Every mortgage company under sun claims to have the lowest rates. But who really has the lowest rates? It’s hard to tell with all the clever ads and fast talking salespeople, but I will break down how it really works in this quick article: Big banks can get away with charging more because some people will always just feel more comfortable doing business in the bank branch atmosphere.On top of them being aware that they can charge more for this service, they also need to charge more to cover the large infrastructure expenses associated with running a nationwide brick and mortar operation.
Mortgage terms : Closed mortgage – A mortgage that cannot be repaid or prepaid, renegotiated or refinanced prior to maturity, unless stated in the agreed upon terms. Closing costs – Costs that are in addition to the purchase price of a property and which must be paid on the closing date. Examples include legal fees, land transfer taxes, and disbursements. Debt service ratio – The percentage of the borrower’s income used for monthly payments of principal, interest, taxes, heating costs, condo fees (if applicable) and debts. GDS is gross debt service – how much you spend on Principal, Interest, Taxes and Heating. TDS is total debt service – GDS plus all other debt payment obligations. Default – A homeowner is ‘in default’ when he or she breaks the terms of a mortgage agreement, usually by not making required mortgage payments or by not making payments on time. Down payment – The money that you pay up-front for a house. Down payments typically range from 5%-20% of the total value of the home, but can be anything above 5%, if you qualify. Early Discharge Penalty – A penalty you may pay your lending institution for breaking the mortgage contract early. This is usually 3 months interest or the Interest Rate Differential (IRD), whichever is larger. See below for IRD.
Being careful with your money is extremely valuable. Here are some tips related to financial terms. Secured credit cards are an option for people who don’t have a ?credit history or who have damaged their credit status. Secured cards require a security deposit to be placed on the card. The credit limit on a secured credit card is typically equal to the amount of the deposit made on the card, but it could be more in some cases – such as a major default such as defaulting on a mortgage payment. It’s worth noting that you’re still expected to make monthly payments on your secured credit card balance.
Obtaining a Payday Loan: Payday loan providers are typically small credit merchants with physical locations that allow onsite credit applications and approval. Some payday loan services may also be available through online lenders. To complete a payday loan application, a borrower must provide paystubs from their employer showing their current levels of income. Payday lenders often base their loan principal on a percentage of the borrower’s predicted short-term income. Many also use a borrower’s wages as collateral. Other factors influencing the loan terms include a borrower’s credit score and credit history, which is obtained from a hard credit pull at the time of application. More financial calculators at Home mortgage rates.
Terms: An unsecured loan is a loan that is issued and supported only by the borrower’s creditworthiness, rather than by a type of collateral, such as property or other assets. Credit cards, student loans, and personal loans are all examples of unsecured loans.
Balance transfer: The movement of the amount owing from one account to another account. A credit card balance transfer, for example, involves the movement of the amount owed on one or more credit cards to another account or institution, usually for the purposes of consolidating debt and/or taking advantage of better interest rates and/or payment terms. More financial info on House payment calculator.
Net Income: In its most basic definition, net income refers to a company’s total earnings or profit. Simply put, net income is the difference calculated when subtracting all expenses (including tax expenses) from revenue. When a company’s net income increases, it’s normally a result of either revenue increasing or expenses being slashed. It goes without saying that an increase in net income is generally perceived as a positive thing and factors into a stock’s performance.
Mortgage broker – A company or individual that finds mortgage financing for individuals and companies whether for purchase, refinance, lender switches, etc. A broker does not actually lend money but seeks out a lender and arranges the mortgage terms. More on Best mortgage rates. High ratio mortgage – A mortgage where the borrower is contributing less than 20% of the value of the property as the down payment. The borrower may have to pay a mortgage default insurance premium such as CMHC insurance, usually tacked onto the mortgage amount.