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.