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