M3 Group Expands National Bank Partnership to Ontario Jun 16th
How much you need to earn to afford a home in Toronto and the GTA + MORE Mar 22nd
Canadian home sales forecast downgraded—but the market may be turning a corner + MORE Jul 17th
What home buyers should know about the Canadian mortgage stress test + MORE May 28th
How Your Cell Phone Can Keep You From Getting the Lowest Mortgage Rate + MORE Nov 27th
What’s the best mortgage for the first-time home buyer?
– moneysense.ca
Image courtesy of ddpavumba / FreeDigitalPhotos.netQ: I’m buying my first home—a starter home—that I plan to live in for the next five to seven years. How do I know which mortgage is right for me?
— Housing Newbie, Toronto
Answer from Robert McLister, mortgage planner with Ratespy: There are endless mortgages to choose from so get one-one-one advice when you can. In the meantime, here are four quick tips:
#1. If you plan to live in the home for five-plus years, then portability (i.e., being able to move the mortgage to a new property without penalty) is less important. But people’s plans change so don’t ignore porting features altogether. The best portability options afford you:
→ The lender’s best rates if you need to add money to the mortgage (helpful if you upgrade to a more expensive home)
→ More time to close your new mortgage after your old home sells (look for 60 days minimum).
#2. If you don’t foresee moving, refinancing or making big prepayments in the next five years, consider low-frills mortgages…
Are Sell and Leaseback Programs a Good Option for Boomers?
– ratesupermarket.ca
Rising home prices often mean that real estate forms a top-heavy portion of many seniors’ wealth in retirement. This forces some to tap into their home equity in order to pay the bills and overcome their past failure to save.
Until recently, their only choice was a reverse mortgage, a secured loan in which lenders like HomEquity Bank make monthly payments to them, based on the equity that they’ve built up over the years, rather than the other way around.
Related Read: Case Study – Should These Boomers Get a Reverse Mortgage?
Reverse Mortgages An Expensive Option
One major attraction of this arrangement is that the payments you receive aren’t considered taxable income and thus won’t affect your potential government retirement benefits.
A common criticism of reverse mortgages is that they’re expensive, resulting in the view that they should only be used as a last resort. And the certainly are, compared to more common mortgage loans. But the ability to stay in the family home this way is really a bit of a luxury, argue plan sponsors, and having someone else assume some or all of the appreciation risk ought to cost something…
