Plus visit us at www.enrightandmolleson.com

Their are four main types of mortgages offered by lenders in Canada.  They are referred to as closed, open, fixed and variable rate.  Many lenders offer products that can be combined with the mortgage type, so ask questions when you meet with them!

Here is an overview on the above mentioned types of mortgages:

Closed Mortgage

Within a closed mortgage, the payments remain unchanged for the duration of the load period (term).  This format provides stability but penalizes a borrower who wants to terminate the mortgage early.   Typically there are set terms for the loan, usually ranging from a term of 6 months up to even twenty years.  The norm is to secure a term of five years as this provides a locked in rate for a good number of years but allows you to change your mortgage after five years.

Open Mortgage

This form of a mortgage allows the flexibility of pre-payment of the mortgage which is in contrast to the closed mortgage format.

Variable Rate Mortgage

In a variable rate mortgage, the interest rates can change during the term.  The advantage of this format is that the borrow may take advantage of lower interest rates than in a fixed rate mortgage.  On the downside, this mortgage exposes the borrower to change, which could mean the interest rate could go up or down thus affecting the monthly payments.

Fixed Rate Mortgage

Here you have a mortgage that has a constant interest rate throughout the term of the loan, even if the rates rise in the marketplace.  On the flip side, if rates go down in the marketplace, the borrower is locked into the fixed rate until their term is up.  The desireable element of this form of a mortgage relates to the stability of the payments for the borrower.

There are a number of variations of the type of mortgages available in the marketplace.  To explore these more, I would encourage you to visit with a lender, be it a bank or a mortgage broker, to discuss what would be best suited to you & your lifestyle.  If you need a recomendation on where to start, please give me a call or email me. 

Upon pre-approval with a lender, let’s get started on finding you a new house or condo!

The cost of buying, owning and selling a home to go up by 8%!

Earlier this week, the Government of Ontario formally launched its latest assault on homeowners, purchasers and sellers with the introduction of legislation to harmonize the provincial sales tax and goods and services tax. Homebuyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario. For homeowners the HST will also add hundreds of dollars in additional tax on utility bills (gas, electricity and home heating fuel), on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal.

Please help Ontario REALTORS® fight this tax. In less than 30 seconds you can send an email to your MPP asking them to vote against sales tax harmonization legislation, by clicking here: http://bit.ly/stopthehst

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe.  If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer’s oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit —  loans, credit cards, and a mortgage, for example.

You credit score is used to help determine the amount of money a lender will lend you for the purchase for your new home. A better credit score means that you’ll appear the more favourable, or less risky, to the lender.  Keep your credit score in mind if you are planning on buying a home in the near future.  it’s never to early to start building good credit!

Reprinted. For more on evaluating and understanding your credit score, visit www.myfico.com/CreditEducation

Beauty is in the eye of the beholder, particularly when it comes to buying a home.  Features that attract one home-buyer may repel another.

However, the one feature of interest to every home-buyer is price.  Getting the most home for your money is paramount.  The real problem however, is figuring out what type of property you really want?

The first step is figuring out what kind of house you need.  A good buy is only a good buy if it meets your current and future living requirements.  Before shopping for a home, decide how much space you and your family require.  How many bedrooms, bathrooms?  Is a family room necessary?  Do you need a layout that will accommodate a lot of entertaining?  Do you prefer a spacious or compact work space in the kitchen?  If you have small children, can the house easily be childproofed?

Evaluate the front and back yards.  Is there enough space to accommodate your children? Do you enjoy yard work and gardening, or do you want a low-maintenance yard?  Take into consideration the cost of extensive landscaping and upkeep.

Next, determine how much work is required to make the house you are considering livable.  Make an honest assessment of your fix-it abilities.  How much work are you willing to do or pay someone else to do?  Do you have basic decorating, carpentry and plumbing skills?  If you plan to learn as you go, make sure you have accurately determined what you are getting into.

Unless you are ready and able to tackle a major remodel, look for a house or condominium that needs only cosmetic improvements.  These include painting, wallpapering and replacing items like flooring, window treatments, bathroom and kitchen fixtures, light fixtures, cabinet and interior door hardware and appliances.  Remember that even these simple changes can be costly if you have to make many of them.

Beware of improvements that seem easy enough at first glance buy may turn into major headaches and require a lot of money once you’ve moved in, such as a Kitchen remodel.

The above is just a small reason why picking the right agent can make the home buying process a lot easier.  Let’s work together to help you buy a new home.