Archive for category General Banking
Mortgage Bits: Increase your Payment Every Chance you get
Posted by Top Home Loans in General Banking, Mortgage Advice, Mortgage Rates on November 13th, 2009
Nothing affects the amount of interest that you pay more than the duration of time it takes you to pay off your mortgage in full. Even if you had received the worst rate in the market each term, you would still be better off if you take advantage of lump sum payment and prepayment options.
However, how do you when you can increase your mortgage payments?
There are several specific times when it is most appropriate. These include:
- When your annual income rises due to a raise or a promotion.
- When you receive an annual or quarterly bonus, you should put most of it onto your mortgage.
- When you work overtime, you should put a percentage of the extra income you receive onto your mortgage priciple balance.
- if you run into an inheritance, gift, or other financial aid, then consider applying these funds against the balance of your mortgage.
The more money you are able to put against your principle balance, then the less money you will end up giving to interest.
By increasing your payments with inflation annuaaly, you can shave off years of interest by using this simple rule.
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Mortgage Bits: What do you need to get Approved? Income Documents
Posted by Top Home Loans in Credit Information, General Banking, Mortgage Advice on November 8th, 2009
When thinking about getting a mortgage, most people assume that an approval depends on how much they have in the bank or their credit rating.
Although these items do have an impact, they are not the most critical items to the approval. The most critical item is your annual income.
Why? The bank is uninterested if you have the money to pay off the mortgage; however, they are interested in your ability to make the minimum monthly payments each month. They are also interested in ensuring that you have a guaranteed annual income.
So, what do you need for the bank to verify this?
The best way to ensure the bank has everything they need to approve you is if you provide your most recent pay stub and your last 2 years tax assessments; however, keep in mind that some banks may request more while some banks need less documentation. Make sure you have this as a minimum at all times.
Has your bank asked you for anything different? What process did you have to go through for your mortgage?
Mortgage Bits: How to Rent to Own, Today
Posted by Top Home Loans in General Banking, General Business, Mortgage Advice on November 8th, 2009
Rent to own properties have been a great way for first time home buyers to have the ability to purchase their first home; however, with the extremely low interest rates, this old strategy no longer works. In today’s booming real estate market, a new strategy is needed for new and old home buyers.
Evolution of Rent to Own
The fact is, in today’s real estate market it is now cheaper to own than it is to rent. For an average $400,000 property, it can cost as low as $1300/month to own, whereas if you rented the same house, it would cost as much as double the amount. Not to mention the equity that is being built and the property appreciating.
The fact is home ownership is within everyone’s reach; however, a house that is more than affordable at 3% may not be affordable at all when rates reset at much higher interest rates.
The cold fact remains that house prices are going up far more faster than annual incomes for people living in Canada. This will eventually cause depreciation in the amount of disposable income the average person has.
Is it a right time to buy? Yes. Is it the right time to live beyond your means? No.
Do the economy a favor and live within your means.
Do you know any examples of renting vs. buying? What is your home ownership strategy?