Anne Adams
Broker of Record
416-255-SOLD (7653)


Toronto West Realty Inc., Brokerage
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Helpful Tips For Buyers

 

Bi-weekly and weekly payments

Most mortgages have the option to allow payments to be made on a weekly or bi-weekly basis. This option may be desirable for two reasons. The first is it can save you money as you can expect to pay off your mortgage about "Four Years Sooner". This can save you dramatically over the life of your mortgage. The other reason why these options are so popular is that if your employer pays you on a weekly or bi-weekly basis, you can simplify your budgeting by making the payment line up with the way you are paid.
 

Making Extra payments

Paying extra amounts on your mortgage can make a big interest saving over time. When we select a mortgage company, privilege payments options are something that we look for. A 20% privilege payment will allow you to pay off up to $20,000 per year on a $100 000 mortgage. It is important that the privilege payment also be flexible to allow you to pay smaller payments on the mortgage and as often as you wish. An extra $1000 periodically paid on a mortgage can help you become mortgage free faster.
 

Reducing the CMHC fees on your purchase

When you require a mortgage for more than 80% of the purchase price of a property, that mortgage must be insured by Canada Mortgage and Housing (CMHC) or GE Mortgage insurance. The premium charged by these company`s decreases as the down payment increases. When you finance your property at 95%, a premium of 3.75% is added to the mortgage. By increasing the down payment to 10% of the purchase price the premium can be reduced to 2.5%. If you can put down 20%, you can avoid any additional insurance fee. Depending on your situation there are ways that you can structure this financing to avoid the CMHC or GE insurance premium.
 

Advantages of Bigger Down Payments

As mentioned above, when you put a 25% down payment on your purchase you can avoid the CMHC premium. More importantly the larger the down payment, the lower the amount of interest you will pay over the life of your mortgage. It is important to note that it may not be wise to stretch yourself to increase your down payment and end up borrowing on credit cards or a line of credit at a higher rate.
 

Short Term Rates vs. Long Term Rates

The options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6-month terms to 10 year terms. Taking a variable or floating rate mortgage can have savings. Typically the shorter the term or guarantee of the rate, the lower the rate will be. This does not always happen, depending on the market place and the economy, but history has shown that short-term rates tend to be lower than long-term rates. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision. Make sure you talk to an expert when you are making this decision.
 
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Toronto West Realty Inc. has attracted over 120,000 visitors to its web site   www.TorontoWestRealty.com The web site provides viewers (sellers and buyers) with easy access to MLS Listings.

Toronto West Realty Inc.'s web site   www.TorontoWestRealty.com is considered to be a mature site along with being optimized for several years to attract buyers who are searching out real estate listings on the internet in  the Toronto West  and  Etobicoke  Neighbourhoods including, Edenbridge - Humber Valley, Old Kingsway - Kingsway South, Islington - Sunnylea, Lambton Baby Point, Lincoln Woods, Princess - Rosethorn,  Bloor West Village - High Park, Toronto Waterfront Condos and Townhouses, Bal Harbour Village and Toronto West Real Estate.

Have a look at the  Testimonial Tab at the top of my web site to view the Testimonials from my appreciative sellers and buyers.

Let me know if you also would like to experience exceptional real estate service.

 

Sincerely,

Anne Adams, Broker of Record

Toronto West Realty Inc., Brokerage

E-Mail:  aadams@torontowestrealty.com   or call

416 255 SOLD (7653)


Toronto West Realty Inc., Brokerage, independently owned & operated
30 Yachters Lane, Etobicoke, ON M8V 4C5, Canada | 416 801 7653

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