Why MPP Mortgage Insurance?

Mortgage Tips Kristina Crosbie 27 Feb

At Dominion Lending Centres we recommend the Maulife Mortgage Protection Plan (MPP) Insurance for home buyers. Here are 10 reasons why MPP is the best for our clients.

We say YES!
Manulife Mortgage Protection Plan (MPP) Insurance offers immediate protection when you submit a life insurance application, regardless of your health. As long as you are between the ages of 18 and 65, and your monthly mortgage payment is less than $10,000, you will not be declined. Even if you don’t qualify for full life and/or disability coverage you will still receive accidental death and/or accidental disability insurance at a reduced premium.

And we say YES right away
You can walk out of your broker’s office with the knowledge that you are already protected. You just have to pay the first premium when it is due.

Your Health Matters
Saying “yes” to everyone doesn’t mean that we don’t take your health into account. Everyone must provide medical information with their application. If you have some health problems, you may pay a little more, or your coverage may include some extra exclusions.

Your premium doesn’t change
Our premium rates are very competitive when compared to other mortgage insurance offers, and do not increase with your age or changing health conditions.

Satisfaction guaranteed, or your money back
Take up to 60 days to review your policy and if you’re not completely satisfied, simply cancel within those 60 days and we will refund any premiums you’ve already paid. The 60 days starts from the time the insurer receives your completed application and premium payment information.

Disability coverage that’s better than ever
Our total disability protection is still one of the most affordable choices. The benefit amount automatically adjusts when your interest rate changes at no extra cost. In addition, these benefits do not have to be reported as income to either CPP or your private disability insurer, and are not subject to income taxes.

We care about your health, not your occupation
Unlike conventional disability insurance, we don’t look at your job or your income when you apply, only at your health. Self-employed individuals, seasonal and part-time workers are all fully eligible if they meet the other eligibility requirements for this product. We also don’t require you to buy life insurance. You can buy disability protection on its own.

Portable coverage with prior coverage recognition
You can transfer your mortgage whenever and wherever you like, without fear of losing your protection. Even if additional mortgage funds are advanced, only the premium for your additional coverage will be based on your then current age. The amount of coverage you already had will remain untouched, and can’t be taken away no matter what your health situation may be at that time.

We will “bridge” the gap during your claim process.
With our Bridge Benefit, we will start making your mortgage payments as soon as we get your completed life insurance claim form, and will continue to do so for as long as it takes to reach a final decision about the claim.

MPP is underwritten by The Manufacturers Life Insurance Company
A trusted name and industry leader.

Top Affordable Travel Destinations for Canadians in 2020

General Kristina Crosbie 25 Feb

Trying to escape the blistering cold winter is an unofficial Canadian sport. We all need a break from the wind-chill, and with March just around the corner it may still be cold for a while yet. So where are the best places for Canadians to travel? Where is still affordable?

Sure you can find insanely cheap flights to exotic places like Bermuda or the Turks and Caicos Islands, but even the cheapest hotels there can easily run you $400+ a night, not to mention absurdly priced food.

So much of the travel advice out there is tailor made for Americans and their US dollar… until now! It’s our turn! 🇨🇦
If you just want to take a vacation without emptying your bank account and without enduring 36 hours in airports, we’ve got you covered. We’ve found the top affordable places for Canadians to travel in 2020 so you can have a dream getaway this year.

1. Mazatlán, Mexico
Mazatlán is only a 4.5 hour direct flight from many Canadian airports, has perfect weather in winter (less humid and cooler nights) and has beautiful sunny beaches.

2. Myrtle Beach, USA
Take a ride on the sky wheel, stroll down the boardwalk or hit up the wax museum. There are tons of attractions like Ripley’s, a hands on science exhibit and even a live alligator show. Myrtle Beach is also home to the most lazy rivers in the US, so spend some time floating the day away.

3. Curacao
Curacao is a tiny Dutch island in the Caribbean that should be on every Canadians list. Turquoise water, white sandy beaches and beautiful weather.
Curacao has an incredibly diverse history because its been ruled at different times by many empires. You’ll fall in love with the mixture of cultures, each lending inspiration in the local foods, languages and flavors.

4. Cartagena, Colombia
each lovers can take a stroll down Bocagrande in search of fresh ceviche, or enjoy the Caribbean breeze under an umbrella. History buffs can tour castle ruins, old cathedrals, or the local gold museum. You’ll really immerse yourself in the 4 C’s here, being: culture, colours, castles and cafes.

5. Merida, Mexico
Walk down it’s pastel colored streets, have a cafe outside a grand cathedral, and head to the plaza to salsa dance the evening away. No, Merida isn’t a beach destination, but with so much to do, you won’t even notice! Merida is the perfect jumping off point for exploring the diverse beauty of the Yucatan peninsula. Within a 2 hour drive you can visit over a dozen ancient Mayan ruins, underground caves and cenotes and cultural attractions.

6. Las Vegas, USA
Love it or hate it, Vegas is one of the cheapest and fastest getaways for Canadians. In the fall, when the snow starts coming down, you can easily escape to 25+ temps in under 3 hours.
The hotels are insanely cheap because they’re really hoping you’ll use your savings at the casino. If you can limit your gambling, you’ll come out a winner with those rock bottom accommodation prices.

7. Liberia, Costa Rica
Flying into Liberia is your gateway to vacationing in lush jungle or beautiful sandy beaches. Explore the culture of the small city for a few days and then head out to the sandy coast, only a 30 minute drive from town. Tamarindo, Samara, Playas Del Coco, Playa Conchal and Playa Flamingo are some of the most popular beach towns in Costa Rica that are perfect for a warm getaway.

8. Havana, Cuba
Havana is an incredible budget pick for Canadians looking for a memorable vacation. Walking through centro will have you feeling like you’ve just stepped onto a movie set! Colorful classic cars drive down colonials streets while intoxicating Latin music starts up on every corner. It’s truly a magical place! If you want to escape the bustling city there are even beautiful beaches just 20km out of town.

9. Orlando, USA

While Orlando might not have the cheapest hotels on the planet, it’s an incredibly easy destination for Canadians. You can fly direct to Orlando from 5 Canadian airports, with additional cities rumored to be added soon, making it super convenient. There are countless things to do in Orlando (hello Disney and Universal Studios!).

Read the full article by Kashlee Kucheran here.

Types of Mortgages in Canada

Mortgage Tips Kristina Crosbie 20 Feb

Before deciding the types of mortgages that may be right for you, you’ll have to make another important decision – the type of lender you’d like to work with.

In Canada, there are three main types of lenders: A lenders (banks, credit unions and monoline lenders), alternative lenders, and private lenders. The A lenders (big banks) control the lion’s share of this market, but that doesn’t mean there aren’t other options out there.

Credit unions and monoline lenders are also worth considering. You may be able to find a mortgage product better suited to your needs at a lower interest rate with lower mortgage penalties. You won’t know unless you take the time to explore these options with a mortgage broker.

Now that you have a basic understanding of lenders, let’s take a look at the types of mortgages in Canada and how they apply to you.

Institutional mortgages

Conventional Mortgages: These are the types of mortgages where you’re making a minimum down payment of 20 percent. The loan-to-value would most likely be 80 percent or less, since the lender is financing the remainder of the home purchase. You are not required to purchase mortgage default insurance in this case, although your lender will likely require that you buy home insurance as a condition of the mortgage.

High Ratio Mortgages: When you have a down payment of less than 20 percent, then your mortgage is considered high ratio. In this case, the property’s loan-to-value would most likely be over 80 percent. As such, you’re required to get mortgage default insurance. Contrary to popular belief, mortgage default insurance doesn’t protect you. It protects your lender in the event that you default (fail to repay) your mortgage. Mortgage default insurance is typically rolled into your mortgage and paid along with your regular mortgage payments.

Open/Closed Mortgages: An open mortgage is where you can pay off the mortgage in full at any time without facing a penalty. A closed mortgage, on the other hand, is a mortgage where you’re restricted by the amount you’re able to pay towards the mortgage. Open mortgages typically come with higher mortgage rates than closed mortgages. That being said, closed mortgages usually come with some prepayment privileges, such as increasing your payment and making lump sum payments.

Fixed Rate Mortgages: With a fixed mortgage, your mortgage rate remains the same during your mortgage term. Mortgage terms commonly vary in length from one to five years. Five-year fixed rate mortgages are popular among Canadians because your mortgage rate is guaranteed to remain the same for five years. The rates on fixed rate mortgages are based on the government of Canada bond yields of similar terms.

Variable Rate Mortgages (VRM): With a variable rate mortgage, your mortgage rate can vary (change) during the mortgage term. This happens when your lender changes its prime rate (this likely occurs when the Bank of Canada changes its overnight lending rate). The rate on variable rate mortgages is typically lower than a fixed rate, although it’s important to be aware that your rate can go up during your term. Although there’s the potential to save money, it’s not for the risk averse.

Portable Mortgage: Portability is a common mortgage feature of most institutional mortgages. With a portable mortgage, you can transfer it from one property to another without facing a penalty or requalifying. Not every lender offers this and there are specific terms and conditions that you must follow, so make sure you understand before signing on the dotted line.

HELOCs: As the name alludes, a home equity line of credit (HELOC) lets you borrow equity from your home. Although you can use the funds as you see fit, common uses include debt consolidation and home renovations. You can borrow up to 65 percent of the value of your home as a HELOC (provided your HELOC and mortgage don’t exceed 80 percent of your home’s value).

Cash Back Mortgage: These are types of mortgages whereby you receive cash up front. These funds can be used towards anything except your down payment (i.e. moving expenses, furniture, etc.). The interest rate tends to be higher on this type of mortgage. You’ll also be required to pay back the cash on a prorated basis if you break your mortgage during the term.

Renovation Loan: Many of the above lending products can be packaged as a renovation loan, where funds are used to increase the value of a home through additions. These can include new windows, decks, basements, remodeling, driveway extensions, and more.

Alternative mortgages

Reverse Mortgage: These are types of mortgages where homeowners who are 55 years old or older can borrow against the equity in their home, receiving it as a lump sum or monthly payment. A reverse mortgage usually makes the most sense for seniors on a fixed income who otherwise don’t qualify for a HELOC. When the property is sold or the homeowner passes away, the amount for the reverse mortgage is payable to the lender.

Private mortgages

Bridge Mortgage: A bridge mortgage (or bridge financing as it’s commonly known) is a temporary loan when you sell your current home and buy a new one. Bridge financing is needed when your closing dates don’t match up (i.e. the closing date on your new home is sooner than your current home).

Second Mortgage: A second mortgage refers to a property with at least two mortgages. As the name alludes, a second mortgage comes after your initial (first) mortgage and typically has a higher interest rate. A first mortgage simply implies that there is only one loan secured against your property such as a conventional or high ratio mortgage noted above.

Commercial and construction lenders

Commercial Lenders: A commercial lender is a lender who offers commercial mortgages secured by a commercial property, such as an office building, apartment building or shopping centre. The mortgages funds are typically used to acquire or redevelop a commercial property.

Construction Lenders: A construction lender is a lender who offers mortgage financing that can be used towards the construction of a real estate development. This is the financing that can help get shovels into the ground on a new development.

As you can see, there are a number of different types of mortgages that may apply to your particular financial situation. This is why it’s important to work with a mortgage professional to help you navigate the various mortgage types.

Whether you are applying for a brand new mortgage, refinancing, or need some quick cash with a second mortgage, there are various types of mortgage products that can help you achieve your goals. Before automatically jumping to one of the big Canadian banks, consider your options with alternative lenders.

They may have exactly what you are looking for—at better terms and lower rates!

Read the full post here.

Benefits of Leasing Your Land

General Kristina Crosbie 18 Feb

You own land that spans far and wide with thick green forests that surrounds the interior pasture. You try to spend as much time as possible on the land, but life gets in the way and you’re lucky to get a weekend a month there, if that.

At this point in your life, have you considered leasing the farm for hunting or farming rights? What about both? The benefits of leasing your land can help increase its value by guaranteeing that someone, especially the farmer, will maintain it all while adding a little extra income to your pockets.

Leasing Your Land for Hunting
Leasing your land for hunting is a good idea if your land offers the amenities hunters desire. This decision should be made after careful consideration of the tradeoffs. Opening your land property to strangers has its ups and downs. It’s important to draft a lease for your hunters to sign that’s very clear on terms and conditions. Interview the prospective people to make sure they fall in line with your attitude towards hunting and conservation.

Income Benefits
The obvious benefit is the extra income that fills your wallet. Property taxes are only continuing to rise and the money from having your land leased can help pay them and any yearly management fees.

Animal Management
Do you have issues with coyotes preying on your wildlife or deer eating your crops? Hunting is the most effective way to control wild animal populations as fencing can become costly. Most predator and deer hunters will be happy to pay the fee to help you out on your farm.

Leasing Your Land for Farming
Most crop prices are steady right now and land is a commodity that won’t go out of style any time soon. There could be many reasons you would want to lease farmland, such as allowing someone to raise their sheep or plant their own gardens. A farming lease can be a tad more lucrative than the aforementioned hunter’s rent.

Get Paid By Letting Someone Else Grow
That’s right, you get paid money by letting someone else grow corn, cotton, soybeans, whatever they want. If there’s hay, the farmer can cut for quarters, meaning he’ll pay you seventy-five cents on the dollar for what the final count of bales would be worth, or what they’d sell for. If he doesn’t want to sell, he’s getting hay at a discounted price. It doesn’t sound much better than that.

Leasing Contract and Asking Prices
The most important aspect of leasing your land is drafting a leasing contract. This will prevent misunderstandings and potential lawsuits. What goes in the contract is up to you and what you want out of it. This can include how much time you want them to spend on your land and what the boundaries are if there are any. If you want to limit the time spent on your land, you can lease it out only during hunting seasons or on weekends.

There are many ways to find out how much you should lease your land for. There are online tools that will tell you exactly how much your land is worth per acre. Some also provide valuation, soil survey and crop history reports for individual fields of farmland. If one of your neighbors have rented their property before, go ask them what they charged people. Ask to walk their property and see how it compares to yours so you can get an idea of what you will be charging.

Read the full article here.

Learn How To Get Financially Healthy

Mortgage Tips Kristina Crosbie 13 Feb

Your financial state can greatly affect your ability to get a mortgage or loan. It can also increase the amount of unnecessary stress in your life. Here are some tips to get financially healthy and manage your debts, so they don’t manage you.

Begin with budgeting
The Financial Consumer Agency of Canada recommends that everyone start with a budget, which is a plan that keeps you on track in terms of how much you’re spending versus how much you’re earning. A budget is key to making sure you don’t overspend and gives you a roadmap for developing a savings plan. It’s especially important for people who have trouble paying off debts, who want to plan for big purchases such as a car or house, or those needing to save for retirement.

Before you develop a budget, it’s a good idea to first track your expenses for a couple of months to see where your money is going. Separate these expenditures into items that you need, such as groceries, mortgage payments or rent, and items you want, such as dinner out or a new pair of shoes.

Once you have an idea of what you’re spending, see if you’re covering your expenses and have something left over. Budget calculators are handy tools to help track spending. If more money is going out than coming in, you need to look where you can cut expenses and/or increase your income, otherwise, you’ll be well on your way to accumulating debt.

Have a plan to pay down debt
Despite best intentions, Canadians spend more than they earn. Household debt levels are up and the debt-to-disposable-income ratio is on the rise, according to Statistics Canada. The average Canadian owes nearly $1.79 for every $1 of household disposable income.

High debt has many side effects. One of them is stress. According to a survey by the Canadian Payroll Association, 40 percent of respondents said they felt “overwhelmed” by the amount of money they owe. Financial stress can also lead to serious health issues, such as heart disease and high blood pressure, as well as anxiety and depression.

Having a plan to pay down debt is important. Once you have a list of all your debts, how much your payments are and interest rates on each, decide on how you will pay them down. Look at your budget and see what time frame is possible and decide what debts to pay off first. Some people choose to start with the highest interest debt first. Others might choose to start with the smallest debt, to establish a sense of accomplishment and motivate them to tackle the rest.

It’s also important to talk to your creditors to discuss your financial situation. You might be able to get lower interest rates, extend your repayment terms so that your monthly payments are smaller or consolidate your debts, which lets you pay off more, high-interest debts with one regular payment at a better rate.

Understanding credit scores
The amount of debt people have and how well they manage it directly impacts their credit rating and ability to borrow at good rates. Creditworthiness is what traditional financial institutions weigh when considering a mortgage or loan application. One of the first things they do is look at credit scores and credit history. The better these two are, the lower your interest on any debt you do incur will be, and the sooner you can pay off your debt.

Your credit score is a number that ranges from 300 up to 900 and it is based on such criteria as:

Payment history (Do you pay on time? Are you periodically or always late?)
Credit utilization ratio (This refers to how much of your available credit you are using, and experts recommend less than 30 percent)
Length and history of accounts (Do you have a variety of credit accounts?)
Over time, you want to build and maintain a good credit score. Some tips to get that score up include paying bills on time, paying more than the minimum amount, getting your balance down and having a variety of credit.

If you have no credit history at all, or have weaker credit, you can opt for a secured credit card, which is a credit card that’s backed with a cash deposit as security. Using it can help raise that credit score.

Commit to financial fitness
Financial health affects all aspects of life, so it’s important that you’re able to manage your money instead of it managing you. The federal government has many educational tools and information sheets to help you improve your financial literacy.

Read the article by Home Trust here.

Why Everyone Should Use a Mortgage Broker

Mortgage Tips Kristina Crosbie 11 Feb

Hiring a mortgage broker is one of the simplest parts of the home buying process, and yet, according to a survey by the Mortgage Professionals Association of Canada, 39% of first-time home buyers have a poor understanding of what brokers do and their role in the mortgage process. Once brokers’ services are explained, the likelihood of respondents to use one jump from 36% to 59% (and even higher as understanding increases). If you don’t know about the role that mortgage brokers play in the process of getting a mortgage, you could be leaving thousands of dollars on the table. Here are seven reasons why you should use a mortgage broker – even if you’ve never heard of them before.

Lower rates
The most obvious reason that people choose to obtain a mortgage through a mortgage broker is that brokers have access to multiple rates and lenders. Because of this, mortgage brokers have access to rates that may not always be advertised widely, and can be significantly lower than those advertised by banks or credit unions.

Accessibility
Many lenders’ rates and mortgages can only be accessed through a mortgage broker. Brokers can also vet lenders and negotiate on behalf of the buyer, and experienced brokers have relationships with these lenders, as well as the banks. Ignoring these lenders and choosing to get a mortgage with a bank can mean choosing harsher prepayment penalties for breaking your mortgage as well as a higher interest rate, which can cost buyers thousands upon thousands of dollars over the life of their mortgage.

Customization
A mortgage broker is able to better tailor a mortgage product to your specific needs, whether that be working with a lender who is more flexible when it comes to self-employed income or one who has more flexible prepayment terms. Because mortgage brokers have access to more lenders, they’re better able to find a lender and a mortgage based on your specific needs and financial situation in order to get you the lowest mortgage rates today.

Your Ally
A mortgage broker is on your side. “There’s a lot of things that happen when you buy your first home,” said Claire Drage, a mortgage broker with Mortgage Alliance. “A realtor will tell you so much, and the lawyer will tell you so much [but] a good mortgage agent can bring it all together in one place and connect the dots in what can be an overwhelming process.” A mortgage specialist at a bank wants to sell you their product. That’s not a bad thing, but their mortgage product may not be the one that’s most applicable to your situation.

Free to you
Mortgage brokers operate on commission and are paid by the lenders who ultimately grant you your mortgage. Brokers depend on referrals in order to get business, so it’s in their best interest to serve you as best they can. When interviewing a mortgage broker, ask about their fee structure and how they’re compensated to make sure you’re comfortable with it. There usually isn’t an out-of-pocket cost to you.

Experience
Brokers have seen many different clients in varying financial situations. When thinking about how your life may change over the life of your mortgage term, they’ll be able to provide you with options and scenarios that had never crossed your mind and account for them, potentially saving you thousands in the process over the life of your mortgage.

Read the full article by Kimberly Greene here.

Bathroom Renovation Costs in 2020

General Kristina Crosbie 6 Feb

Bathroom Renovation Costs in 2020

Bathrooms tend to be one of the most commonly renovated rooms in the home due to their functionality and frequency of use. They will also be one of the most expensive rooms to renovate on a square-foot basis.

Are you looking to gut the entire bathroom, replace all the tiling and fixtures, and potentially move plumbing to create better space? Or, are you simply wanting to replace the vanity, upgrade a few fixtures, re-paint and fix a few loose tiles? Either way, consider the potential return-on-investment.

Also consider where the money is going to come from. Do you have money saved up? If not, refinancing your home is an option to get the funds you need to make improvements. Talk to your mortgage broker today about refinancing as an option.

We have broken down the costs associated with remodeling your bathroom, so you can see exactly where your money will need to go, and approximately how much every aspect can cost.

Demolition
A complete gut-out with a wall removal should be handled by a pro, for no other reason than the risk of water damage. You can expect to pay on average around $1,500 for the complete demolition and clean-up of your bathroom.

Plumbing & Electrical work
This work requires licensed trades everywhere in Canada, which is what makes them so expensive ($70-$120 per hour). When hiring a contractor to look after the project, they will usually include the cost of sub-trades in their overall quote. Though, be sure to clarify that this is the case when signing any agreement.

Tiling
Tiling costs can vary significantly depending on the quality and style, they can range anywhere from $5 – $100/sq. ft. Installation costs tend to be between $5 and $15/sq. ft. depending on the complexity of the pattern.

Countertop
There are a variety of materials available for counter tops; such as natural stone, engineered stone, or even wood. Depending on the material and the grade you choose, expect to pay anywhere from $30 to $200/sq. ft. including installation.

Vanity
Your vanity will set the look and feel of your bathroom. There are several stock options available that can vary anywhere from $500 to $1,500, with an additional cost of somewhere between $300 and $600 for installation. Getting a custom vanity made is also an option, but keep in mind that it will greatly increase the price.

Labour Costs
General labour costs to cover the small things such as painting have to be calculated into your budget. For a mid-size bathroom, allow an additional $1,000 to $2,000 to cover these costs. However, make sure to check with the contractor that they’re specified as part of the initial quote. Also, labour pricing can vary considerably from contractor to contractor so it’s advisable to shop around and get comparative quotes, but also be sure to consider their experience level.

This post has been edited and revised from the original post by Lucis Di Sclafani, read the full post here.

Mortgages 101 – What You Need to Know

Mortgage Tips Kristina Crosbie 4 Feb

Mortgages in a Nutshell
Since homes are expensive, a mortgage is a lending system that allows you to pay a small portion of a home’s cost (called the down payment) upfront, while a bank/lender loans you the rest of the money. You arrange to pay back the money that you borrowed, plus interest, over a set period of time (known as amortization), which can be as long as 30 years.

How Do You Get a Mortgage?
The companies that supply you with the funds that you need to buy your home are referred to as “lenders” which can include banks, credit unions, trust companies etc.

Your credit score is the primary way that lenders evaluate you as a reliable borrower – that is, someone who’s likely to pay back the money in full without a lot of hassle. A score of 680-720 or higher generally indicates a positive financial history; a score below 680 could be detrimental, making you a higher risk. Higher risk = higher rates!

How Mortgages Are Structured?
Down payment: This is the money you must put down on a home to show a lender you have some stake in the home. Ideally you want to make a 20% down payment of the price of the home (e.g., $60,000 on a $300,000 home), because this will allow you to avoid the extra cost of Mortgage Default Insurance which is mandatory with all down payments of less than 20%.

Every mortgage has three components: the principal, the interest, and the amortization period.

Mortgages are typically paid back gradually in the form of a monthly mortgage payment, which will be a combination of your paying back your principal plus interest.

Principal: This is the amount of money that you are borrowing and must pay back. This is the price of the home minus your down payment
taking the above example, purchase price $300,000 minus $60,000 down payment to get a mortgage (principal) of $240,000.
Interest rate: Lenders want to make money off you, so you will be paying them back the original amount you borrowed (principal) plus interest—a percentage of the money you borrow. The interest rate you get from the lender will vary based on: property, lender, credit bureau, employment and your personal situation.
Amortization: Means the life of the mortgage, or how long the mortgage needs to be, in order to pay off the complete loan (principal) plus interest. Mortgage loans have different “amortizations,” the two most common terms are 25 & 30 years.Within the life of the mortgage (amortization) you will have a Term. The length of time that the contract with your mortgage lender including interest rate is set up (typically 5 years). After your term completes, you can renew your mortgage with the same lender or move to a new lender
 
When to Get a Mortgage

First Step: connect with a Mortgage Broker for a mortgage before you start hunting for a home. You need to know what you can afford – especially with all the new government regulations.
Ideally you need a mortgage pre-approval, which an in-depth process where a lender will check your credit report, credit score, debt-to-income ratio, loan-to-value ratio, and other aspects of your financial profile.

This serves two purposes:

It will let you know the maximum purchase price of a home you can afford.
A mortgage pre-approval shows home sellers and their realtors that you are serious about buying a home.

Types of Mortgages
How do you figure out which mortgage is right for you? Here are the 2 main types of home loans to consider:

Fixed-rate mortgage: This is the most popular payment setup for a mortgage. A fixed mortgage interest rate is locked-in and will not increase for the term of the mortgage.
Variable Rate Mortgage AKA Adjustable Rate Mortgages(ARM): A variable mortgage interest rate is based on the Bank of Canada rate and can fluctuate based on market conditions and the Canadian economy. A mortgage loan with an interest rate that is subject to change and is not fixed at the same level for the life of the term. These types of mortgages usually start off with a lower interest rate but can subject the borrower to payment uncertainty.

How to Shop for a Mortgage?
Use a mortgage broker, a professional who works with many different lenders to find a mortgage that best suits the needs of the borrower.

Brokers specialize in Mortgage Intelligence, educating people about mortgages, how they work and what lenders are looking for. Everyone’s home purchasing situation is different, so working with us will give you a better sense of what mortgage options are available based on the 4 strategic priorities that every mortgage needs to balance:

1. Lowest cost
2. Lowest payment
4. Maximum flexibility
5. Lowest risk

Most Canadians are conditioned to think that the lowest interest rate means the best mortgage product. Although sometimes that is true, a mortgage is more than just an interest rate. You can save yourself a lot of money if you pay attention to the fine print, not just the rate.

Banks tend to concentrate on the 5 year fixed mortgage rate (since that’s the best option for them)… rates are important, however your Dominion Lending Centres mortgage professional will look at the total cost of the mortgage. Brokers will advise & explain mortgage options, help you understand the implications of your choice and help you avoid the pitfalls of choosing a mortgage based on rates alone.

Read the full article by Kelly Hudson here.