Mortgage Calculators

Many of you reading this will be first time home buyers and should take a minute and play around with the all of the mortgage calculator found at www.yycmortgage.com under the tab 'Loan Calculators'. 89% of all Canadian first time home buyers did research online (awesome!). Here is a brief overview of how to enter the correct information for the Mortgage Qualifier

Mortgage Qualifier - yycmortgage.com > Loan Calculators > Mortgage Qualifier

Interest Rates
Refer to our posted interest rates on the left hand side of the home page at yycmortgage.com. Today our best 5-year interest rate is 4.39%. If you choose any term shorter than a 5-years, use the interest rate of 6.25% (Call Chad for details).

Income
Use the your total gross income (before tax amount) of the parties involved who are purchasing the property. Remember, whoever you add for income also add their liabilities to the equation.

Tax
The tax amount for each property is different, depending on the cities assessed value and provincial tax rate. To find a good estimate of the property tax rate for a neighborhood you are considering to purchase run the numbers for this equation: Property Tax Bill= City assessed value X Total tax rate. To find a properties assessed value in Calgary visit http://bit.ly/9hFHLl. The 'Total tax rate' for Alberta in 2010 is 0.0058734. A safe estimate for a property tax bill is $1,500/yr if you like.

Liabilities
When entering in your liabilities (what you owe) remember these tips: if your loan payment is an installment type (principle + interest) enter in that payment; if your liability is revolving (credit cards & lines of credit) enter in 3% of your current outstanding balance. For example, if you have a vehicle loan with monthly installments, use that payment. If you took out a line of credit and purchased a vehicle, enter in 3% of your outstanding balance.

Condo Fees
As part of condo ownership, there are condo fees. A great estimate for condo fees is to find a similar property (same building) for sale on the MLS which usually posts the condo fees. The calculation will only consider 1/2 of the condo fees you enter, enter the full amount.

Closing Costs
Closing costs are also a variable expense depending on the professionals you decide to use. Typically you will want to have your new home inspected and appraised. If your down payment is less than 20% of the value of the home, the bank will pay for your homes appraisal. Our brokerage will also reimburse you up to $250 for your homes appraisal if it is a conventional mortgage. A home inspection can cost between $400-$650, make sure you are referred to one from myself or your Realtor. Another closing cost is your legal fees (See future posts on legal fees). This can be between $800-$1,200, again make sure you are referred to a lawyer and shop around.

Heating
Estimate your heating bill; a safe amount to use is $90/month. Make sure you consider the age of the property, heating type and style of the property (condo, town house, single detached house).

Tips
If your down payment is less than 20% of the homes value, check the mortgage insurance box. There are rebates in Alberta if you decide to purchase a new home, call Chad for details. Condo fees usually include heating.

Have fun playing around with the different chart selection options and how the calculation is created. Enjoy!

Thank you for reading this blog post. If you have learned something here with me, share it with others. Please refer to my web page for more information on the mortgage industry at www.yycmortgage.com.

Cheers,

Chad

Mortgage Broker Basics

Many of you reading this will be wondering what exactly is a mortgage broker? I hear the names of some other industry professionals and I wonder the same about their work titles too. You may have seen this link on facebook and are wondering, "why are you trying to help me? I can go to my bank for a mortgage". Well as you read, you will find out that may not be the best solution for you.

So what is a mortgage broker?

A mortgage broker basically negotiates the terms of your mortgage on your behalf. A good mortgage broker will tell you how to become mortgage free sooner, explain how to keep more money in your pocket and help you plan a mortgage strategy moving forward. There is much more involved to this profession as you will read about in future blog posts, stay tuned.

I have access to many different lenders and banks that will lend you money to buy a house. Each of these institutions are competing for your business. A major attraction for people looking to purchase a house is the interest rate on their mortgage. When lenders want to attract more business they will typically lower their interest rates. *You should not be strictly driven by interest rates when obtaining a mortgage*. This will be a topic in future posts, stay current. There are different qualifying criteria, lending programs, restrictions and easements from a suite of different banks and lending institutions. This allows me to match each persons unique financial situation to a lender that will accommodate them.

I am always working for you and with your best interests in mind. I am paid a referral fee from the chosen lender, so no money comes directly out of your pocket for my service. My compensation is priced into the interest rate of your mortgage; remember nothing in life is free. I am compensated differently for the term or type of mortgage you obtain. I am transparent with my compensation, so you know I am strictly motivated to help you. I do not receive bonuses or any other incentives from the lender we choose for your mortgage. I want to keep more money in your pocket and add to your bottom line, not the banks. Ask me how to become mortgage free sooner.

If you have made it to this point, thank you for spending 2 or 3 minutes with me. Visit my website yycmortgage.com for more information on saving money or contact me directly at 403-809-5447.

Cheers,

Chad Moore
403-809-5447
chad@yycmortgage.com
yycmortgage.com
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