Jessi Johnson | FIRST HOME INFO » Mortgage Terms and Tricks

Frozen VRM (variable rate mortgage)

Fri, 28 May 2010 16:19:06 +0000

An excellent way to force an increased payment while protecting yourself from raising interest rates is the frozen mortgage payment available for variable rate mortgages. This option is hard to find but a good broker will know where to look. Let’s take a look at today’s (Jan 15, 2010) frozen payment: 2.05% Current [...]

Bank posted rate

Fri, 28 May 2010 16:19:06 +0000

The bank posted rate is the rate banks would previously attempt to sell you until mortgage brokers came into play. Now most banks have smartened up and seldom insult ones intelligence with such high rates. Generally a bank posted rate is about 1.5% higher then a broker discounted rate. Share and Enjoy:

Broker discounted rate

Fri, 28 May 2010 16:19:06 +0000

The mortgage broker discounted rate is that wonderful rate you can obtain for your mortgage which is generally 1.5% less than the bank posted rate. Share and Enjoy:

LTV (loan to value)

Fri, 28 May 2010 16:19:06 +0000

Loan-to-value ratio (LTV) is the amount of the mortgage loan (liability) compared to the value of the property. This ratio is calculated by the lender prior to providing the loan. The results of this calculation help to determine whether or not the applicant will qualify for a loan and whether the application, if approved, will [...]

Qualifying rate

Fri, 28 May 2010 16:19:06 +0000

When qualifying for a mortgage, the lender will require you to be qualified for a specific rate regardless of the term or product you take. The concept of a qualifying rate is to reduce the amount of Canadians who are over-leveraging themselves. In the event you have 20% or greater down payment on purchase or [...]

High ratio mortgages

Fri, 28 May 2010 16:19:06 +0000

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Buying on speculation

Fri, 28 May 2010 16:19:06 +0000

Debt servicing ratios (GDS / TDS ratios)

Fri, 28 May 2010 16:19:06 +0000

Debt servicing ratios are the ratios used to calculate debt owed by someone looking to obtain a mortgage. Gross Debt Service Ratio (GDS): The percentage of the borrower’s income that is needed to make all payments for costs associated with housing. There is a maximum amount associated with this ratio to ensure that borrowers can afford [...]

Presale purchase

Fri, 28 May 2010 16:19:06 +0000

Purchasing presale is when you buy a property before it’s built. If you are planning on selling this property before completion to make a profit, than that would be a perfect example of buying on speculation. Share and Enjoy:

Buying on speculation

Jessi — Sun, 07 Mar 2010 18:36:30 +0000

Certainly not the safest real estate investment concept but one that was been very successful for people in the past. Buying real estate on speculation essentially means you plan to make your capital (sale revenue) from the equity growth of the property, rather than obtaining a tenant and waiting for the years to pay off the mortgage. Purchasing pre-sale, waiting a few years and selling before completion is a perfect example. You are required to pay the deposit up front but that’s it. This has proven to be lucrative at times but quite the opposite when the property values decline. Remember to always be prepared (qualified) to complete the saleand be cognizant of the fact that the property value could decline instead of increase.