If you're like most Markham Home Buyers, a home is the most expensive purchase you'll ever make, and you'll probably need some form of financing.

There are many lending institutions that offer a variety of mortgage products. Financing options and rates can vary widely, so it is important to do your research and shop around to ensure you get the mortgage that best meets your needs at the best price.  Take a look at this compiled list of Mortgage Rates to compare rates from major lending institutions.  I am also happy to give you a breakdown on what mortgage will work best to help you to save the most money on your interest payments and require a reasonable monthly mortgage payment that you can afford.

Tell Me About Getting A Pre-Approved Mortgage?

This means that a mortgage lender has made a committment to loan you "x" amount of funds to put towards the purchase of your home.  You are now able to search for the home of your dreams and confidently make an offer to buy the home that you fall in love with. 

Find Out Your Credit Report

It is important to be as prepared as possible when you are applying for pre-approval.  Your credit report score will be an important factor in the decision making process of getting an approval.  Check your credit report online at:

www.equifax.ca

www.transunion.ca 

Down Payment

A downpayment can come from:

• your savings
• your RRSP savings through the Home Buyer's Plan which is a Government Program
• gifted money from a family member

The amount of down payment you can put towards the purchase of your home will determine a few things:

• you will have more equity in your home
• you will pay significantly less interest on your mortgage by the end of your amortization period
• you can apply for a conventional mortgage with a downpayment of 20% or more of the value of your home.  This type of mortgage has the lowest carrying cost as you do not have to insure your mortgage
• a downpayment of less than 20% will require a mortgage default insurance to protect the lender, which means that you will have to pay a premium either upfront or incorporated into your mortgage payments  

Types Of Mortgages

Closed

A closed mortgage usually remains unchanged for the term of your mortgage. Prepayment costs will apply if you payout, renegotiate, or refinance before the end of term.

Benefits

• Lower rates than open or convertible mortgages.
• Can make annual prepayment of up to 10-15% of your original mortgage amount.

Open

An open mortgage can be repaid fully or in part during the term of the mortage without any prepayment costs.

Benefits

• Flexible until you are ready to lock into a closed term.
• Can pay off any or all of the mortgage without prepayment costs.

Convertible

A convertible mortgage offers the same security as a closed mortgage and can be converted to an extended closed mortgage at any time without prepayment costs. Usually associated with fixed rate mortgages.

Benefits

• Provides security and flexibility by allowing you to convert into a longer closed term mortgage without prepayment costs, if you think rates will rise.
• Can make an annual prepayment of up to 10% of your original mortgage amount.

Types Of Rates

Fixed

The interest rate does not change during the term of your mortgage.

Benefits

• Same interest rate for the entire term with a regular payment that stays the same.
• You will know exactly how much your payments are and how much of your mortgage will be paid off at the end of your term.

Variable

The interest rate will fluctuate during the mortgage term according to the current market prime rate.

Benefits

• Variable rates have been lower than fixed rates historically.
• If rates go down, a larger portion of your payment goes towards principal, helping you pay off your mortgage faster.
• Payments stays the same even if rates change.

How Much Do I Qualify For?

These bank links each have mortgage calculators that will help you to determine how much money you qualify to borrow.

For comparisons sake, take a look at a few of the banks listed below (they are also listed on the left hand side). 

You can find out how much you can afford to borrow according to each bank. 

You can also compare the amount of interest you will be paying for the principal amount you are qualified to borrow.  Please note that each bank varies greatly and just because the mortgage rate is lower, this does not mean that you will be paying less interest.  Do your math.  I will also be very happy to assist you in comparing your lender options.

By all means take a look at other lenders not listed below as well by visiting their websites.

Bank of Montreal

CIBC Mortgage Information

ING Direct

National Bank of Canada

Royal Bank of Canada Mortgage Information

Scotia Bank Mortgage Informations

TD CanadaTrust Mortgage Information

MonsterMortgage

Lending Max

HSBC Bank

President's Choice-PC Financial

If you still need more information and would like to meet with a mortgage broker, I will be happy to refer you to some very good mortgage contacts I have in Toronto, or to help you in any other way I can to secure the best possible rate for your home purchase.

You will also find many useful links including Canadian Government Programs On Mortgages and information on how to save your money when buying a home.