Mortgage Information

Our Mortgage Specialist, Hildegard O'Connell, can assist you to arrange the financing of your home at your convenience. Her experience will help you find the best solutions to fit your needs. She is a mortgage professional with over 15 years experience and can help you achieve your dream home.
 

To contact Hildegard, click here: http://mdm.scotiabank.com/hoconnell

You can use these handy calculators to help you if you are thinking of buying a home or transferring or refinancing your existing mortgage:

• Figure out how much you can afford to spend on a home

• Determine what your mortgage payments will be

• Compare different ways of paying your mortgage off faster

• Add lump sum or top-up payments to your mortgage calculation

• See your amortization schedule (which provides a breakdown of principal and interest payments for the life of the mortgage)

What is a pre-approved mortgage?
It's a written commitment from a lender that you will get a mortgage for a set amount interest rate, locked in for 60-120 days, depending on the lender. The commitment is subject to a financial assessment and property appraisal. This service is always free and without obligation.

Why do it?
A pre-approved mortgage gives you an edge. Before you even start house hunting, you'll know how much you can afford, your interest rate, and your monthly payments. With your financing already mapped out, you can concentrate on finding the right home in your price range.
A pre-approved mortgage shows you're a serious buyer. In a situation where several people are bidding on the home you want, you may decide to offer the list price and beat our earlier offers.
When your offer is accepted on the home of your choice
You're in the home stretch, finalizing the details of your mortgage and closing the purchase of your new home. Now you need to call your mortgage specialist and send them the following information:

• A copy of the real estate listing
• A copy of the accepted Offer to Purchase
• Information on the source of your down payment
• Income verification if you are employed
• A letter from your employer verifying your place of employment and income, or T4s and Notice of Assessment, or T1 General Tax Return and Notice of Assessment
• Income verification if you are self-employed
• 3 years of Financial Statements and 3 years of Notice of Assessments, or 3 years of T1 General Tax Returns and 3 years of Notice of Assessments

Processing the mortgage application
Your mortgage specialist will want to verify the value of the property you are buying, your current financial picture and your credit history, so a property appraisal and credit report will be ordered.
If your down payment is less than 20% your mortgage is considered "high ratio" and you must pay insurance premiums. You decide whether you want to pay the premium in cash or have your lender add it to your mortgage amount. Your mortgage representative can contact Canada Mortgage and Housing Corporation (CMHC) or GE Capital Mortgage Insurance Company Of Canada (GEMI) to make the arrangements.
Be prepared to pay fees for the mortgage application, credit report and property appraisal.

Closing the purchase
Closing day is the day you become the official owner of your home. However, the closing process usually takes a few days.
Typically, you visit your lawyer's office to review and sign documents relating to the mortgage, the property you are buying, the ownership of the property and the conditions of the purchase. Your lawyer will also ask you to bring a certified cheque to cover the closing costs and any other outstanding costs.
Once your mortgage and the deed for the property are officially recorded, you become the official owner of the property.

Mortgage Terms Explained
Mystified by all the financial jargon used to describe mortgages? Here's a quick overview of key terms to help you understand the language--and make the process clearer and easier.
Mortgage:
A personal loan used to purchase a property. You pledge the property being purchased as security for the loan.
Down Payment:
The portion of the purchase price that you pay initially as a lump sum; the rest is financed by your financial institution. A down payment is generally up to 20% of the purchase price.
Principal:
The amount of your loan.
Interest:
This is added to the amount you have borrowed to compensate the lender for the use of their money. Your mortgage is repaid in regular payments which are applied toward the principal and interest.
Term:
The number of months or years the mortgage contract covers (typically six months to five years), during which you pay a specified interest rate.
Amortization:
The number of years it will take to repay the mortgage in full. (This is usually longer than the term of the mortgage). For instance you may have a five-year term amortized over 25 years.
Equity:
The difference between the value of your property and the amount you still owe on the mortgage.
Conventional Mortgage:
Offered to buyers who make a down payment of 20% or more of the appraised value of the purchase price.
High Ratio Mortgage:
Offered to buyers with a down payment of less than 20%. This type of loan must be insured against default by the federal government through the Canada Mortgage and Housing Corporation (CMHC) or an approved private insurer (the lender usually arranges this). The borrower pays a one-time insurance premium to the insurer (ranging from 0.5% to 3.75% depending on the size of the loan and value of the home; additional charges may also apply). The premium is usually added to the principal amount of the mortgage. If you default on your mortgage, the lender is paid by the insurer.
Fixed Rate Mortgage:
Carries a set interest rate for a specified period of time (the term of the mortgage). The regular payment of the principal and interest remains the same throughout the term. The benefit of choosing this option is that you are protected if interest rates rise.
Open Mortgage:
Gives you the flexibility to make unlimited pre-payments or lock into a fixed term at any time. This loan's interest rate changes periodically, and is tied to the prime rate. This type of mortgage is popular when interest rates are expected to fall or remain stable.
Portability:
If you are selling your home and buying another, this option allow you to take your mortgage - with the same term, rate and amount - and apply it to your new house. If your mortgage isn't portable, don't sign for a longer term than you're likely to stay in the house or you could wind up paying a penalty to break the mortgage agreement.
Assumability:
This feature allows the buyer of your house to take over or "assume" your mortgage. If your mortgage has a fixed interest rate lower than current rates, it could be an attractive selling feature.