Banks have very strict regulations that don’t work for everyone. Seventy Seven Park has access to a wide range of lenders from your standard banks, to monoline lenders to subprime and private lenders. Seventy Seven Park will find the lender that works for your situation.
A fixed rate will remain the same for the term (6 months – 10 years) of your mortgage. The benefit here, is your monthly mortgage payment will remain the same for the duration of your term and a predetermined amount of principal and interest will be paid.
A variable rate will fluctuate with the market. The benefit of a variable rate is, it is often lower than a fixed rate at origination. However, it is subject to change at any given time. Your monthly payment will remain the same but the amount being paid toward principal and interest will change. With an adjustable rate mortgage, the rate will also fluctuate with the market, but your monthly payment will increase and the principal and interest portion will remain the same.
An insured mortgage protects the lender from mortgage default. All high ratio mortgages, less than 20% down payment, must be insured. A mortgage premium is charged by the insurer on insured mortgages. An insured mortgage has stricter qualifying criteria and must go through two approvals by both the lender and the insurer.
A conventional mortgage is a mortgage with a minimum 20% down payment. A conventional mortgage is approved only by the lender and based on their own rules and regulations, making the process less regimented.
The minimum down payment required to purchase a house is 5% of the purchase price. Keep in mind the less you put down the higher the insurance premium will be charged.
Most lenders will allow you to use gifted funds for your down payment from an immediate family member. The lender will likely require a signed gift letter from the donor to ensure that the funds are indeed a gift and not a loan. Some lenders might require proof of the gifted deposit.
There are a variety of ways to pay your mortgage down quickly, based on the lender you are with. By having an accelerated bi-weekly payment, you will be making an additional 2 payments per year. In addition, most lenders will allow you to make a large lump sum payment on your anniversary date up to a certain percentage of your original principal mortgage.
Some lenders will allow you to increase your monthly payment, up to a certain percentage, with the additional funds going directly towards your principal.
Each mortgage transaction is unique and fees may vary, but for the most part, whether refinancing or purchasing your will have an appraisal fee and legal fees. Depending on your lender, there may also be a lender fee charged.
A lender fee is a fee charged by the lender (bank or financial institution).
A broker fee would be a fee charged by your broker (Seventy Seven Park does not charge broker fees).
An “A” bank will require you to have been discharged from your consumer proposal or bankruptcy for two years and have at least two established tradelines (credit card, a line of credit, auto loan etc.) operating with good repayment history.
There are however alternative lenders that can be used to facilitate a mortgage following your discharge. Some lenders will even payout your consumer proposal with a refinance of your mortgage.
If you are not planning to move or sell your house and want the comfort of knowing exactly what your payment will be for the next 5 – 10 years, then a longer term will likely fit you best.
If you are planning to sell your house in less than 5 years, a shorter term may be more attractive, as you won’t pay such high penalties and may allow you to take advantage of lower rates.
