Dar Fouladi

Sales Representative

Right At Home Realty Inc.

Direct: 416-566-4601
Office: 416-391-3232
Fax: 416-391-0319
Email: dar@darfouladi.com

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Frequently Asked Questions - Mortgage

FAQs - Mortgage

Whenever you need a Canadian mortgage loan that is greater than 80% LTV (loan to value) it is considered a high ratio or insured mortgage.  If you are a first time home buyer then you can borrow up to 95% LTV and only need to come up with a 5% minimum down payment.  The Canada Mortgage and Housing Corporation (CMHC) insures the lender in case you default on our loan.  You must pay for this insurance premium, up front or you can add it to the mortgage.

While over 60 percent of Canadians opted for a fixed mortgage rate in 2011, variable rates tend to be cheaper over time. Conversely, you may sleep better knowing you’re not subject to interest rate fluctuations. Making the right choice depends largely on the current rates at the time you’re taking out your mortgage. When interest rates are low and aren’t expected to drop further, locking into a fixed rate may be your best option. However, if experts are projecting that interest rates may fall, you’re probably better off with a variable rate, especially if there’s a significant difference between the fixed and variable rates.

Mortgage brokers provide their services for free to borrowers.
Since mortgage brokers are only paid when a loan is approved and signed, their assistance will cost you nothing.
Mortgage brokers help those with less-than-perfect finances secure a loan.

For those with blemishes on their credit report or a low household income, a broker might be able to negotiate better rates than if you approached the lending institutions yourself.

Mortgage brokers will save you time.

Mortgage brokers will do all of the legwork for you in terms of paperwork and negotiating with lenders. They will also be your point of contact for everything related to your financing.

Your mortgage can be used as a key financial planning tool to accelerate your savings, create future equity and build your investment portfolio.

If so, and rates rise, more of your payment goes to interest. If rates fall, less of your payment goes to interest. Note that most fixed payment variable mortgages have "trigger rates." If prime rate increases so much that it exceeds the trigger rate, the lender will boost your "fixed payment."

Be sure you can afford your mortgage if rates jump 2 to 3 per cent.

Proper term selection saves you way more than small rate differences, almost every time. Find an adviser that does more than glibly quote industry research or ask if you can "sleep at night" with a variable rate. At a minimum, your adviser should compare the estimated interest cost of various terms, given sample rate increases over the next five years.

This is useful if rates drop and you want to blend your rate with the new lower rate (which lowers your payment). It's also key if you're past the middle of your term and you want to mitigate the risk of higher rates at renewal. Beware of lenders that let you "blend and extend" but then bake a prepayment charge into your new mortgage rate.

Just because a lender approves you doesn't mean you can safely afford the payments. Moreover, alternative down payment options may not be worth the trade-offs.

A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The results of the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection. A pre-purchase home inspection can add peace of mind and make a difficult decision much easier. It may indicate that the home needs major structural repairs which can be factored into your buying decision. A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.


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