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What is an open mortgage?

A: An open mortgage gives you the most flexibility in making extra payments towards your mortgage principle and even lets you pay off your mortgage entirely whenever you wish to. If you have uncertainty in your life such as serious illness, a looming separation or a possible job transfer to another city, it is better to have an open mortgage. This way if you have to move, you can pay off your mortgage without penalty. This could save you thousands in prepayment penalties. Warning! Not all open mortgages are created equal. Check to see just how 'open' your mortgage is!

What is a closed mortgage?

A: Compared to open a closed mortgage offers little to no privileges in paying off your mortgage early. You cannot pay off your mortgage without attracting penalties, called prepayment penalties, from the lender. Often though, you do have the ability to prepay up to 15-20% of the original mortgage balance, each year. Warning! Not all closed mortgages are created equal check with your mortgage specialist as to how your prepayment penalties are calculated. The difference between one lender's definition of penalty to another lender is enormous.

What is a fixed rate mortgage?

A: It simply means that for the term of your mortgage the interest rate charged is a fixed amount and does not change during the term of your mortgage. If you look at our rate comparisons you will see this distinction between fixed and variable rates.

Can I have my property taxes included with my mortgage payment?

A: Yes, most institutions will allow the option of paying your own taxes, or having them included with your mortgage payments. However, some lenders may insist that they be included with the mortgage due to the loan to value ratio!

What is a Variable Rate mortgage?

A: Compared to a fixed rate mortgage a variable interest rate 'floats'. Although the mortgage payment amount may stay the same the actual interest charged may change on a monthly basis. A drop in interest rates is great news for you and it will mean that more of your mortgage payment will go towards reducing your mortgage principle. If interest rates rise then less money will be used for reducing your principle and will instead be used for paying higher interest costs. If you think interest rates will fall over the next 3 to 5 years then purchasing a variable mortgage makes a lot of sense. With mortgages you pay a price for certainty. You generally pay more for a fixed rate mortgage because the lender is taking the risk as to what the rates will do by fixing the rate for you. You generally pay less for a variable rate mortgage because it is you that is taking the risk of uncertainty as to how interest rates will move - up or down. With low interest rates variable interest rate mortgages have become popular. Often it is possible to get a rate just over or under the bank prime rate!

Why is a mortgage pre-approval important?

A: Mortgage pre-approval is important for a number of reasons:
It determines the maximum mortgage loan for which you qualify.
It allows your realtor to show you a range of properties in your price range.
It allows your realtor to make a realistic offer on your purchase, and saves time in the negotiation process.
It holds the interest rate for a period of up to 120 days, guarding you against rate fluctuations.
It provides peace of mind during the home-buying process.

How much of a down payment do I need to purchase a new home?

A: The minimum down payment required by the Canada Mortgage and Housing Corporation (CMHC) and Genworth Financial Canada is typically five percent (5%) of the purchase price, however Genworth is now offering a 100% mortgage product that will allow you to purchase that home without your own down payment at fully discounted rates (subject to qualification). Clients who are currently paying large sums in rent and are having difficulty saving the down payment as a result, should consider this option to get into homeownership.

Will I need mortgage insurance?

A: mortgage is a large debt and should be life insured, for your family's peace of mind. Some lenders include life insurance as part of their cost; others will let you insure the mortgage yourself. But Apex Mortgage always recommends mortgage insurance in some form.

What will my insurance fees be?

A: Any purchase where the down payment is less than 20% is considered a high-ratio mortgage, and the mortgage must be insured by the Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada. The insurer will charge a fee for this insurance. The amount of the fee will depend on the amount you are borrowing and the percentage of your own down payment. Typical fees range from 0.5% to 2.9% of the principal amount of your mortgage. This amount can be paid up front or added to the principal portion of your mortgage. One of our Mortgage Specialists can help you determine the exact amount.

What are closing costs?

A: Closing costs are the additional fees associated with the purchase of your home that are in addition to the actual purchase price, such as legal fees and disbursements, land transfer taxes and moving expenses. For CMHC (Canada Mortgage and Housing Corporation) and Genworth Financial Canada insured mortgages and Home Equity Lines of Credit (HELOC), you must also provide evidence of available cash for closing costs equal to 1.5% of the purchase price. These funds may be borrowed and repaid over a period of 12 months.