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What Is A Mortgage?
A mortgage is an agreement between a creditor and a debtor. It involves the exchange of money and temporary possession of an asset until the full repayment of the loan. The borrower gives up their property to the lender as collateral and only gets it back after meeting the conditions stipulated in the contract. That means you can permanently lose your house or whichever assets you give to the lender if you do not pay back the principal mortgage amount and the interest.
The contract contains all the loan conditions, such as the mortgage term or the duration you should take to pay it back. If you have a house with a full or partially completed mortgage, you can use its equity to get the mortgage. Otherwise, you can use the loan to buy a new property. Regardless of what you do, you must pay back the amount with interest within the agreed-upon time.
Our Mission
We desire to make the mortgage acquisition process easier for every Canadian who needs that type of financial assistance. We understand that comprehending the technical terms used in the industry can be difficult, just like navigating complex processes. Our brokers also care about reducing the time it takes to find a mortgage partner. We will share our network of lenders with you and avail all the information you need.
We want to make all our services revolve around our clients in a more advanced way than it is currently. That means your needs will always be first regardless of whether we are negotiating for the best loan conditions on your behalf or searching for suitable lenders for you. We will explore all the possible solutions in the traditional and private lending sectors to ensure you get the perfect match. We focus not just on your immediate reprieve; but also on long-term financial freedom.
Our Mortgage Agents Are Trained To Serve You
We make sure that all of our representatives are licensed by the Financial Services Commission of Ontario. This guarantees that the agents have the knowledge that they need to help you through any problem. We have regular meetings to make sure that our staff and our clients are on the same page. Our employees do not collect commission on their products, so they will never try to pressure you into a bad deal. Instead, they make sure your mortgage fits your terms. We give you service with a smile. Our service will make you want to come back the next time you need to buy a home or business.
Mortgage Brokers Richmond Hill Specialise In Mortgages Of Any Type
While we are the experts in the Richmond Hill area, each of our brokers has a different specialty. Some work on commercial mortgages for new businesses, while others are more focused on helping families find great homes in the suburbs. We do not waste time with extraneous services. These reasons make us the best mortgage broker in Richmond Hill. We would rather spend our time honing our ability to give you the best deal available. Once you tell us what you need, we will match you with the perfect agent for your unique situation. It does not matter if you are looking for a starter home, a condominium, a retail space, or an office. Turkin Mortgage brokers in Richmond Hill is ready to serve you. Contact us today to get started and turn your dreams into reality.
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What Mortgage Repayment Choices Do Borrowers Get?
Traditional and private lenders tend to give debtors two choices for repayment.
Closed plan
This repayment option is usually less flexible than the open-plan because it does not allow early payments. You wait for the mortgage term in the contract to elapse before you can pay back the principal amount. That means that if you choose to make large payments, you must be careful not to clear off the whole debt unless you do not mind settling penalties. However, you get to pay lower interests, which can help you save some money.
Open plan
The open plan allows you to clear your debt whenever you can, even before the term. It does not have any penalties, meaning you can prioritize the loan and pay it off at once whenever you get lumpsum funds. On the downside, the repayment term is usually shorter. You can choose a fixed interest rate, in which case you will get a one-year payment period or less, or a variable rate and get up to five years.
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Do Pre-Approved Mortgages Have Any Benefits?
Pre-approved mortgages have several benefits. Examples include lesser time for approval, meaning you get the loan quickly, and access to the correct lenders. To apply, you must send your financial documents to the lender, who will use the information to determine the amount they think you can pay. They will also use the documents to check credit ratings and research your background. After that, they will inform you of the amount they can give together with a repayment plan you must follow. If you accept the conditions, some of the benefits you are likely to experience include:
- Time savings since you will only search for properties you can afford.
- Adequate time to create an ideal budget for your lifestyle. You will know the down payment early to facilitate planning before receiving the loan.
- Dealing with lenders who already know your financial capabilities, meaning they already know you can pay them back.
Approval periods range from 60, 90, and 120 days – the shortest in the industry.
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Should I Choose Fixed Or Variable Interest Rates?
Knowing the advantages and potential repercussions of fixed and variable rates is the best way to ensure you make the correct choice. You must also factor in your situation in the decision.
Fixed Interest
Fixed interest rates are the most preferable in the region because of the stability they offer by remaining the same throughout the mortgage term. They allow borrowers to plan and budget properly to cater to the repayment and other financial responsibilities. Although they are higher than variable rates, you can easily set aside the same amount towards the loan payment. If your income remains consistent, you are less likely to experience more financial hardships or make your situation worse.
Variable Rates
The interest rates change during the amortization, meaning you will pay more during some months and less in others. Generally, the rates are lower than fixed rates, but it can be difficult to budget with the rate fluctuations.
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How Much Do I Need For The Down Payment?
The down payment is the money you pay out of your pocket to cover some of the purchase prices of the property you want. The mortgage pays the amount left over by the down payment. The type of mortgage you want, your financial situation, and your lender are some factors that influence the down payment. However, the standard rate is 20% of the total amount you need for the property.
Sometimes you can pay 5% of the value, but that means you will need a higher loan amount. The more down payment you can get, the less mortgage you will need. The higher the mortgage amount, the higher the interest and the repayment burden. If you cannot raise the 20%, consider getting CMHC insurance. It will reduce the risks for the lender and ease some of the pressure for you. That is why it is best to pay as much as possible.
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What Are Closing Costs?
Closing fees are charges you must pay during the finalization of a property purchase or mortgage acquisition. Typically, the costs range between 2% and 4% of the loan. The money caters to several mandatory components such as:
- Property appraisal
- Inspections
- Property and land transfer taxes
- Attorney fees or legal charges
- Adjustment costs
- Property insurance covers
You can talk to your mortgage broker about the above terms and their meanings. For instance, appraisals mostly confirm the property value to the lender, whereas inspections usually prove that the property does not have hidden issues and that the structural integrity is intact. Adjustment costs pay for all the factors the lender fails to cater to, such as extra taxes and utility bills.
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What Documents Must I Have To Get A Mortgage?
- Proof of income and relevant information
- All bank account information
- A liability list
- Proof of asset ownership – a list showing all your properties
- Blueprints or floor plans for the building if you want to apply for a new construction mortgage
- Lawyers’ contact details
- MLS listing
- Proof of down payment settlement
- Contract showing the sale of the property between you and the previous owner
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Terms That You Should Know When Closing A Mortgage
Amortization – This is the period the lender gives you to pay them back in full.
Appraisal – The appraisal is the process of assessing the property value before the issuance of the mortgage. The lender uses it as a guideline to determine the amount you should get.
Home inspection costs – The amount an inspector charges to determine whether the property has structural problems.
Deposit – The amount of money you give the property owner to show your interest. It serves as security.
LVT – Loan to value ratio refers to the mortgage amount you are applying for versus the property worth.
Down payment – Is a percentage of the purchase costs that you must cover before the mortgage caters to the balance.
Property transfer tax – The tax amount the borrower must pay after officially gaining ownership of the property. Do not pay before the asset is in your name.
Term – The time you take with the mortgage. It is often renewable.
The pre-payment option – Is the determinant factor when it comes to paying off the principal mortgage amount. In some cases, the pre-payment options have penalties, and other times, you can pay off early without accruing more charges.
Mortgage loan insurance – The insurance cover that is helpful when the down payment is too low. The mortgage size influences the insurance amount.