable mortgage and consider a cheap shorter term if you’re able to find one. Rates will likely return to normal once we’re through the worst of the pandemic.
  5. Opt for a home equity line of credit – A HELOC is a great alternative to using credit cards for a source of emergency liquidity. Payments are usually interest-only and you can generally borrow at your lender’s prime rate plus a variable of approximately +0.5% to 1%, versus the higher interest rates of credit cards. Note that you’ll need an excellent credit score and stable employment to be approved.

 

Refinancing your home can be a complex decision when considering all of the factors involved. Don’t hesitate to give us a call at 613-228-3888 if you require more clarity on your mortgage’s details, we’d be happy to walk you through it.

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

How to Choose a Mortgage Broker

Mortgage brokers are independent, trained professionals licensed to represent you and provide you with honest unbiased mortgage advice. Due to their experience and connections within the mortgage industry, mortgage brokers have the knowledge required to present a proposal for financing to lenders in the best way possible to successfully obtain mortgage financing. Your mortgage broker represents you, not the mortgage lender, and will shop the market to help you secure the most favourable financing suited to your individual needs. This will save you both time and money! Here are some tips on how to choose a mortgage broker:

 

Start your search

Before meeting with a mortgage broker, do some research. Go online and search different websites for brokers in your area, ask friends and family for referrals, and check social media accounts to see which brokers are most active. You can also check the directory of licensed mortgage professionals on the Financial Services Commission of Ontario’s website to see which brokers are listed.

 

Set up a meeting

The best way for you to get a feel for a mortgage broker, and to see whether they’d be a good fit for you, is to meet them in person. This way, you have the opportunity to ask questions that pertain to your specific circumstances and to see if the broker is attentive to your needs and wants. At Capital Mortgages we place a strong focus on great solutions, compassionate service, and honest ethics, to form a reliable genuine working relationship with you.

 

Ask questions

When you meet with a mortgage broker for the first time, you should feel confident asking them questions about how they do business and how they can best help you. Asking questions will enable you to make the most informed decision about your financial future. You could start by asking how the application process works, and inquire about the different lenders they work with and why they have chosen to work with them.

 

Check references

Finally, you will want to check references to make sure that previous clients were satisfied with the service they received. You can look at social media pages, Google reviews, and the company website to read client testimonials and reviews. We have a number of testimonials on our website and Facebook page that you may read to give you a good idea of the high-level of service we provide to every client.

 

At Capital Mortgages, our mandate is to offer the best financing products available for all your mortgage needs. Ready to set up an appointment with one of our experienced mortgage brokers or agents? Contact us 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.

How to Become Mortgage-Free Faster

If you have recently bought your first home — congratulations! It is a milestone worth celebrating and one that may have been a number of years in the making while you saved up your down payment and searched for the perfect place. Now that you are settled in your home, your mind may have wandered back to your finances and the monthly mortgage payments that you have committed to. Looking to become mortgage-free faster? There are benefits to paying off your mortgage off quicker, with the main one being that you will pay less interest in the long run. Take a look at our expert tips below:

 

Accelerate your payments

You are currently likely making monthly mortgage payments. However, if you switch to a bi-weekly schedule, you could pay down your mortgage faster while incurring less interest and also shortening your amortization period. With monthly payments, you are making 12 payments per year. On an accelerated bi-weekly payment schedule you would be making the equivalent of 13 full-size payments per year. This may not seem like a lot but it will certainly help you to pay off your loan earlier.

 

Increase your payments

Once you have been living in your home for a while and have a good handle on your monthly finances, you may find that you have some additional cash per month that you would like to contribute to your mortgage. Increasing your regular payments, even by $50 a month, will help you pay down your mortgage that much quicker. Make sure to discuss this option with your mortgage broker. Your mortgage may have restrictions on when you can make changes and how much you can raise your payments by.

 

Make additional payments

Though your mortgage payments are often fixed, you may be able to make additional payments towards your principal. For instance, when you come into larger sums of money, such as a work bonus or inheritance. This would depend on the nature of your mortgage and the prepayment privileges. By making additional lump-sum payments to your mortgage, you will be able to pay it down quicker and shorten the amortization period.

 

Shorten your amortization schedule

The amortization schedule of your mortgage is the time frame in which you have to pay the entire amount of the financing based on a set of fixed payments. Often the amortization period is set at 25 years, but shorter schedules are available depending on qualifications and your desire to do so. A shorter period means that your payments would be higher over that term, but your interest will be less.

 

The most important thing to remember is not to overstretch yourself financially, and to only commit to payments that you are able to make. Talk to your Capital Mortgages broker or agent to discuss your current financial situation and your future financial plans, to determine what is best for you long term and how you might be able to become mortgage free-faster.

 

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

What is Mortgage Default Insurance and Do I Need it?

The mortgage world can be a tricky one to enter. As interest rates keep fluctuating and qualifying rules keep changing, you can be left feeling thoroughly confused and overwhelmed. Don’t worry! Our expert team of Capital Mortgages agents and brokers are here to help. Have you heard the term ‘mortgage default insurance’ and are not sure if it applies to you? To clear things up, here is some information to better explain the point of mortgage default insurance and when you may need to pay it:

 

What is mortgage default insurance?

Mortgage default insurance is coverage provided to a lender that protects them in the case that a borrower stops making payments and defaults on their mortgage. Like any other insurance, mortgage default insurance requires additional premium payments. The premium amount will vary depending how much of the purchase price is being financed by the mortgage. Your mortgage insurance premium is usually added to your mortgage amount and paid off over the life of your loan. However, you do also have the option of paying the premium upfront from your own resources.

 

Do I have to pay mortgage default insurance?

In Canada, the minimum down payment you can put towards a home is 5 per cent. Any down payments between 5 and 19.99 per cent require mortgage default insurance. By protecting lenders against borrower default, mortgage default insurance offers homebuyers in Canada the ability to purchase property that would otherwise be financially out of reach. Mortgage default insurance is not available on all property types and amounts. A member of our Capital Mortgages team would be happy to help you navigate this issue.

 

How can I minimize my mortgage default insurance amount?

As the borrower, it benefits you to pay more money upfront: the greater the down payment, the smaller your mortgage and, in turn, the lesser your premium. Your down payment must come from your own cash resources. Financial gifts from an immediate family member are also allowable. If you are a first-time homebuyer, you may be eligible under the Home Buyers’ Plan to draw from your RRSP. Your mortgage broker will be able to discuss these options with you to help you determine which is best suited to your needs.

 

Are you still confused about mortgage default insurance and whether or not you need to pay it? We can help! Connect with one of our Capital Mortgages agents today and we will provide you with clear and concise advice, helping you to find the perfect mortgage solution to fit your needs.

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

Why Getting Mortgage Pre-Approval is so Important

Searching for a home can be an exciting but overwhelming task. To make things go as smoothly as possible when hunting for your dream home, consider getting pre-approved for a mortgage first. Mortgage pre-approval can save you time and hassle when you finally find the perfect home! Here are a few things you should know about obtaining a pre-approved mortgage:

 

What is mortgage pre-approval?

A mortgage pre-approval will help you to determine certain financial factors before you start looking for a home, such as the maximum amount you can afford to spend on a home and the expected monthly mortgage payments associated with that price. Applying for mortgage pre-approval is free of charge and doesn’t commit you to one specific lender.

 

Why should I get mortgage pre-approval?

  • The information you receive in obtaining a pre-approved mortgage will aid you in your home search. You will be able to budget accordingly and only look at homes within your financial range of affordability.

 

  • Mortgage pre-approval also allows you to ‘lock in’ a mortgage rate for a 120 day period. This means that even if interest rates go up while you are searching for a home, you are protected and guaranteed a mortgage at the agreed upon rate provided you purchase and close on a home within the 120 day period. If your mortgage lender’s rate falls during this time, the lender will honour the lower rate.

 

  • Being approved for a mortgage also signals to real estate agents that you are a serious buyer. When it comes to placing an offer on a home, your mortgage pre-approval shows the seller that you are stable in regards to financing. It could also help bolster your chances in a multiple offer scenario.

 

How can I get pre-approved for a mortgage?

The first step in getting mortgage pre-approval is to meet with an experienced mortgage agent who will be able to help you determine the best mortgage for your individual needs. They will ask you a series of questions and request specific documentation to get a thorough overview of your financial situation.

 

Capital Mortgages offers step-by-step personal assistance from knowledgeable mortgage brokers and an easy online application process. We’ll be by your side each step of the way, from mortgage pre-approval to finalizing your mortgage and the purchase of your home. Don’t hesitate — contact us today!

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

Important Home Maintenance Tasks for Fall

Ottawa is truly beautiful in the fall. The leaves on the trees turn from green to breathtaking shades of russet, ochre and crimson, while the crisp fall air provides a refreshing change from the humidity of summer. Fall is a time of transition, and this transition should also apply to our homes as we get ready for the coming winter months. By undertaking a few small home maintenance projects now, we can ensure the health of our homes throughout the colder weather. Our team has gathered together a few important fall home exterior maintenance tips for you:

 

Rake leaves

Taking care of your lawn is not just something to consider during the summer months, you should continue to do so during the fall and winter months as well. Make sure to rake up any leaves before the first snow falls. Leaves left under a layer of snow can rot and smother the grass, meaning you won’t have a lovely green lawn to show off when spring arrives.

 

Mow the lawn

Once you have raked up any fallen leaves, mow your lawn. Mowing the lawn is something that should be done regularly. Frequent mowing keeps your lawn under control and stops the long grass from becoming a hiding place for rodents and other small creatures, who may scurry into your home given half the chance.

 

Clean the gutters

Cleaning out gutters is far from an enjoyable outdoor task, but it is an important one! Clear your gutters of any rotten leaves, sticks or other debris to prevent them from overflowing with water in the case of a heavy rainfall this fall or winter.

 

Fix driveway cracks

If left untreated, any cracks in your driveway could pose a huge problem this winter. When snow falls and settles into the cracks, it could cause the concrete to freeze and then expand, making the cracks even bigger. Depending on the material of your driveway, find an appropriate product to fix cracks in the fall and avoid winter damage altogether.

 

Touch up chipped paint

Paint protects the exterior of your home. If paint is flaking or chipped, it means the protective layer is compromised. Chips and cracks could let in moisture, which cause mould and rot. To avoid this issue, make sure to touch up any chipped or flaking paint on the exterior of your home this fall.

 

Remove moss

Moss may look attractive covering your home but it can actually cause huge problems for both your home’s exterior and interior. Moss holds a lot of water, which can seep into your roof and, if left untreated, eventually inside your home. To avoid water damage or mould issues caused by moss, remove it before it has a chance to spread.

 

Are you looking to purchase a home this fall? At Capital Mortgages, we have the knowledge, experience and network to find you the most favourable financing now and for future terms. Do not hesitate – contact us today!

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

6 Reasons to be Thankful for Living in Ottawa

As we look forward to a wonderful Thanksgiving weekend in the beautiful city of Ottawa, we decided to put together a list of all the reasons we are thankful to be living in our Nation’s Capital. Ranked the best place to live in Canada by MoneySense in both 2016 and 2017, Ottawa blends city living with a small town feel — making it a popular choice of residence for many people. Here are just a few of the reasons why we love living in Ottawa!

 

Nature

Ottawa boasts an abundance of beautiful green space. With its many hiking and biking trails, you can explore everything the city has to offer without driving a car. Ottawa is also not far from the stunning vistas of Gatineau Park, a popular destination for outdoor lovers — any season!

 

Restaurants

In recent years, Ottawa’s culinary scene has exploded. From haute cuisine to hidden hole-in-the-wall eateries, this growing foodie movement means that whatever your taste, you’ll find something to satisfy it in Ottawa.

 

History

The city of Ottawa has a rich and interesting history, and there are a number of places to go to learn more about the city and its past. You can stroll along the Rideau Canal —  the oldest continuously operated canal system in North America and, during the winter, the longest ice skating rink in the world. Or you could take a stroll around Parliament Hill and learn about Canada’s political past. The bustling Byward Market is also filled with historical treasures just waiting to be explored!

 

Culture

One of Ottawa’s cultural hubs is the NAC, where you can experience the best in music, theatre, comedy and dance. If you’re a fan of music festivals, Ottawa can scratch that itch too — the city plays host to a number of festivals throughout the year, such as Bluesfest, CityFolk, Escapade and the Ottawa Jazz Festival. If world-class museums and art galleries are more your thing, visit the Museum of History, the War Museum, the National Gallery of Canada, or the recently renovated Ottawa Art Gallery.

 

Family

There’s no denying that Ottawa is a fantastic city in which to raise a family. It boasts great schools and healthcare, and is economically stable. As many homebuyers are getting priced out of bigger cities, such as Toronto and Vancouver, Ottawa has remained affordable.

 

Shopping

The recent expansion of the Rideau Centre has brought many popular high-end stores to Ottawa, turning the mall into a shopaholic’s dream. For those shoppers looking for something a little more unique, there are plenty of fantastic local businesses and boutiques in the Byward Market, Westboro and Hintonburg.

 

We hope that you enjoy a wonderful Thanksgiving with friends and family. If you are looking to secure a mortgage — consider choosing Capital Mortgages. We work to deliver unbiased mortgage advice from a vast choice of mortgage options with dozens of different lenders, saving you both time and money. Contact us today to get started!

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

5 Ways to Save Energy at Home

There are a number of energy-saving methods and behaviours that can easily be implemented within your home environment. The benefits of these are twofold: they will save you money on utilities and will help to protect the environment. Whatever drives your decision to start reducing your energy consumption at home, know that a few small day-to-day changes could create a lasting impact on both your wallet and the planet.

 

1) Change your light bulbs

This is one of the simplest and most affordable ways to conserve energy in your home. Energy-efficient light bulbs, such as LEDs, use 25-80% less energy than their traditional incandescent counterparts. In addition, they will last much longer! Though the initial cost is slightly more expensive than traditional bulbs, they will save you both money and energy in the long run.

 

2) Turn off appliances and lights when not in use

Though it seems like a no-brainer, many people forget to turn off lights or appliances when they leave a room. Perhaps you leave your porch light on overnight, or like to sleep with the TV on. By changing these behaviours you can help to reduce your home’s energy consumption, as well as your utility bill.

 

3) Choose alternatives

Make smarter energy-efficient choices about when to use certain home appliances: for example, wash dishes by hand instead of using the dishwasher, or hang clothes outside to dry rather than use the dryer. The appliances in your home that use up the most energy are those required to heat and cool it. Consider opening windows or using a fan in the summer, rather than turning up the AC. You might just notice a big difference in your utility bill.

 

4) Purchase a smart power strip

Did you know that when appliances are in standby mode they are still using up a large amount of energy? Electronics such as plasma TVs, DVD players, and computers, all have a standby mode that enables them to keep drawing power even when they are not turned on. Smart power strips can be used to turn electronics and appliances off when they are not in use to reduce energy wastage.

 

5) Install a programmable or smart thermostat

Smart thermostats, such as the Nest, could end up saving your household a couple hundred dollars a year. By programming your thermostat to reduce heating or cooling functions when you are away from your home or when you go to bed, you can easily reduce unnecessary energy consumption.

 

Making your home more energy efficient is a smart financial decision. Another smart financial decision? Choosing to find a mortgage with Capital Mortgages! We work to deliver unbiased mortgage advice from a vast choice of mortgage options with dozens of different lenders, saving you both time and money. Contact us today to get started!

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

5 Simple Steps to Getting Your First Mortgage

If this is your first time getting a loan or mortgage, the process can seem overwhelming. To make it simpler, we’ve broken the process down into five easy-and important-steps:

 

Determine a borrowing budget

You’ll want to be realistic about what amount you can borrow based on your monthly expenses (keeping in mind your other expenses and property taxes, homeowner’s insurance, and maintenance costs). Your mortgage broker can help you determine what your monthly mortgage payment would be based on your down payment, interest rates, and length of loan term.

 

Save for a down payment

For a first mortgage, you’ll need to have the down payment ready to supplement your mortgage. In Canada, the minimum down payment is 5% of the purchase price of your home. If your down payment is less than 20% of the purchase price of your home, you are required to purchase mortgage default insurance. This insurance will protect the lender in the case that you default on your loan and is arranged by the lender the mortgage broker places your mortgage with.

 

Mortgage rates

Keep in mind that the lowest interest rate may not always be the best option for your specific needs. Your mortgage broker will explain the differences to you. For more information about rates, read our latest blog post: ‘A Quick Discussion on Interest Rates’.

 

Choose a lender or mortgage broker

An experienced mortgage broker will be able to help you learn about what types of products might best fit your individual needs. The mortgage broker will shop the market for you to make sure you are offered the rate and product you deserve. This is the time to arrange a pre-approval with the mortgage broker.

 

Prepare your documents

Once you’ve completed all of the previous steps you’ll need to gather your required paperwork. Often these documents should be provided even at the pre-approval stage. Lenders will require letters of employment and income, recent paycheck stubs, tax returns, bank account statements, and information on other debts or loans.

 

If you’re a first-time homeowner, the qualified professionals at Capital Mortgages can help you determine the loan that will best fit your needs. We offer as many in-person meetings, phone communications or emails as needed so you feel comfortable with the mortgage process. Contact us today!

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

Essential Cleaning Tools for Your Home

Whether you have just moved into your first home and need to put together a kit of cleaning supplies, or your existing tools need an update, we’ve put together a comprehensive list of the most important and essential cleaning tools to keep your home tip top and squeaky clean!

 

Microfiber cloths

This little cloths are fantastic in pretty much every room of the house! They are super soft so won’t scratch surfaces, and are great at picking up dust and leaving a streak-free finish. They work amazingly well on windows and mirrors.

 

Swedish dishcloths

Never heard of a Swedish dishcloth? You’ve been missing out! Swedish dishcloths are amazing multi-tasking tools that can take the place of your kitchen sponges and paper towels. Made from a blend of cellulose and cotton, they are natural, super absorbent, and can even be washed in the dishwasher or washing machine. Perfect for wiping down countertops and mopping up spills!

 

Rubber gloves

Protect your hands when using harsh cleaning supplies by wearing a pair of rubber gloves. Gloves are also good to wear when washing dishes!

 

A bucket

A large bucket can be used to store cleaning supplies when not in use, as well as for a multitude of other jobs around the house. Fill it up when cleaning floors, windows, or even scrubbing your back deck.

 

A squeegee

These handy little items work well in the bathroom for cleaning the shower after it’s been used! By wiping the water droplets away immediately you can prevent the appearance of mould. Squeegees are also great for cleaning windows.

 

Scrubbing brushes

Sometimes a cloth just won’t stand up to the task! In places such as the bathroom or kitchen, you may have to use a bit of elbow grease to shift stubborn stains from tiles or around the sink. For those smaller harder-to-reach spots, such as the grout between tiles or around the faucet, you can use an old toothbrush!

 

A dustpan and brush

Handy for tidying up crumbs on hard floor surfaces such as linoleum or hardwood, especially if you have children or pets! A full-size broom with a clip on dustpan will prevent you having to bend over or kneel when sweeping up.

 

A vacuum cleaner

A heavier duty items to keep floors clean, especially if you have rugs or carpets! By keeping your floors free of dust and hair, you can keep allergies at bay.

 

For more useful and important home tips, make sure to follow Capital Mortgages on Facebook, LinkedIn and Twitter! Looking for a mortgage? We offer step-by-step personal assistance from our team of knowledgeable mortgage brokers to make your life easier! Don’t hesitate to reach out to us today!

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

Tips for Downsizing to a Smaller Home

Are you downsizing to a smaller home this year? Perhaps your children have flown the nest, or maybe you’re finding it difficult to maintain such a large home — either physically or financially. Whatever the reason, there are a few things you should take into consideration when looking to downsize. Here are a few of our Capital Mortgages top tips for downsizing to a smaller home:

 

Make an inventory

Taking an inventory of existing items is a good way to see what you have and what you want to keep, discard, sell, or donate. You may find that you have a number of duplicate items: the kitchen is the worst area for this! Do you really need all three pairs of salad tongs?

 

Sell unwanted items

Selling off your large or unwanted items is a good way to make a little bit of extra money while you downsize. This extra cash could then be used towards new, more appropriate items, for your new space. Online marketplaces are a great place to list your unwanted items. You can also donate certain items, or ask family members if there is anything they would be interested in taking.

 

Measure, measure, measure!

Take note of the dimensions of your new smaller home as well as your existing furniture. Before you move, you should know which furniture items will easily fit into the new space which will just be too big.

 

Look for storage solutions

Does your new home have a lot of storage space? If not, look to update the space with innovative storage solutions, such as under-bed storage, hanging racks and built-in shelves.

 

Pack as you go

Move through your house room by room, assessing items and packing as you go. It helps to start in a room that you don’t use very often, such as the basement or guest room. Once you’ve gone through one room, try and get rid of the items quickly — whether you are packing, donating, or selling them. This stops you from going back and changing your mind. For more tips, read our blog on the best packing tips when moving home!

 

Ask questions

Some good questions to ask yourself as you pack could include:

  • When was the last time I used this item?
  • Can I see it fitting into my new life at my new home?
  • Does this item have sentimental value that can’t be replaced?
  • Could I get by without this item?

 

Downsizing can seem like a daunting task, but hopefully these tips will make the job seem less overwhelming. For any information you may require regarding a new or existing mortgage, we can help! We work with over 35 lenders to secure the best financing for your needs. Don’t hesitate to contact Capital Mortgages today.

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

A Quick Discussion on Interest Rates

Is the interest rate a major factor in any mortgage-making decision?  Absolutely.

Is the interest rate the only thing that matters when choosing a mortgage? I don’t believe so.

 

The (un)importance of rates

Just as the ‘price’ of your next major purchase – say a car – is a very significant factor, it is not the only factor that you are going to consider.  And perhaps it won’t even be the main factor. Shopping for a mortgage is no different.

I believe the final decision in choosing a mortgage is a balance of competitive price, affordable payments, and the flexibility to meet your individual needs.

I’m sure you’ve seen mortgage rates posted online, heard them on the radio, or discussed them with friends and listened to their experiences.  However, you can’t know every single detail that contributed to that “great rate that my mortgage person got me”. Some of those rates have terms and conditions that you may not meet.  They may be for limited time frames. They may not apply to all property types. They may only apply to a certain loan to value – for example, is the down payment less than 20% or more than 20%?  All these factors will affect the rate. The list goes on and on. Like anything else, you need to find out what is behind the price.

 

What next?  

Who has the best rate?  What are their credit rules? What can I afford?  The list of questions may seem endless. And they all matter.

The point I am trying to make is this: Any one of a number of factors could play such an important part in the decision as to override simply what product has the best rate.  At Capital Mortgages, our goal is to obtain the most current competitive price available for you while ensuring affordability and flexibility for you down the road.

 

We work for you

Acting with your best interest in mind is what the Brokers and Agents at Capital Mortgages are all about.  And sometimes that means not only going for whichever lender has the best rate. It is about doing the research for you,  providing you options, and making sure that the mortgage meets your individual needs. It is about making sure that a small rate advantage upfront does not turn out to cost you thousands in the end. That is why our experienced team at Capital Mortgages will always help you find a mortgage with your best interests in mind.

Yes, rate is important — but it is not the only thing to consider.

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

9 Packing Tips to Make Moving Home Easier

Congratulations on your beautiful new home! Now, you face the less-than-fun part: Packing all of your many belongings so they can safely arrive at your new place. This is easier said than done, but here are a few tips to ensure your move is streamlined and stress-free:

 

 

1) Purge as much as possible

 

Take this opportunity to de-clutter, donate and get rid of anything you don’t really use or need. That way, you’ll have a LOT less to move on moving day (and you won’t have the same unnecessary items attracting dust in your closet).

 

 

2) Hire movers at least a month out

 

Make sure to research and hire movers at least a month ahead of time so you can plan and take time off work, etc., as needed. Many movers get busy on weekends, especially in warmer months and peak moving seasons, so consider saving money by moving on a weekday.

 

 

3) Pack in shifts

 

Pace yourself when it comes to packing! Packing slowly over time will be much less stressful than packing it all last-minute.

 

 

4) Protect your delicate items

 

Pack delicate items and expensive electronics (like TVs) in their original packaging (if possible). Or, wrap these items in packing paper, bubble wrap or quilts to ensure they aren’t broken when jostled or moved.

 

 

5) Disconnect your services

 

Utilities are often one of the last things you think about when you move, but you’ll save money and confusion later if you contact your utility companies ahead of time to disconnect your services. Also file a change of address with the postal service and any other important companies a few days before you move.

 

 

6) Accurately label moving boxes

 

Being careful about labeling your moving boxes will help you to find and organize your household items once you start to unpack. Include details about where the items were found or which room the items should be placed in.

 

 

7) Use smaller boxes for heavier items

 

For heavier items—such as books—you’ll want to use smaller boxes. Heavier items in larger boxes will be harder to lift and to balance when moving.

 

 

8) Stack dishes vertically

 

Dishes will be safer and easier to move when stacked vertically versus horizontally. Place packing paper or bubble wrap between each plate for extra protection.

 

 

9) Set aside cleaning supplies

 

Rather than packing up all your cleaning supplies to use at your new place, leave some behind at your old place. That way, you can do a deeper clean of all the spots you couldn’t reach when your furniture was in the way.

 

For all your mortgage needs, including information on renewing your mortgage or refinancing your property, the experienced team at Capital Mortgages can help! Do not hesitate to reach out with any questions or concerns you may have — we look forward to hearing from you.

 

 

Capital Mortgages Inc is an independent brokerage in the Mortgage Centre Canada Network and one of Ontario’s leading real estate mortgage brokerages with offices in Ottawa and the valley.

5 Ways to Update Your Deck this Summer

After a long cold winter, we are finally slowly emerging into the sunshine like butterflies from a chrysalis. The past few days of warm weather and sunshine may have you looking out into your backyard with a critical eye. How did your deck manage through the harsh winter? If your yard is looking less than satisfactory, don’t fret — you may only need to make a few small updates to get your deck looking and feeling summer ready. Here are a few top expert tips:

 

1) Stain the wood

Is your deck looking a little tired and worn after the winter? Treat the wood to a fresh new stain and have it looking back to its old self in no time! A penetrating weatherproofing stain will also protect the wood from future bad weather.

 

2) Get an outdoor rug

Perhaps the snow and ice has your deck looking a little weathered. If you don’t have the time to treat or paint the wood, pick up a bright and colourful outdoor rug instead! It’s a quick and affordable update that really makes a difference.

 

3) Add some planter boxes

Want to add some lush colour to your deck? Get a couple of planter boxes to hang on the railing for an instant splash of colour. If you’re a keen chef, planter boxes are also great for growing herbs!

 

4) Create a shady spot

It’s fantastic if your deck gets a lot of sun, but sometimes the heat can be a bit much. Create a shaded spot for eating, reading, or relaxing by adding a gazebo, pergola or patio umbrella.

 

5) Update your outdoor furniture

Are you still using the same outdoor furniture that you’ve had for years? It may be time for a change! Update your deck with some relaxed seating, perhaps a couple of benches or some comfy chairs, complete with colourful outdoor cushions to make your deck a stylish and cosy place to hang out.

 

Are you looking to build the backyard deck of your dreams? A refinance of your current mortgage could be the way to make that happen. Refinancing is a strategic financial decision that is applicable in a variety of situations and may require an advisor to ensure the best solution is found to fit your specific needs. Don’t hesitate to contact the team at Capital Mortgages today!

 

6 Myths and Facts of Reverse Mortgages

 

Over years of owning a home and making mortgage payments, you’ve built a nicely-sized nest egg of home equity. However, that portion of your net worth is essentially untouchable until you choose to move or sell your home. A reverse mortgage allows you to borrow against your home’s value to pay off existing debt, make home improvements or cover other expenses.

 

Reverse mortgages are considered “reverse” because instead of making mortgage payments, the loan provides payment to the borrower. Borrowers can receive funds in installments or one lump sum, and also have the flexibility to repay the principal and interest in full at any time. Here are some common “myths” and facts about reverse mortgages:

 

1) MYTH: Anyone can get a reverse mortgage.

FACT:  Only Canadian homeowners 55 or older can get a reverse mortgage. Other qualifications include your property type, location and market value.

 

2) MYTH: To get a reverse mortgage, your home must be completely mortgage-free.

FACT: You don’t need to be completely mortgage-free to get a reverse mortgage. In fact, some borrowers use reverse mortgages to pay off existing mortgages and debts.

 

3) MYTH: I will have to pay taxes on the money I receive.

FACT: All money you receive for a Canadian reverse mortgage is tax-free. These reverse mortgages don’t affect Old Age Security or other government benefits you may already be receiving.

 

4) MYTH: I will have to make monthly payments on what I borrow.

FACT: You don’t have to make monthly payments on the money you borrow (interest or principal payments alike) until you choose to move or sell your home.

 

5) MYTH: A reverse mortgage will allow me to borrow without limits.

FACT: A reverse mortgage allows you to borrow up to 55% of your home’s value. This protects a borrower from borrowing too heavily against a home’s value.

 

6) MYTH: I may be forced to move as a result of a reverse mortgage.

FACT: Because you aren’t required to make monthly payments, you’ll never be required to sell or move as a result of changing home values. The amount you will eventually have to repay won’t exceed the fair market value of your home when it’s sold (provided you properly maintain your property).

 

Interested in figuring out if a reverse mortgage is right for you? Contact Capital Mortgages today to learn more about reverse mortgages and get a free quote.

 

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.

 

New Mortgage Rules 2018: What You Need To Know

If you own a home in Canada, are currently house-hunting, or are looking to buy sometime in the near future, you’ve no doubt been following the news closely for the past few months. As soon as word hit that the Office of the Superintendent of Financial Institutions (OSFI) would be introducing new mortgage rules at the start of 2018, people started scrambling to understand what this would mean for them and their home purchases.

 

Now that January is here, and the new mortgage regulations have been implemented, you may be feeling more confused than ever. Read on to learn more about the new mortgage rules introduced on January 1, 2018, and how they might affect you this year:

 

What Are The New Rules?

There are a number of changes but the one garnering the most attention, and the one that will affect the most people, is the introduction of a stress test for all mortgage applicants. Now, regardless of the size of their down-payment, home buyers will have to show that they can afford their mortgage payments should interest rates increase. Under the new mortgage “stress test”, potential home buyers will need to qualify for a mortgage at a rate either 2% higher than the mortgage rate they qualified for, or at the Bank of Canada’s ‘benchmark’ rate.

 

Why Are The New Rules Being Introduced?

While taking into account the rapidly rising prices seen in the Canadian real estate in the past few years, the new rules are aimed at cooling the housing market and keeping things under control. In the past decade, Ottawa has made six regulatory changes to the mortgage market in an attempt to limit the amount of debt taken on by Canadians and financial institutions in Canada.

 

Who Will Be Most Affected?

The new mortgage rules will likely affect around 100,000 Canadian home buyers, as well as those looking to refinance their mortgages in 2018. Home buyers will have less purchasing power than they would have done before the rules were implemented on January 1st .This could mean that home buyers will have to settle for a less expensive home than they had originally anticipated, or will have to wait to save up a larger down-payment. Homeowners looking to refinance their mortgage in 2018 will have to qualify according to the higher stress-state rates rather than the actual mortgage rate. This means that homeowners may have to settle for a smaller mortgage.

 

The team at Capital Mortgages happily extends our services to help you understand the 2018 mortgage rules and how they will affect you, your family, and your finances. We have summarized the new rules as best we can in this blog post for you but, should you have any further questions, please do not hesitate to reach out and speak with one of our experienced mortgage brokers today.

 

5 Questions to Ask Before Buying Your First Home

 

Finding and purchasing your first home can be both thrilling and frightening all at once—thrilling because you’re taking a major step toward independence, and frightening because of the added responsibility that step means.

 

Buying a home is easily one of the biggest financial decisions you’ll make in your life, so it shouldn’t be entered into without asking yourself some critical questions:

 

1) Am I ready to become a homeowner?

Homeownership requires more commitment and maintenance than other alternatives (such as renting). As a homeowner, you’ll be responsible for fixing anything that breaks, as well as maintaining the interior and exterior of your home. It also means you’ll be less mobile, since you will be legally and financially bound to your home (until you decide to sell it).

 

2) How much can I (reasonably) afford?

One major mistake first-time home buyers often do when house-hunting is to ignore the price tag. Take a look at your finances (i.e., income, debt, expenses) and determine what portion of your budget you could dedicate to a mortgage payment. As a general rule of thumb, you’ll want to keep your home payment less than 35% of your monthly income.

 

3) What will be my total out-of-pocket costs?  (i.e., utilities)

There are plenty of “hidden” costs when it comes to purchasing a home, including closing costs and possibly condominium association fees. In addition to figuring out your future monthly payment, you’ll want to decide how much you’ll want to save for your down payment, minimum 5%, and additional costs incurred during and after your home’s purchase such as property taxes. You’ll need to include utilities and any other new expenses when doing budget forecasting.

 

4) What loans do I qualify for?

After you determine how much of a mortgage you can reasonably afford, you’ll need to apply for a mortgage to see how much a lender is willing to lend you (or, the maximum loan amount). This amount will differ based on variables such as your credit history, debt-to-income (DTI) ratio and employment and income. Pre-qualifying before determining a final mortgage allows for more flexibility in your mortgage rates and amount.

 

5) Will this home fit my long-term needs?

Do you foresee your job moving locations in the near future? Will you be expanding a family or taking care of a parent? You’ll need to make sure that whatever home you choose to invest in will not only cover your immediate needs, but your future needs in years to come.

 

Are you ready to take the leap into home ownership? Capital Mortgages can help you find the best mortgage by searching the most competitive lenders in Canada. Contact us today!

 

What is a Home Equity Line of Credit (HELOC)?

Did you know you can easily finance purchases related to home ownership (i.e., renovations or home repairs) by using your home as a borrowing tool?

 

A Home Equity Line of Credit (HELOC) is a loan secured against the equity of your home. Because you’re using your home as collateral, this often means a lower interest rate on your loan. Additionally, borrowing to improve a home may result in increased home value.

 

How does a HELOC work?

 

Home equity is the difference between the value of a home and the unpaid balance of its mortgage. This value increases over time as a homeowner pays off a mortgage and the value of a home increases. HELOC loans can be distributed for up to 65% of a home’s appraised value, and can be combined with a regular mortgage for a maximum of 80% of a home’s appraised value.

 

A HELOC is set up as a line of credit with a set maximum draw, rather than a fixed dollar amount. Once a HELOC is negotiated, you can borrow up to your limit at any time. Much like a mortgage or credit card payment, you make minimum monthly payments on the borrowed balance. You would have a draw period during which you can use your line of credit, and a repayment period during which is must be repaid.

 

How is interest calculated?

 

HELOC interest is often calculated on a daily basis, since balances may change at any time depending on draws and payments. Your rate of interest is divided by 365, and then multiplied by the average daily balance during the month. For instance, a 28-day month may mean less interest than a 31-day month.

 

Are you interested in funding a temporary home project or other expense by using the equity in your home? To see if a HELOC would be suitable for your needs, 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.

Capital Mortgages is the best choice for First Time Home Buyers.

Learn How Regular Home Maintenance Can Save Money and Time.

Protecting your home today means that you need to have an efficient home insurance coverage in place and a dependable house maintenance routine.

The insurance will cover the short-term unanticipated repairs like roof leaks, while the maintenance routine will prevent long-term surprises. If a roof is periodically maintained, this eliminates the need to replace an entire roof in cases of bad weather.

Do you want to keep the “surprises” of your house in check? Here are some pretty realistic home maintenance tips:

1. PREVENTIVE HOME MAINTENANCE TIPS
The regular repair of appliances and house material prevents long-term, complex maintenance and saves on costs like utility bills and the lifespan of these appliances. Notably, appliance manuals must be read before repairing the appliances.

2. FURNACES AND AIR CONDITIONERS
Regularly changing the air filters, at least monthly, reduces the amount of energy needed for air filtration.

To do this, examine the condensation and drainage lines of the air conditioner to check for blockage. Subsequently, ensure these and the intake screens are free from debris.

3. SINKS, SHOWERS, AND TOILETS
When faucets or toilets leak or run, they translate to overflowing water bills. Regularly replacing the washer or seal in taps can reduce water loss, and avert damage around a sink.

It is also imperative to check the flapper in a tank, as it deteriorates over time and may need replacement.

Remember to include drain strainers as they prevent large particles like hair or food from passing through and clogging the pipes.

4. WATER HEATER
Without the inclusion of installation costs, new water heaters cost an average of $800 to $1000. Therefore they must be maintained by flushing annually with a plumber. Any sediment stuck at the bottom of the heater is then released, thereby reducing damage to the entire unit.

5. WINDOWS
Drafts in windows result from cracks and unsuitable insulation, which translate to higher energy bills.

Checking the waterproof filler and sealant of windows every spring and winter calls out for repairing of any cracks present. This will prevent their expansion to larger cracks that need insulation.

6. GUTTERS AND EAVES TROUGHS
Regularly cleaning the above of debris can prevent flooding and avert water damage to a home.

7. ROOF
Roofs should be inspected for debris and shingles. While most shingles may last up to 18 years, harsh weather can damage them. Destroyed shingles cause leaks on the roof and disrupt the structure and tranquility of a home.

It is advisable to check the condition of your roof or conduct a professional, especially after a harsh weather occurrence, such as a storm.

TOGETHER, regular home maintenance can help prevent long-term costs!

Keep your surprises in check!

Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

How Does a Reverse Mortgage Work – What You Need To Know

Of all the different age groups that are eligible to take out some form of financial aid, it is the senior citizen age group that requires the most financial assistance yet have the least amount of options. This is because a majority of those within this age group have already retired and only rely on their savings and pension as a source of funds to help them live out their remaining years. Through the introduction of the reverse mortgage, senior citizens have now been given the opportunity to get the financial aid that they need for medical care, home improvement among other financial aids.Still unknown to many, this retirement method is helping senior citizens by eliminating their monthly mortgage payments and putting money in their bank account

This has been made possible because unlike traditional forms of mortgages and loans available in the market, reverse mortgages are exempted from any tax obligations, and the responsibility of the payment falls on the financial institution or creditor. Senior citizens who have been granted a reverse mortgage are not required to make any form of repayments to the financial institution or creditor for as long as one or both senior citizens remain to live in the home whose equity has been used.

If you are considering taking out a reverse mortgage, there are a few requirements you would need to present when you go to a creditor or financial institution. Here are the requirements that you would need.

Age Requirement

The reverse mortgage is available only for individuals who are at least 55 years and above. Once it is proven that both spouses are at least 55 years of age and above, both will become eligible to take out a reverse mortgage.

Home Equity

The equity value of your home is its fair market value minus any existing loans that you may have taken out. To get the home equity value of your property, you would need to attain the services of an appraiser. For your home equity to also be eligible, you must be in ownership of a permanent type of property such as a single house, an apartment or condominium. If you live in a mobile home or a trailer, you would not be able to qualify for a reverse mortgage.

Home Equity to be Applied Must be Primary Place of Residence

If you have been fortunate enough to be able to purchase a vacation home, you would not be able to use this towards the reverse mortgage. This is because the reverse mortgage can only utilize the home equity of the house that you have stayed most of your life with, which is your primary place of residence.

Downsides Of A Reverse Mortgage

Even though this method seems like an easy way out, there are still some factors that you may need to consider.Let us look at a few:

Interest: A reverse mortgage is still a loan so that it will accumulate interest over time. However, there are no monthly payments on a reverse mortgage. The amount you have to pay back grows as time goes by, but the loan will not be due until both you and your partner have died or you have decided to sell your home. Even though the amount you have to pay grows, the loan repayment money never exceeds the value of your home.

Complicated: Too many senior citizens, reverse mortgage loans may seem like a complicated process.

Estate Value: The estate value may lower as days go by. This is something that you may need to consider if you plan to leave your property to children.

There is Not Enough Cash To Be Tapped: You may be disappointed to learn that you can only use some your home equity, even if you have a lot of home equity. Even though your home may be worth more, rules evaluate your equity by a maximum home value. However; the actual loan amount will be determined by a calculation using current interest rates, the amount you owe on the home, your age and the appraised value of your home.

How Can You Get A Reverse Mortgage?

It can take you just a few hours to speak to a qualified mortgage broker at Capital Mortgages to request a quote. We can help you understand how Reverse Mortgages work and calculate how much you can get.

As with any major financial decision, securing a reverse mortgage is not to be entered into lightly. All reverse mortgages require you to seek professional counseling to make sure you understand all the risks and rewards of this mortgage product.

 

Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

Refinancing your mortgage?

Refinancing your mortgage may be great if you want a better interest rate, have extra cash or reduce your monthly payments. However, many people haven’t thought about refinancing or don’t know what it is. Before deciding to refinance, know all the facts first, so you know what you are getting into.

So, what is refinancing? When you refinance your mortgage, you pay off your current mortgage in exchange for a new mortgage and new terms. The application and procedure for refinancing are very similar as to when you first applied for a mortgage. When you do this, it is possible to get a new mortgage with different terms, interest rates, monthly payment amount, and payment time.

If you decide to go this route, there are a few things you may want to consider, like what would the benefit be? Some loan contracts have penalties if you finish your payments early, in full or in part.

By taking another look at your mortgage, you may discover that the current mortgage rate is lower now than what it was when you first applied for your loan. In this case, there may be a possibility that you can lower your monthly payment if you don’t shorten the payment term or the balance doesn’t have a drastic change. In the industry, the rule of thumb is that if the current interest rate is at least two points lower than your current rate, it is well worth your while to look at refinancing.

Many people choose to switch to a fixed rate mortgage versus staying with an adjustable rate. As the name suggests, an adjustable rate may cause your interest rate to fluctuate from time to time, and probably stay at a higher rate. Switching to a fixed-rate can help a person get a constant lower rate at that time. Some people choose to go for an adjustable rate because in the beginning the rates are low, but can increase or decrease at any given point in time. When deciding to refinance, you will want to examine these options.

There are reasons why someone would want to refinance a mortgage in the hope that it will help pay other debts or they will receive lower rates. Before you enter into any agreement, consult a mortgage broker to help in making the best decision possible. Do your research when you look at different rates and terms to ensure you are getting a good deal and understand all of the new terms. So, if your credit score has changed, the interest rates have changed, or you are wondering if you may be able to save money, you may want to look into refinancing your mortgage.

Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

3 Steps to Take Before Applying for a Mortgage

Do you think it’s time to contact your local mortgage broker for a new home purchase or a refinance on your current home? Here are three things to consider before filling out the loan application.

1. How is your credit?

Your credit score will impact your ability to get a loan more than anything else. The higher your score, the better interest rate and terms you can get on the loan. The best thing to do is to view your credit report from the three credit reporting agencies, Transunion, Equifax, and Experian. You can do this once a year for no charge. Once you have the reports, you should look them over carefully to make sure all the information is correct. Once you’ve verified that everything is accurate, you will then need to look at your overall score. If your scores are anywhere above 580, you should be able to get a loan. Ideally, you want to be above 700, but there are programs that work with credit scores lower than that.

2. Pay down your debt as low as possible

There are two main reasons to focus on paying off your debt before applying for a new loan.

If you have any bad debt or are behind on any payments, your credit score will be lower. If you can pay off debts that show up on your credit report, you will see your score go up. Also, if you have a high debt to credit ratio, your credit score will be lower as well. A high debt to credit ratio means that you have used up most of your available credit limit. For example, let’s say you have a credit card with a $5,000 limit and you owe $4,500 on it. You will show up as a higher credit risk because you’ve almost tapped out your limit. On the other hand, if you only owe $500 on the card you will show up as a lower risk, and your score will be higher.

The other reason to pay off debts is that it will increase how much you can borrow on your home loan. Your mortgage broker will look at your debt to income ratio which is how much you owe on debt every month in comparison to your income every month. The more cash flow you have in your budget, the higher your mortgage payment can be. The higher the mortgage payment, the nicer house you will be able to afford.

3. Fix up your home

If you are not looking to buy a new home but only wanting to refinance your current home you not only need to do the first two items on this list, you also need to make sure your house is spruced up and looking nice. The refinance is based on a home appraiser giving value to your home. The more repairs that are needed, the lower the value the appraiser will give your home. You want the home to appraise as high as possible to get the best loan options. If you have at least 20% equity in your home, you will have the best rates, and you won’t have to pay extra mortgage insurance.
Your mortgage is usually your largest monthly expense, taking these steps will help ensure that you get the best deal possible with the lowest out of pocket expenses. If you are unsure, feel free to give Capital Mortgages a call, and one of our Mortgage Professionals will be happy to answer any of your questions.