Guidelines On Canadian Mortgages

2007-03-08 10:33:40

( Financial )



All individuals including people who do not reside in Canada can avail of Canadian mortgages. Individuals interested in lodging an application for Canadian mortgages must take note of the following:

Canadian mortgages are categorized as full status loans. This means that lenders are required to do a thorough check of an applicant’s salary and credit history.

A deposit equal to a certain percentage of the purchase price of the property must be paid. In addition to this, the borrower must pay for all legal expenses involved in the acquisition and purchase of the property. Majority of lenders also require you to purchase life insurance prior to being given a mortgage loan.

Canadian mortgages must be settled in full after a certain number of years, and before the borrower reaches a certain age. Repayments for Canadian mortgages are not paid to the lender directly: it is paid to a solicitor who draws up the purchase contract.

Lenders consider a number of factors to determine the amount of mortgage loan to be given and the person’s eligibility:

Lenders will inspect the property you are interested in purchasing, and make an appraisal of its value. An appraisal is performed in order to ensure that the purchase price is reasonable. Any fees that are associated with this procedure will be paid by the borrower.

Your financial ability to repay a Canadian mortgage is based on your employment income and not a future property rental income. For self employed people net income for the last few years will be considered. A maximum percentage of the individual’s gross earnings should cover all debts including the monthly payment of your mortgage. This percentage will be disclosed by your lender when you lodge your application. Existing rental income and other income obtained through investments can be taken into account as well.

Above are only some guidelines for Canadian mortgages. Canadian discount brokers or Canadian online brokers can provide more information on Canadian mortgages and Canadian mortgage rates.


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