Home Equity vs. a Loan: How to Choose the Best Option

Posted onMay 24/2017By

For many Canadian homeowners, their home is the biggest investment they will make in their lifetime. There are several options for loans for homeowners, and in this article we’ll look at two options: an equity mortgage versus a mortgage loan. Home Equity Mortgage A home equity mortgage is different than a regular mortgage loan in that it acts more as a line of credit. If you take out an equity mortgage, the bank will agree to lend you a certain amount, but with the equity in your home acting as collateral. An equity loan will usually have lower interest rates than a line of credit, and these rates will usually be variable, fluctuating with the market. An equity mortgage does not require a monthly payment like a traditional mortgage loan does. Rather, it works like a credit card where you will need to make a minimum monthly payment. Taking out…

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Should You Use a Joint Bank Account?

Posted onMay 19/2017By

If you live with your partner, you may be thinking of opening a joint bank account, or you may already have one. There are many benefits to sharing a bank account with your partner or spouse, including: Simplicity: Sharing a bank account can make monthly payments more straightforward and financial planning easier. If you both put the same amount of money in, for instance, 30% of your salaries per month, this can make household finances easier and fairer, and prevent arguments about money. Saving: If you have money left over after monthly payments, you could also create a savings account and use the money towards future expenses, or something nice for the both of you like a vacation. Growth: Since you are both putting money in the joint account, it is likely to grow more quickly than your individual bank accounts. Low mortgage rates: For mortgage loans, interest rates will…

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How Mortgage Rates Are Determined in Canada

Posted onMay 08/2017By

For many Canadians, their home is the biggest investment they will ever make, and their mortgage the most significant loan. When shopping for a mortgage, people generally look for ways to get low mortgage rates. A mortgage rate doesn’t refer to the size of the mortgage loan, but rather the interest rate on your mortgage. Obviously before you buy, you’ll want to search for a low mortgage rate. There are many factors that affect mortgage rates in Canada, and a fuller understanding of these factors can be an immense help to the inexperienced buyer when applying for a mortgage. In this article, we’ll look at a basic outline of how mortgage rates are determined in Canada, including some ways to get a low mortgage rate. Fixed vs. Variable Rate Mortgages There are two kinds of mortgage loans available to Canadians: fixed or variable rate mortgages. A fixed rate mortgage, as…

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Can You Roll Closing Costs into a Mortgage?

Posted onMay 02/2017By

There are many costs associated with buying property, in addition to the down payment and your mortgage loan. Any fees that go over the price of the property itself are called closing costs and include fees such as appraisal fees, title insurance, credit report fees, legal fees, and loan origination fees. Closing costs are incurred once the seller transfers the property to the buyer. Closing costs usually end up being about 2-5% of the price of the property. An example of a common closing cost would be a loan origination fee. This is usually charged by the bank upon creation of the loan, and often comes to about 1% of the mortgage. Another example of a closing cost would be title insurance, which protects the lender and the buyer from any past contractors making claims against the property. Obviously this is incredibly important if you want to avoid any complications…

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