Certified Mortgage Brokers in Hamilton!
…a GTA based brokerage with a decade of experience under its belt.
Who We Are: Mortgage Brokers Hamilton
Certified Mortgage Brokers in Hamilton are dedicated to ensuring that property buyers, whether residential or commercial get the best deals. are dedicated to ensuring that property buyers, whether residential or commercial get the best deals. It is our mission to deliver the best results to our clients based on their financial needs. Our services include residential and commercial mortgages and mortgage refinancing.
Located in Hamilton- we are your local neighborhood mortgage experts. We know EXACTLY where you are coming from.
Why You Want To Work Us
Experience working with independent local professionals with access to hundreds of financial products to help you get the best mortgage that fits your needs. Whether it is a specific rate, term or condition that is a priority for you, we can help.
The key to a smooth transaction is knowledgeable and experienced brokers who can crunch the numbers, have established relationships with lenders as well as communication skills to educate the client in simple English in all the Pros and Cons of each of the products.
Understanding Mortgage Basics
A mortgage is a loan you take out from a bank or other lender in order to buy a property. The loan allows the lender to make the purchase without having to pay the entire sale price up front.
How Mortgage Works
When you take out a mortgage, you will need to pay a certain amount of the price of the property, with the remainder covered by the loan. This up-front payment is called the down payment, and in Canada the minimum is around 5% for properties valued up to $500,000. If the price is more than $500,000 you will pay an additional 10% down payment for the value above that (i.e. if the price is $1,000,000 you will pay 5% on the first $500,000 and 10% on the remainder).
What You Need To Know
Two terms you need to understand are the mortgage term and amortization term. The mortgage term is the term of the loan and the interest rate you will be charged is effective up to the end of the term. You may not have paid off the loan completely at the end of the mortgage term and will have to renegotiate the loan to continue making payments.
The amortization period is the length of time it will take to completely pay off the mortgage, based on making regular payments at a given interest rate. A shorter amortization term means you will pay off the mortgage quicker but will have to make higher payments, while a longer-term means smaller payments, although you will be charged a higher interest. The longest allowed amortization period is 25 years.
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Certified Mortgage Broker Hamilton
Frequently Asked Questions About Your Hamilton Mortgage
What is a mortgage?
Almost everyone has a mortgage sometime. A mortgage is a loan agreement made for the purchase of a property where the property is held as collateral by the lender until the capital amount of the loan is fully recovered. Over the term of the mortgage, the mortgage holder retains the right to sell the property should the lender fail to make repayments as agreed in the mortgage agreement.
When repayments are made a portion is used to cover the interest costs and what is left pays off a part of the principal. Thus, the amount owed is reduced over time and the borrower enjoys a bigger and bigger portion of the home equity.
Should I get a pre-approved mortgage?
We usually advise our clients to get a pre-approved mortgage. You have nothing to lose. It costs nothing and takes only a few days. When you get pre-approval, the lender commits to lending you an amount under agreed terms and conditions. Pre-approval has several benefits for the borrower. We’ve listed a few of them below:
- You’ll save time and effort as you’ll know exactly what size mortgage you can afford, so you can consider only the properties that fall within your budget.
- You should have better negotiating power when it comes to discussing the price with the seller as he knows that you have the money available to buy his house.
- You can lock in the interest rates for a period of 60 to 120 days.
What is the difference between an open and closed payment mortgage?
In Canada, there are two basic types of mortgages that you can choose from
- A closed payment mortgage – limits your payment flexibility. These types of mortgages contain limits on how much of the principal you may pay back in any year. Early payment of the principal will result in penalty charges which can be quite substantial. Borrowers who have closed payment mortgages pay lower interest rates.
- An open payment mortgage – allows repayment of the principal at any time during the term of the mortgage. An open mortgage costs more because higher interest rates are applied. But they are a good choice for people who may have a variable income and can pay lump sums into the mortgage as the money becomes available.
Should I choose a fixed or variable interest rate mortgage?
Whether you choose to go with a fixed or variable interest rate mortgage will depend on your personal set of circumstances. Here are the facts
- Fixed interest rates – by far the most popular choice. Fixed interest rates are higher over the longer term, but they offer the borrower stability. This is because the interest rate will remain unchanged for the full term of the mortgage. This makes it easier for homeowners to budget without putting too much strain on their finances.
- Variable interest rates – rise and fall in conjunction with the prime interest rates. In fact, they are often quoted as prime less a discount. Over the longer-term variable interest rates are lower. Borrowers who have a tight budget may find that a rise in the interest rates put pressure on finances. This is why so many borrowers prefer the stability of fixed interest rates.
What size down payment do I need?
The minimum down payment for a property in Canada is 5% and this depends on the size of your mortgage. As the mortgage amount increases, so does the percentage down payment required.
Difficult as it may seem you should aim to put at least 20% of the value of the property into the down payment. If you pay less than 20% your mortgage will be a high ratio mortgage. These mortgages are more expensive as you will have to pay mortgage default insurance. This insurance protects the lender against default. The premium is typically between 2.8% and 5%.
How long will it take to pay off the mortgage?
The amount of time that you take to pay off your mortgage is called the amortization period. Amortization periods range between ten and twenty-five years. The size of your repayments will depend on what amortization period you choose.
A longer amortization period will leave you with smaller monthly payments, but you’ll pay more interest over the period.
Understanding the terms associated with mortgages
- Appraisal – the formal assessment of the value of the property that you plan to buy
- Deposit – the amount of money that you pay to signal your commitment to buying the property. The deposit is held in trust until the transfer goes through and then it becomes part of the down payment.
- Down Payment – expressed as a percentage of the value of the property, the down payment is the amount of money that the buyer must fund himself in the purchase of the property.
- Home Inspection Fee – Prudent buyers ensure that the structural integrity of the home that they plan to buy is good. To do this they must hire the service of a qualified inspector.
- Loan to value ratio – the value of the property relative to the mortgage. The bigger the down payment you make the lower the loan to value ratio. A lower ratio means that there is less risk to the lender so the borrower can negotiate lower interest rates
- Prepayment Option – the option on a closed mortgage that allows you to make specific early payments against the principal amount. Some pre-payment options have penalties. Others do not.
- Property Transfer Tax – when you buy property, you will pay tax when the property is transferred from the current owner to you.
- Mortgage default insurance – is mandatory for Canadians who cannot put down a 20% down payment on the property they buy. It covers the lender against losses if the borrower should default
- Term – the term is the length of time that your mortgage will be in force. At the end of the term, you will have to renew it, pay it off or find a new mortgage provider.
What is a Mortgage Term?
The loan that you make to buy a house or some other property is called a mortgage. The principal refers to the amount borrowed. Each mortgage payment pays off part of the principal plus the interest.
You have custody over the property. However, if you fail to pay the loan and interest according to the terms of the contract, the lender may repossess the property.
What is a Down Payment?
A down payment refers to the money you pay for real estate property. This money is paid upfront and the rest of the cost of your new home is covered by your mortgage. For properties that cost up to $500,000, the minimum down payment in Canada is 5% – however, do take note that your lender may sometimes require a higher down payment.
But what if the cost of the property is more than $500,000? If that is the case then the interest is 5% for the first $500,000 and then 10% for the remainder of the cost.
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