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Some useful information and links about mortgages, buying a home, selling a home and owning a home. If you need further assitance, by all means feel free to contact me.
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Do I need a mortgage Pre-aproval?
Know exactly how much home you can afford before you begin house hunting. Pre-approved mortgage
financing saves you time and gives you real negotiating power when it comes time to writing an offer.
Getting pre-approved means completing a mortgage application before you go house hunting. With a
pre-approval on a mortgage:
- You can confidently shop for a home
- You know how much you can spend
- You know the interest rate
- You know how much your monthly payments will be
- You could be protected against interest rate fluctuations since your interest rate may be
guaranteed for up to 120 days - if rates go down within these 120 days, your rate will
automatically be lowered
- You become a more attractive buyer and real estate client - the Realtor and seller know you're
serious and it may put you in a better position against other homebuyers who are not preapproved.
If you are looking for a pre-approved mortgage, it’s important that you are making an educated decision
with someone looking out for your best interest.
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How much can I afford?
Debt can become a huge burden if you’re not careful. So it's important to keep your total debt load in
balance, not just your mortgage payments. Simply, when purchasing a home, you need to focus on your
entire financial well being.
There are two simple rules, mortgage professionals use when reviewing your mortgage application and
how much you can afford:
- Gross Debt Service Ratio (GDSR): Your monthly housing costs shouldn't exceed 32% of your
gross monthly income. Monthly housing costs include but are not limited to: your mortgage
payments, property taxes, heating, and 50% of condominium or strata fees.
- Total Debt Service Ratio (TDSR): Your entire monthly costs shouldn’t exceed 40% of your gross
monthly income. Those expenses include but are not limited to: your housing costs and other
debt such as: car loans/lease, credit card payments, personal loans and line of credit payments.
Try our Maximum Mortgage Calculator
How much can you afford? Use our online Maximum Mortgage Calculator to calculate the maximum
mortgage amount you qualify for based on your income.
Buying a home is one of the biggest financial decisions you will make. It’s important that you are making
an educated decision with someone looking out for your best interest.
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Mortgage Wise - Everything You Need to Know
Buying a home is more than just a financial commitment. It involves choosing a neighbourhood and community that is
right for you. Home ownership may be the biggest investment you’ll ever make, so approach the housing market with a
firm understanding of the buying process, your objectives and current market trends. Mortgage Wise Canadian Bankers Association ebook.
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I'm Buying a Home - What costs can I expect?
Firstly, you need to come up with the minimum 5% down payment, (some exceptions apply). Over & above the
down payment, there are additional "closing costs" associated with purchasing a home. You need to have a
minimum amount of 1.5% of the purchase price available, (& provable by bank statements). Depending on the
size and value of your home, combined closing costs can range from $1,000 -- $3,000 or higher. Your lawyer will be
able to provide exact numbers. Closing Costs - Home Purchase worksheet.
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Home Buying Guide - CMHC
When buying a home, you have to juggle three important factors your prospective home’s location, style and cost.Here’s a handy worksheet to help you evaluate the details of each individual homes that you view. Home Buying Guide -Step By Step Worksheet CMHC.
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Document Checklist
Documentation and paperwork that could be required when applying for a mortgage
INCOME
- Letter of employment
- Recent Paystub
- T-4’s (last 2 years)
- Notice Of Assessment (last 2 years) from Revenue Canada
- Separation or Divorce Agreement
- Child tax credit confirmation with ages of children
- Pension – 3 months statements
- Business License (2 years)
- HST Return (2 years)
- T1 Generals (2 years)
- Lease Agreements
REFINANCE
- Proof of debts paid
- Appraisal
- Bankruptcy documents - ALL
- Property Tax Statement
- Mortgage statement, most recent
- Void cheque
- Water Test
- Lawyer information
PURCHASE
- Purchase and Sale Agreement
- MLS Listing or Feature Sheet
- Property Tax Confirmation
- Appraisal if required
- Sale of Existing home (Accepted Purchase & Sale Agreement)
- Mortgage statement, most recent
- Void cheque
- Lawyer information
- Realtor information
DOWNPAYMENT
- Bank Statements (3 Months) and/or RRSP Statements
- Sale of home (firm Purchase and Sale Agreement)
- Mortgage statement (Existing)
- Gift Letter
OTHER(For Lawyer)
- Proof of house insurance
- Driver’s License
- Birth Certificate
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A water test is required if the home you are purchasing has a well. If you need to collect a water sample yourself, collection bottles are available at my office or can be picked up at either the Nova Scotia Agricultural College or the Truro Hospital. Tests are dropped off for analysis, Monday to Thursday, and the basic test costs approximately $20.
Click here for information about how to collect a water sample.
Click here for your Water Requisition Form.
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Gift Letter
Mortgage Gift letter is what the donor of the gift writes to the lender stating that he has offered a gift of money to the home buyer. Download Gift Letter here.
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I'm Selling my Home - What costs can I expect?
Download the Closing Costs - Home Sale expense worksheet.
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How do I pay off my mortgage faster?
Paying off your home doesn’t have to take a lifetime. By planning ahead and sticking to the plan, you
have the opportunity to pay your mortgage off faster. Here are seven ways to pay your mortgage down
faster and decrease the amortization and interest costs off your mortgage:
- Choose a mortgage with a prepayment option - A prepayment option gives you the right to
prepay specified amounts of your mortgage principal
- Shorten your amortization period - By shortening your amortization period to less than 25
years you can create huge interest savings
- Increase your regular mortgage payment - Increasing your regular mortgage payment helps
you reduce your mortgage principal faster, which means you save interest
- Increase your mortgage payment frequency - If you increase the frequency of your mortgage
payments from monthly to accelerated bi-weekly, you are making one additional monthly payment
every year, which will cut your interest cost over the life of your mortgage
- Invest your tax refunds and cash windfalls - If you find yourself with more money than you
anticipated, you should consider making a lump-sum mortgage payment against the principal.
Your mortgage principal will decrease and you won’t have to change your spending habits
- Invest your pay raises – If you find yourself with a pay raise, increase your mortgage payment
amount. Increasing your mortgage payment helps you to reduce your mortgage principal faster
- Keep your mortgage payments high - When the time comes to renew your mortgage, keep
your mortgage payments high even if you’re tempted by lower interest rates and a lower monthly
payment. If you stick to your original plan, you’ll pay off your mortgage faster and enjoy huge
interest savings over the life of your mortgage.
Buying a home is one of the biggest financial decisions you will make. It’s important that you are making
an educated decision with someone looking out for your best interest.
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Short Term or Long Term, Fixed or Variable?
Choosing between a short or long term and fixed rate or variable rate depends on:
- The level of interest rate risk you can take
- Your flexibility
- The level of security you need.
Generally, you get lower interest rates with a shorter term (i.e. 1 year) and higher interest rates with a longer term (i.e. 5 year).
Consider a short term mortgage when:
- You are willing to follow interest rates closely and risk a higher rate when your term is up for renewal
- You think the current interest rate is high and expect interest rates to fall in the short term.
Consider a long term mortgage when:
- You prefer stability so that you are guaranteed the same payments for a longer duration.
- You think interest rates are likely to go up during your mortgage term.
In addition to choosing the length of your mortgage term, your mortgage interest rate can be fixed or variable.
Fixed Rate
A fixed rate is a guaranteed rate for the length of your mortgage term.
Consider a fixed rate mortgage when:
- You prefer stability so that you are guaranteed the same payments
- You have a tight monthly budget
- You are a first-time home buyer.
Variable Rate
A variable rate fluctuates with the market prime interest rate.
Consider a variable rate mortgage when:
- You can tolerate interest rate fluctuations in order to take advantage of possible lower interest rates.
- You are a seasoned home buyer.
- You have job stability.
Buying a home is one of the biggest financial decisions you will make. It’s important that you are making an educated decision with someone looking out for your best interest.
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Home Buyers Plan Guide - RRSP
Use this guide if you want information about the rules that apply to the Home Buyers Plan (HBP).Download the Home Buyers Plan Guide here.
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Home Buyers Plan - RRSP withdrawal form
Use this form to make a withdrawal from your registered retirement savings plan (RRSP) under the Home Buyers Plan (HBP). Home Buyers Plan - RRSP Withdrawal Form.
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Home Buyer Tax Credit
For 2009 and subsequent years, the HBTC is a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., generally means that the closing is after this date).Visit the Canada Revenue Agency website for more information about the Home Buyer Tax Credit.
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Mortgage Loan Insurance - What is it?
Lenders will require mortgage loan insurance if a borrower has a down payment of less than 20% of the purchase price of the home. By protecting lenders against borrower default, Mortgage Loan Insurance companies, (such as CMHC & Genworth), create and opportunity for Canadians to realize their dreams of homeownership. When you but your home sooner, you grow equity faster.
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Serving:
Truro,Cumberland,Pictou,New Glasgow,Trenton,Amherst,Bible Hill,Colchester,Guysbrough,Antigonish,North Shore,Nova Scotia, Hants, Enfield, Elmsdale, Masstown, Onslow, Stewiacke, Oxford, Maitland, Debert, Kennetcook, Halifax
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