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jack-rice
05-20-2006, 11:25 AM
A mortgage (http://en.wikipedia.org/wiki/Mortage) is basically a loan (http://en.wikipedia.org/wiki/loan) specific to the real estate market (http://svcft.net). Typically, it covers 70-90% of the purchase price of a house or other property, with the penalty for non-payment being foreclosure (http://svcft.net/bad-credit-mortgage-refinance.html), or reversion of the property to the lender. They are available from most banks, credit (http://svcft.net/home-mortgage-refinance-loan.html) unions, portfolio lenders and some government agencies (http://svcft.net/refinance-mortgage-rate.html).

Mortgage loans (http://svcft.net/refinance-mortgage-loan.html) usually employ a 30-year repayment (or amortization) schedule. Payments are a changing combination of interest and principal, so that in the early years a payment mostly consists of interest on the outstanding principal balance (http://svcft.net/mortgage-refinance-california.html), but in later years the mix becomes much more heavily weighted toward paying the principal itself. There also is private mortgage (http://svcft.net/florida-refinance-mortgage.html) insurance to consider, which is required if less than 20% is put down on the house (http://svcft.net/house-mortgage-refinance.html). It has gotten easier to actually get rid of this extra payment (http://svcft.net/best-refinance-mortgage.html) as soon as possible.

Learning the administrative and legal aspects (http://svcft.net/map.html) of the loan process is essential for anyone considering a loan. A borrower should know what contracts and documents he or she will encounter (http://svcft.net/mortgage-refinance-calculator.html), and how to negotiate through the paperwork. Also, it is important to be aware of what fees may be assessed and how to minimize or eliminate them wherever possible.

more about loans (http://en.wikipedia.org/wiki/loans)

QuasarCav
05-20-2006, 11:46 AM
Thanks

broken_legs
05-20-2006, 02:17 PM
I thought you needed 25% down to avoid CMHC

Can anyone confirm what the cut off is for a high ratio mortgage?

Toma
05-20-2006, 03:26 PM
Originally posted by broken_legs
I thought you needed 25% down to avoid CMHC


Yep....

Tik-Tok
05-20-2006, 05:32 PM
Quick note since we're on the topic.

If your renting right now and trying to save for a down payment on a house, you may REALLY want to consider a no-downpayment mortgage. Even though you have to pay posted rates and won't get the kick-azz deals you can with a downpayment, it may not be worth it to save the $ yourself.

For us...

To save the 5% minimum down payment on our $200G house (2 years ago they were still that cheap, lol) it would've taken us 2 years to save that.

Fast forward to this year (when we would have the downpayment), our house is now worth $300+, no way we could afford that, and that's not including 2 years worth of rent we would've just put in someone else's pocket.

Weapon_R
05-20-2006, 05:36 PM
Where can you get a no downpayment mortgage anymore?

Sharpie
05-20-2006, 05:48 PM
Originally posted by Weapon_R
Where can you get a no downpayment mortgage anymore?
I am pretty sure some banks are doing 35year+ mortages now..

Tik-Tok
05-20-2006, 06:04 PM
Originally posted by Weapon_R
Where can you get a no downpayment mortgage anymore?


We got ours through Royal Bank. Basically all it is, is a 5 year term loan tacked onto your mortgage, if you sell your house within 5 years, you have to pay them the balance of the down payment (plus the acutal mortgage of course)

The only catch is you can't bargain with them, you have to take the posted mortgage rate, and it has to be for a 5 year term with them (after that you can take your business elsewhere just like a normal mortgage transfer, well worth it IMO though.

Links to

Royal Bank no down payment mortgage (http://www.rbcroyalbank.com/products/mortgages/no_down_payment.html)

D. Dub
05-20-2006, 07:15 PM
Originally posted by Weapon_R
Where can you get a no downpayment mortgage anymore?

From me...a mortgage broker.


I have access to about 3 or 4 different types of no-downpayment mortgages!!!!!

broken_legs
05-21-2006, 07:24 AM
Is any body on here experienced with assumable mortgages?

D. Dub
05-21-2006, 09:05 AM
what do you want to know?

broken_legs
05-21-2006, 09:50 AM
Well I have a basic understanding of the process

This is how I *think* it works:
You pay out the owners equity and just assume their payments. You are not subject to a credit check or qualified for the mortgage because technically the person you are assuming from is still liable for some time.

So its a great way of aquiring a property without having teh necessary finances immediately available, or if you have bad credit.

What i'm curious about is how to approach someone whos selling their house, if there is a market just in assumable mortgages in Calgary, if its better to have your own mortgage, or if there are any hidden problems that i havent really considered about this (ie fees, penalties etc..)

Toma
05-21-2006, 10:21 AM
Assumables are easy. I have yet to meet anyone who is not willing to let you assume their mortgage....

Of course, in this market, finding someone with a reasonbale cash to mortgage is very hard lol.

I assumed a house or two.... it's a great way to go if your credit is not so hot, OR your income to debt ratio is too high "according" to the bank.... When you have more then one house, they take the total payment as debt, but only half the rental income as income... so it can get very difficult to get a real mortgage once you have more then one or 2 properties...

broken_legs
05-21-2006, 11:47 AM
Thanks Toma. I've got some mroe questions though :)

When you assumed te mortgages did you assume them under your own name or was it done under a corpoartion?

Do you know if a corporation can assume a mortgage?

When you talked about applying for mortgages you said it was harder, but were you applying under your name or as a corporation?

Did you have to go under a credit check or any kind of qualifying by the buyer before you could assume the mortgage?

So you and the seller decide that you will assume their mortgage. Do you go through lawyer, the mortgage company or what? What about CHMC - Do you have to reinsure the property?

Sorry fr asking so many questions - Ive read all this stuff in books but never actualyl talked to anyone whos done it in real life :)

thanks

Weapon_R
05-21-2006, 11:57 AM
The reason CMHC hates assumables so much is because they don't get their fee. You go through a lawyer, who will transfer the title to you. When you assume, its under your name and not a corporations.

broken_legs
05-21-2006, 01:22 PM
Are you saying that if I set up a real estate holding corporation to set myself up better for tax purposes that I could not use that corporation to assume a mortgage, that I would ahve to assume it under my own name?

D. Dub
05-21-2006, 06:10 PM
The biggest problem with an assumable for most buyers is that its rare to find one where you don't need a whack of dough to buy it.

Low -down assumables are usually scams.

D. Dub
05-21-2006, 06:12 PM
Originally posted by broken_legs
Are you saying that if I set up a real estate holding corporation to set myself up better for tax purposes that I could not use that corporation to assume a mortgage, that I would ahve to assume it under my own name?

Even under a corporation a bank/lender would require you to give a personal guarantee on any property anyways.

D. Dub
05-21-2006, 06:14 PM
Originally posted by broken_legs
Thanks Toma.
Did you have to go under a credit check or any kind of qualifying by the buyer before you could assume the mortgage?





Many lenders are not allowing you to assume their mortgages without qualifying first.

HRD2PLZ
05-22-2006, 08:51 AM
A lot of home owners I have come across now would rather pay their mortgage payout penalty instead of having their mortgage assumed. Too much risk involved with assumables for a seller now. Quite a few of the assumables were used as grow houses or for mortgage fraud. Not to mention, if the mortgage was originally CMHC insured and it becomes foreclosed on, CMHC goes back on everyone up to and including the owner who was given the original loan.

If you can find a good assumable its a good route to go as a buyer though (especially for revenue property), assuming the price hasn't been inflated for fact that its an assumable (VERY common in low-down assumables).

broken_legs
05-22-2006, 09:49 AM
Originally posted by HRD2PLZ
Not to mention, if the mortgage was originally CMHC insured and it becomes foreclosed on, CMHC goes back on everyone up to and including the owner who was given the original loan.


Isnt there some limitation to how long the original owner is responsible for the mortgage? (i could be making this up**) I thought i read somewhere they are responsible for up to a year or so, then after that it lies solely on the person who assumed the mortgage.

HRD2PLZ
05-22-2006, 09:22 PM
Originally posted by broken_legs



Isnt there some limitation to how long the original owner is responsible for the mortgage? (i could be making this up**) I thought i read somewhere they are responsible for up to a year or so, then after that it lies solely on the person who assumed the mortgage.

It used to be a year... CMHC now goes after every person who held that mortgage... Previously if a new owner made their payments for 1 year, then the previous owner was off the hook from any foreclosure. Such is not the case anymore.

broken_legs
05-24-2006, 01:54 PM
Heres another dumb mortgage question

I've been using all sorts of different mortgage calculators on the net. they are all a little bit different and its pissing me off.

My question is: Are your mortgage payments decided on the entire amount of the mortgage (ie the price of the house)? Or does the bank/broker only lend you the price of the house minus your downpayment?

I can find deals that make sense to me now if i subtract the downpayment from the mortgage amount and use that amount to calculate the mortgage payments, but if I leave it in and count the downpayment as one big payment then the deals arent looking so good LOL

lint
05-24-2006, 02:08 PM
Originally posted by broken_legs
the bank/broker only lend you the price of the house minus your downpayment?


bingo. the mortgage is not for the entire cost of the house, unless it's 100%. cost of house less downpayment is the mortgage amount