Calgary Mortgage Centre

There are many things to consider while you are preparing to buy your home, here are a few things you should consider:

• Don't hesitate to ask why the seller is selling. At the same time, you don't want the sellers  to know what your time deadline is or what your motivation is to buy...they may try to take advantage of your weakness.
• You may want to go through a broker to qualify - look at the pros and cons and determine if this is what you want to do.
• What type of mortgage best suits you and your families needs? Do you want to pay weekly, bi-weekly, or monthly? Calculate your mortgage payments.What is the current mortgage interest? Is this your first home?

Mortgage Rates 

 Types

• CONVENTIONAL: A borrower has a minimum of 20 per cent down payment on the purchase of a home, or leaves at least 20 per cent of the home’s available equity when refinancing a mortgage. Under traditional conventional mortgage guidelines, a mortgage does not exceed 80 per cent of the home’s value.
• INSURED OR HIGH-RATIO: Allows a borrower a minimum of 5 per cent down payment when purchasing a home, or that the borrower leaves 5 per cent equity in a home when refinancing. Under traditional insured/high-ratio guidelines, a mortgage does not exceed 95 per cent of the home’s value.
• ZERO DOWN PAYMENT: The true “zero down payment” mortgage is no longer available as per the Canadian government legislation, however a “no money down” mortgage is obtainable via a “cash-back” or “flex-down” program through the lender’s insurer (i.e. CMHC, Genworth and AIG). Program allowances are O.A.C.

 Options

• OPEN MORTGAGE: Allows a borrower to make a lump-sum payment on the mortgage at any time without being subject to a pre-payment penalty. Typical open mortgages accompany higher interest rates than closed mortgages, however the open mortgage is ideal for those who wish to pay off a mortgage in a short amount of time or switch from a short-term mortgage (with higher interest rates) to a longer-term mortgage (with a lower interest rate).
• CLOSED MORTGAGE: Ideal for the borrower who wants the security of knowing what their monthly payments are going to be from month to month or week to week. Prepayment options usually accompany a closed mortgage, allowing the borrower to pay an allotted percentage of their mortgage back throughout the month and/or year. Maximum flexibility of repayment (like the open mortgage described above) is not available on a closed mortgage.
• VARIABLE MORTGAGE: Variable rates are not as secure in set payments are from month to month, as opposed to a closed mortgage. The attraction to the variable rate is that these mortgages work off of the prime rate of Canada. Your “floating” rate is typically lower than the closed-mortgage rates, however your rate fluctuates with the prime rate of Canada.

As seen in Calgary Resale Home & Condo Guide November 2012.

Contact Your Calgary Mortgage Specialist 

Return to Home Page - Calgary Real Estate