Comments on: How To Avoid Extra Costs On Your Mortgage http://adawnjournal.com/2010/05/18/how-to-avoid-extra-costs-on-your-mortgage/ A blog on Personal Finance, Investing, Entrepreneurship, and More Wed, 01 Feb 2012 22:37:32 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Toronto Bankruptcy Trustee http://adawnjournal.com/2010/05/18/how-to-avoid-extra-costs-on-your-mortgage/comment-page-1/#comment-2412 Toronto Bankruptcy Trustee Sat, 22 May 2010 22:20:21 +0000 http://adawnjournal.com/2010/05/18/how-to-avoid-extra-costs-on-your-mortgage/#comment-2412 This is a good article, but it should also mention that a significant cost in obtaining a mortgage in Canada is the CMHC insurance premium if the purchaser's down payment is less than 20%. This premium amount is added to the mortgage and amortized over the term of the mortgage. During the crazy days of the real estate boom prior to September 2008, it was possible to purchase a home with 0% down payment, but the CMHC premium would be 3.10% of the mortgage amount borrowed. This is a significant cost. If the buyer cannot afford the 20% down payment, they should try to borrow from family if possible and pay them a reasonable rate of interest. They can also provide the family member with a charge over the property to secure the loan. It's simply better to pay the family member a fair rate of return and keep the money in the family than forking over thousands of dollars to CMHC. Hope this comment is helpful.... This is a good article, but it should also mention that a significant cost in obtaining a mortgage in Canada is the CMHC insurance premium if the purchaser’s down payment is less than 20%. This premium amount is added to the mortgage and amortized over the term of the mortgage.

During the crazy days of the real estate boom prior to September 2008, it was possible to purchase a home with 0% down payment, but the CMHC premium would be 3.10% of the mortgage amount borrowed. This is a significant cost.

If the buyer cannot afford the 20% down payment, they should try to borrow from family if possible and pay them a reasonable rate of interest. They can also provide the family member with a charge over the property to secure the loan. It’s simply better to pay the family member a fair rate of return and keep the money in the family than forking over thousands of dollars to CMHC.

Hope this comment is helpful….

]]> By: ScottyMortgages http://adawnjournal.com/2010/05/18/how-to-avoid-extra-costs-on-your-mortgage/comment-page-1/#comment-2399 ScottyMortgages Wed, 19 May 2010 19:32:09 +0000 http://adawnjournal.com/2010/05/18/how-to-avoid-extra-costs-on-your-mortgage/#comment-2399 It is all about the options that go along with the mortgage you select. Some mortgages allow for a missed payment. No frills low rate mortgages can be ok if you are sure you are not going to move and plan on making payments till term but getting out of them can be very costly. It is all about the options that go along with the mortgage you select. Some mortgages allow for a missed payment. No frills low rate mortgages can be ok if you are sure you are not going to move and plan on making payments till term but getting out of them can be very costly.

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