Q.1. How much of a mortgage can I afford?

The size of the mortgage you can assume depends upon your finances. According to CMHC, your monthly housing costs should not be more than 32% of your gross monthly income. In addition, your entire monthly debt load should not exceed 40% of your gross monthly income. A mortgage calculator will help you in determining these amounts.

Q.2. How do I get pre-approved for a mortgage?

Getting pre-approved for a mortgage requires making arrangements with a financial institution who will issue a pre-approved mortgage certificate. You must still meet your lender during the conditional offer period to get final approval and make necessary arrangements.

Q.3. What are the things I need to know when taking out a mortgage?

There are number of different terms which need to be clarified when assuming a mortgage. These include such things as: fixed, variable or adjustable interest rates; open vs. closed mortgage; term and amortization; payment schedule.

Q.4. What is the advantage of paying off a mortgage early?

By paying off the mortgage more quickly you save a considerable amount of money in interest costs. Examples of interest costs give examples of just how much money can be saved.

Q.5. How can I pay off a mortgage early?

There are a few strategies that allow you to pay off your mortgage sooner but you must be sure that the terms of your mortgage allow it. These include such things as: making more mortgage payments; rounding up your mortgage payments; using tax return or bonus money towards mortgage; making anniversary payments; refinancing when appropriate. These strategies will save you considerable money.

Q.6. What is a reverse mortgage?

A reverse mortgage is a loan for homeowners 60 or older that uses home equity, that is the portion of the home’s value that is debt-free, as security. You make no payments on this loan. The interest accumulates and your equity diminishes. If you sell your house you must repay the loan and accumulated interest. There are a number of things to know before entering into a reverse mortgage.