mortgages 101

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mortgages 101 ebook Jody Thompson 416.450.5900 Remax Professionals Inc, Brokerage Wednesday, 24 April, 13

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Page 1: Mortgages 101

mortgages 101 ebook

Jody Thompson416.450.5900

Remax Professionals Inc, Brokerage

Wednesday, 24 April, 13

Page 2: Mortgages 101

So many things to consider.......

Wednesday, 24 April, 13

Page 3: Mortgages 101

Things to consider.....

How much can I afford?

When should I start looking for a mortgage?

Who can I trust to get the best mortgage?

What terms are important other than rate?

Helpful resources

Wednesday, 24 April, 13

Page 4: Mortgages 101

How much can I afford?

Wednesday, 24 April, 13

Page 5: Mortgages 101

How much can I afford?

Your bank or a mortgage broker will tell you the maximum mortgage you qualify for

Before you sign up for the maximum mortgage that you qualify for, make sure you consider any upcoming changes in your lifestyle that could impact your income or expenses - planning a family? Career change?

Two guidelines that are used to determine how much you can afford

Gross Debt Service - should not exceed 32% of your pre-tax monthly income (mortgage, taxes, home insurance & heating costs)

Total Debt Service - should not exceed 40% of your pre-tax monthly income (Gross Debt Service plus all other monthly loans including car loans, personal loans, credit card payments etc)

Wednesday, 24 April, 13

Page 6: Mortgages 101

When Should I Start Looking for a mortgage?

Wednesday, 24 April, 13

Page 7: Mortgages 101

When Should I Start Looking for a mortgage?

Very early in your house search

Knowing what mortgage amount you are pre-approved for & how much you have in a downpayment will provide you the maximum that you can pay for your new home

It is pointless to spend your time looking at houses that you cannot afford

Prioritize your search criteria to line up with your budget

Wednesday, 24 April, 13

Page 8: Mortgages 101

Who can I trust to get the best mortgage for me?

Wednesday, 24 April, 13

Page 9: Mortgages 101

Who can I trust to get the best mortgage for me?

A mortgage broker will often get you a better rate & terms than your bank

A mortgage broker has access to multiple lenders & will do the research to find you the best mortgage for you

Your bank - that you have had a relationship for years may not have an incentive to provide you the lowest rate

Banks often provide their best rates to new clients vs existing clients - sad but true!

Wednesday, 24 April, 13

Page 10: Mortgages 101

What terms are important other than rate?

Wednesday, 24 April, 13

Page 11: Mortgages 101

What terms are important other than rate?

Mortgage Term - The term in years that you are committed to with this mortgage

Mortgage amortization period - The period that the principal and interest is spread over. The amortization affects how fast the mortgage principal value is paid down and how quickly the homeowner builds equity in the house.

Fixed Versus variable - Is the interest rate fixed for the term of the mortgage or does it move as our prime rate moves?

Pre-payment options - can you double your payments or pay a lump sum on the anniversary date of your mortgage?

Transferability of your mortgage - if you move can we take our mortgage with us?

Wednesday, 24 April, 13

Page 12: Mortgages 101

Helpful Resources

Wednesday, 24 April, 13

Page 13: Mortgages 101

Helpful Resources

Mortgage broker - My favourite - Domenic Mirabelli - Mortgage Intelligence

Mortgage Calculator http://www.realtor.ca/Calculators/en-CA/calculator.aspx

Compare Canada’s mortgage rates http://www.ratehub.ca

Wednesday, 24 April, 13

Page 14: Mortgages 101

Let me assist you with your search.....

Jody Thompson sales representative

Remax Professionals Inc. Brokerage

www.thompsonsells.com416.450.5900

Wednesday, 24 April, 13