General Home Mortgage Information in Ontario , Canada
If you want to find the best mortgage deals in Ontario , you have to consider the terms and conditions . You have to know the difference between various types of mortgages : closed or open , fixed or variable and methods of prepayments .
Closed mortgages have lower interest rates and most people opt for this . However , the amount in which you can prepay is restricted . You will incur interest penalties if you overpay . On the other hand , in an open mortgage you can pay as much prepayment principal as you can in a year . You can do this if you are anticipating a large sum of money in the near future .
Fixed mortgages are the most preferred mode of financing , because most customers have a fixed budget . It has a set interest rate that stays constant during the mortgage term . Variable mortgages have a lower interest rate but fluctuate during the mortgage term , because they are tied to the market rates .
In Ontario , to purchase a home , you are required to pay a down payment of 5 % minimum . You should note that there is a maximum price restriction . To obtain a mortgage , you are required to produce a proof of your income , have a good credit rating , a verifiable down payment and an online approval application . You are required to meet other costs such as legal fees , survey certificates and appraisal fees .
For the down payment , you are allowed to pay using either , your accumulated savings , a gift from your immediate family , proceeds from selling of previous home , or your registered retirement savings plan . The retirement savings plan , is not taxable if paid within the designated period of time .