Have questions about your mortgage? We have answers. We want you to feel educated and informed when it comes to your mortgage, so you feel confident and comfortable knowing you are making the best financial decision for you and your family.
The key difference between a Mortgage Savvy broker and a banker is that we work for you, not for the banks. Our top priority is finding the financing that works best for your situation. We bring you access to over 40 lenders, giving you the opportunity to take advantage of volume rates. Think of us as your own financial concierge service. We do the negotiating on your behalf, crafting creative solutions to meet your financial goals.
We get paid by the lenders, meaning it doesn’t cost you anything to get a more personalized experience when working with a mortgage broker. Plus, lenders pay us equally, so we do not make more money when choosing one over another. Basically, working with a mortgage broker means you get a professional negotiator working on your behalf for free. You can rest assured knowing you are our top priority and we’re here to secure the financing that works best for your situation.
Your mortgage is a tool that’s meant to support your financial goals, not hinder them. The key is to know your numbers and find a solution that works within your means. In order to determine how much you can afford, you should first consider your down payment amount and closing costs. Next, add up your monthly mortgage payments together with any additional ongoing costs (utility fees, property tax, etc.) and any other debt payments (credit card loans, car loans). Then compare this number to your total gross monthly income. This is called your total debt service ratio (the amount of debt versus gross income). Your debt total should equal no more than 40% of your gross monthly income. No matter what situation you’re in, it’s a good idea to run through your numbers with one of our mortgage specialists.
The minimum down payment you can make in Canada is 5% of the first $500,000 and 10% of the amount above $500,000. If you make a down payment of less than 20%, your mortgage is considered high-ratio. This means you’ll be required to:
The cost of your insurance payments will vary, depending on the size of your mortgage. You can choose between two insurers: Canada Mortgage and Housing Corporation (CMHC) or Genworth Canada.
Mortgage insurance is designed to protect the lender in cases where a borrow defaults. It can be paid in a lump sum upon closing, or in installments over the length of the mortgage.
A mortgage with a down payment of 20% or more is considered a conventional mortgage. This means you can:
Closing costs can add up to anywhere from 1.5 to 4% of the purchase price of a home. These are one-time transactions that commonly include: inspection fees, realtor fees, lawyer fees, and land transfer tax.
With a fixed rate mortgage, your mortgage rate and payments are fixed, meaning the amount you pay each month will stay constant for the term of your mortgage. With a variable rate mortgage, the mortgage rate will change with the prime lending rate, as set by your lender. Read on to learn the pros and cons of each.
Open and closed mortgages refer to the flexibility you have in paying off your mortgage debt. An open mortgage can typically be paid off in full, at any time, without any penalty. It can be an appropriate choice for those who prioritize flexibility in their mortgage. With a closed mortgage, you are allowed to make limited, penalty-free lump-sum payments, and there is a penalty if your mortgage is repaid in full before the end of its term. Find out what option is best for you.
While owning your own home can provide security, improve quality of life, and offer a solid financial investment, it’s certainly not your only choice. Renting can bring greater mobility, fewer responsibilities, and more financial flexibility. It’s important to carefully consider the benefits of both renting and buying before deciding whether you are ready to make a move.
Refinancing can be a wise move if: it reduces your mortgage payment, shortens the term of your loan, or helps you build equity more quickly. The cost to refinance your mortgage depends on the strategy you use to access equity or lower your interest rate; and there are several options available to you when considering a refinance. With a little Mortgage Savvy, you can determine if refinancing is truly beneficial for you.
You shouldn’t feel shackled to your mortgage for the rest of your life. At Mortgage Savvy, we’re all about helping our clients become mortgage free faster. You can do this through five key steps: 1) accelerating your bi-weekly payments, 2) rounding up your mortgage payments, 3) tossing any ‘found’ money at your mortgage each month, 4) making extra lump sum payments each year, and 5) staying up-to-date on interest rates and new mortgage options.
When it comes to your overall financial health, your mortgage is just one piece of the puzzle. Our clients are our clients for life, meaning we work with you well beyond renewal time. We’ll help you gain a better understanding of your financial situation, and provide sound feedback and ongoing advice to help you improve your personal wealth.