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Is It Possible For Someone Else To Pay For My Mortgage?

Most lenders don’t really care how you repay your mortgage as long as you make your monthly payments on time. The law understands that sometimes due to unforeseen circumstances, a homeowner may not be able to complete his payments on a home loan. To answer the above question, yes it is possible for someone else to pay for your mortgage.

 Be clear on repayment terms

You need to alert the mortgage lenders in Montreal on the changes and make it clear as to whether you will retain the title of the house or you wish to transfer it to the person making payments. If you wish to transfer ownership then that means that the person paying the mortgage will need to start a new process to get a deed of trust. Usually, the lender will need to check his financial history to make sure they are able to take over the new responsibility. The lender will have to approve first before the third party can start making payments.

If the person is offering to pay without requiring anything in return, then that is treated as a gift. The law requires the person to pay gift tax on his monthly payments. Some lenders don’t accept payments directly from the third’s party bank account and so that means they need to transfer the cash to your account first. You need to have clear records so that it can be clear to the IRS on how much gift tax is deductible. There are some common circumstances that allow other people to pay for someone’s mortgage. Some of the common circumstances include:

Payments from a spouse after divorce

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Usually, a couple has to agree who will reside in the house after the divorce is complete. Just because a couple is separated it does not negate them from repaying the mortgage. A spouse can agree to pay the mortgage even after moving out. If the couple has a joint claim on the title of the house and they agree that the one residing in it has to take over mortgage repayments then he or she has to apply for a quitclaim deed. The lending company sometimes has to check financial statements to ensure that the new sole owner is able to repay the home loan.

Children paying for their parents’ mortgage

It is normal for a child to want to pay for his parents’ mortgage as one way of showing appreciation. If the child does not require the ownership of the title or he does not expect a repayment from his parents later on, then this is considered to be a gift. He will still be legible for a gift tax. If by any chance the child wants to assume the ownership title, then he has to undergo a process that takes 60 to 90 days. Lenders use this time to scrutinize his financial records before changing ownership. The parents have to confirm that they are willing to turn over the house title to their son or daughter.

It’s Time To Figure Out Which Kind Of Mortgage Is Right For You!

Mortgages are a good option for those who desire to acquire property or equipment fast. Unfortunately, you cannot compare a mortgage to a one-size-fits-all garment. There are different types of mortgages one can choose from to fit different situations. What does this mean? For example, when you go shopping for a vehicle, a salesman can give you all the advantages that come from owning a pickup truck and when you look at it there is actually some sense in owning one. However, what he did not consider was that you could be a salesman working in the city or a soccer mom who needs to drive her kids to and fro school every day.

Yes, the truck sounds like a good idea but will not fit these two scenarios. This is the same with mortgages. The following are mortgages type that you can choose from depending on what suits your situation best.

15 year FRM

A 15-year fixed rate mortgage means that you have to pay off your mortgage in fifteen years. This mortgage type allows you to pay off your mortgage within a short period of time and that come with several benefits. It means that you will not have to put up with payments in your golden years when you are on a fixed income.

The other benefit is that you save a lot of interest to be paid compared to a 30-year plan. The shorter the loan term the less the interest rate! One downside to this mortgage type is that you have to make higher monthly payments than when you have to pay for a longer period of time. This mortgage plan is best suited for someone who is able to make huge monthly payments without too much financial strain.

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5/1 ARM

This is a mortgage type fully known as the 5-year adjustable rate mortgage. There are myths about this mortgage type which can easily scare one away. The 5-year adjustable rate mortgage usually means that you agree on a low interest rate let’s say about 2.75 percent for the first five years. After the first five years are over, the rate changes every year depending on a defined index. This means that your monthly payments will also change depending on how rates change. You save a lot of interest the first five years. This plan suits best someone who is planning to sell off their house after the 5 years are over therefore saving on interest paid.

30 year FRM

The 30-year fixed rate mortgage is popular to many mortgage applicants the reason being the security if offers to borrowers. The mortgage payments are spread out in 30 years on a fixed interest rate meaning that payments stay constant for 30 years. The monthly payments are usually low compared to the 15-year FRM and the first five years of 5/1 ARM. You can use the amount saved on monthly payments to invest in other things therefore, giving you more chances of growing. This plan is best suited for someone who loves security and is looking for low mortgage rates.

3 Important Things You Need To Lock Down Before Applying Your First Home Loan

Setting off on a journey to get your own home is such an exciting thing. This is because the last thing you will worry about at the end of every month is paying rent. While there is some excitement in buying a new home, there are also a number of challenges that you may face. As you read on, you will learn about three basic things that you need to know to get it right when looking for the most effective finance solution so you can acquire your dream home.

Present your credit report

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This should not worry you at all because you are entitled to at least three credit reports from various credit bureaus operating in your locale. It is important to ensure that you have taken a keen look at the credit reports before you start picking houses. If you are intending to acquire a home with a spouse, they should also bring out their credit reports.

Look for anything that may lead to illegibility when applying for a home loan. Try to see if you can settle any outstanding debts or possibly fix certain errors that may exist in the credit report. If there is any serious issue, you can always liaise with the bureau and you will be assisted.

Boost your savings

If you are planning to get a new home, you should consider boosting your savings. You can simply do that by increasing the amount of money you set aside monthly or periodically by a certain percentage. You should increase your savings because when you apply for a loan, the lender will require copies of your bank statements.

Generally, they are interested in knowing the amount of money that you have in your bank account currently. Note that it applies to all the bank accounts under your name. You will have to be transparent and genuine regarding this matter. This is because you may be required to explain any unusual large amount in any of your bank accounts. If you have less savings, that could still be a problem. Just ensure you have the right amount of savings in your bank, which is achievable by saving a little more.

Look for a good mortgage lender

When looking for a mortgage lender, you should not close a deal with the first lender who offers you a loan. Instead, try to approach several other lenders by either telephone calls or email. Finding several lenders will put you in a position to make the right choice. You will be able to determine if you will do well with a particular lender. Different lenders offer varying mortgage rates, varying fees and terms. Shopping around allows you to get the best deal.

Before applying for a home loan, you need to ensure that everything is perfectly in place. If there is anything that seems unclear, you may consult brokers for further explanation. Real estate agents are also in a better position to help you get a better view of things. Essentially, good credit report, adequate savings and a good lender are the crucial factors that will help you get a good mortgage deal.

What You Need To Know Before Refinancing Your Home

Debt consolidation or mortgage refinance is the process of obtaining a new mortgage with a goal to reduce monthly payments. You can choose to refinance when you want to lower your interest rate, or you need cash to cater for large purchases. People with equity on their homes prefer to choose refinancing. Having equity in your home is simply the sum total of the difference between the value of your home and the amount owed to a mortgage company.

Advantages of Refinancing

• People who refinance with their mortgage companies end up paying less interest on their loans and this increases their credit scores. With a better credit score, you can access more loans if need be.

• Refinancing helps a person in obtaining money for huge purchases. Therefore, they don’t end up using their credit cards thus reducing debts.

Risks involved in mortgage refinance

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It is important to note that most mortgage agreements allow the company to charge a fee when you choose to refinance your home. These costs sometimes run into thousands of dollars and can be very expensive. Before you finalize your agreement for refinancing ensure that the cost of penalties will be worth it with the value you get in the final run.

You also need to keep in mind the other hidden costs like paying for your attorney who ensures that you get the most beneficial deal possible and bank fees. You can shop around for free refinancing, and this will save you on the bank charges.

The cost of mortgage refinancing

The following are costs involved in refinancing your home.

• The application fee: This cost is usually imposed on by the lenders to cover the expenses when they go through the initial processes of checking your credit score and loan processing.

• The attorney fees: Lenders have to pay for their attorneys who conduct these settlements. The bank then charges these fees to the borrower. You can retain your attorney to represent you in the settlement.

• The title insurance company: This is put in place to cover the cost of policy. The insurance covers the policyholder any loss that may incur due to discrepancies in the title of the property. It also includes the cost of verifying property ownerships by reviewing public records.

When to refinance your home?

Most lenders require one to at least maintain his mortgage for 12 months before thinking of refinancing their home. Each lender has their terms. Therefore, it is best to check with your lender to understand the restrictions that come with the applied mortgage. In most cases it is advisable to refinance with your original lender although this is not always required. Most banks prefer to keep their current clients by offering better prices for those looking to refinance. It saves you in the cost of having to go through a property appraisal all over again since your original lender has this information already. With these facts in mind, you obtain a better rate when you refinance with your original lender.

Comparing House Prices in Montreal, Vancouver and Toronto

For starters, the average price of a home in Canada is approximately $440,000. Montreal is one of Canada’s best big-city bargains when it comes to buying a home. Average sale prices, over the past few years, were forecasted to be more than $887K in Vancouver, less than $613K in Toronto, and over $338K in Montreal. Read on to find out more about the house prices in each city as well as the types of houses you can purchase with the value of an average Canadian home pricing.

Types of houses found in Montreal, Vancouver and Toronto

Montreal is built in a way that makes incorporating a wide variety of apartment styles possible. In addition, it has a housing market that consists of more than 50% renters. For starters, you can find studio or loft apartments in Montreal and they typically feature one large open space that comes with a mezzanine for sleeping. There are also two- and three-story apartment buildings that houses units that have their own entrances. Also known as duplexes and triplexes, these apartment units can feature winding stairs as well. In Montreal, full houses (which are available for rent) and multiple apartment buildings are uncommon.

From townhouses, condominiums to penthouses, Vancouver offers a decent range of housing options but at really expensive prices. If you are planning to invest in a property here for the long haul, price won’t matter. Even if the price of your home in Vancouver drops in the short term, you can still afford to hold on to it as it will eventually recover. What’s more, there is a shortage of land here. Toronto, on the other hand, is enjoying a booming condo market, and there more condo projects growing more complex, expensive and larger over the years.

What can the average price of a Canadian home get you in each city?

In Montreal, you can purchase a 930 square foot, two-bedroom duplex that comes with a single bathroom. Vancouver, on the other hand, has 925 square foot, two-bedroom condos that you can purchase at the same value. The average price for a single-family detached home here has also surpassed the $1.4 million mark. The near 20 per cent jump over the past year has widened the affordability gap between condos and houses. The value of a land in Vancouver is one of the biggest reasons why prices were driven higher for detached properties.

Based on the average Canadian home pricing, you can also purchase a 900 square foot, two-bedroom condo that comes with two attached bathrooms in Toronto. Recent studies have also shown that the average price of a house in the Greater Toronto Area has increased by more than 7%.

How to purchase a house in Montreal, Vancouver or Toronto?

If you are buying your first home in Montreal, Vancouver or Toronto, it is pertinent that you consult mortgage brokers for their knowledge and advice, and be mindful of your current financial situation. By having full control over your mortgage, you can also grow your home’s equity as its value increases. Once the technical aspects of buying a home are covered, you can choose the type of house you really like with peace of mind.

Winning The Lowest Mortgage Rate For Your Home

There is definitely a multitude of factors affecting mortgage rates, which include some aspects like property type, loan program and property occupancy. While this is a clear fact to many people, there are other factors that have the most influence when you want to secure new mortgage rates irrespective of the economic conditions. By looking at these factors, you will be able to know how you can win the lowest mortgage rates for your home and be able to save something in the long run.

Consumer profile

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The risk of the loan bears a direct relationship with its cost. Lenders generally carry all the risk since they are they are the ones who create the loans. That means they make charges depending on the market conditions. Consumer profile is one of the essential factors that mortgage lenders consider before giving out loans. The consumer profile covers such things as loan type, debt ratio, occupancy, credit score and property type. Lenders take their time to look into a consumer profile to ensure they are making the right choice when giving out the loan. Therefore, your profile needs to be on point if you want to get the lowest mortgage rate.

Property profile

Mortgage lenders also consider the property profile before giving out loans. An assessment has to be carried out to determine if the property is a single-family residence, a townhome or a condominium. All these factors affect pricing. Properties such as multi-family homes and condominium have a different pricing adjustment, which makes the loan more costly. Therefore, the property type can easily help you do the math regarding the kind of mortgage rates you are likely to get from lenders. Seemingly, single-family homes get lower rates as compared to condominium and multi-family homes.

Economic situation

Economic conditions change on a daily basis. That is why lenders also consider the economic situation alongside property and consumer profile. Unemployment report is usually among the top factors that drives mortgage rates. The mortgage rates may be higher or lower depending on the unemployment report. If the report is better, the rates may hold or rise significantly. However, if the reportis not good, lower rates are likely to apply. Since mortgage rates vary depending on the economic situation, you need to pay attention to economic conditions before making any choice.

Loan type

Rates also apply according to the loan type. In that case, if a customer does not have the ability to increase down payment as well as the loan-to-value, he can always consider the idea of improving his credit score. Financial reports indicate that borrowers mostly benefit from non-governmental loans when they put in efforts to improve their credit scores. This is because most conventional loan programs make pricing based on loan-to-value and credit scores.

You can get low mortgage rates by considering these factors before applying for a mortgage. The idea of getting low mortgage rates is about making it possible to save some money throughout the mortgage term so you can achieve the dream of owning a nice home.