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Buyers: Financing an Ottawa Condo

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What to do first?

When you commit to buying a new condo, you may require a mortgage to assist you in the financing of your new home. It is very important as a home owner to take all of your income and expenses into consideration and arrange the right mortgage for you and your family. A mortgage broker can eliminate the confusion, help you understand how much you can afford, and help you evaluate all of the mortgage companies to find the best interest rate for your mortgage needs.

It is always a good idea to meet with a mortgage broker to get pre-approved for a certain mortgage amount before you begin your home search. That way, you will be looking for a home that meets your pre-approved mortgage amount.

At the Renaud Otten Team, we have a business directory of highly professional mortgage brokers in the Ottawa area that we would be happy to introduce you to.  Simply call us at 613-288-2455 or toll free at 1-800-341-1590.


Mortgage Calculator 

Are you considering buying a condo, but you are not sure how much your mortgage payments would be?  use the calculator below to see how much of a downpayment will be required and how much your monthly mortgage payments would be.  Simply find a condo that you would like to buy and follow the instructions:

  1. Consult the glossary of mortgage terms below for any terms you would like further clarification on.
  2. Enter appropriate amortization and term periods in years.
  3. Enter the annual interest rate offered by your bank for the selected term.
  4. Enter the price of your selected condo in the "Principal Amount" field.
  5. Enter your downpayment as a percentage.  For example, a CMHC insured mortgage would have a downpayment of 5% and a non-CMHC insured mortgage would have a downpayment of at least 20%.

This calculator calculates U.S. and Canadian monthly mortgage payments based on principal, interest and term. U.S. mortgages are compounded monthly while Canadian mortgages are compounded semi-annually.

Amortization(Years) =
Term (Years) =
Yearly Interest Rate (%) =
Principal Amount ($) =
Downpayment (%) =
Downpayment Required ($) =
Mortgage Principal ($) =
Monthly Payment ($) =
Still Owing at End of Term ($) =

 

Mortgage Terms

There are many terms associated with arranging a mortgage. We have provided an explanation of many of them, so that you are aware of what they are when you meet with your mortgage broker.

Amortization Period - the amount of time that it will take the principal amount of the mortgage, at the current rate of interest, to be repaid in full (usually 20 or 25 years)

Amortization Schedule - a schedule showing each payment to be made under the mortgage for the entire term of the mortgage, how much of each payment is applied to principal and to interest and the balance owing following each payment

Balloon Payment - the final amount of the mortgage that must be repaid to the chargee at the end of the term (this amount may also be renegotiated for another term)

Charge/Mortgage of Land - a document that details the loan given to a land owner and that, once registered, conveys an interest in the land secured by the Charge/Mortgage of Land to the Chargee

Chargee - the bank or other mortgage lender

Chargor - the land owner who has arranged the mortgage (or charge)

Closed Mortgage - a mortgage that cannot be repaid in full prior to the end of the specified term, without payment of a penalty, as determined by the Standard Charge Terms

Discharge - once a mortgage has been paid in full, a discharge is registered against the property, effectively removing the mortgage as an encumbrance against the property

Interest Adjustment Date - Mortgage payments are often arranged for the 1st or 15th of each and every month. When mortgage monies are advanced on a day other than the pre-arranged day for mortgage payments, an adjustment for interest must be made between the day of advance and the day of the pre-arranged payment. This is known as the interest adjustment date.

Interest Rate - annual percentage of the principal amount borrowed that the chargor must repay to the chargee, in exchange for the right to use the principal amount borrowed for a set length of time

Maturity Date - the date on which the balance owing under the mortgage must be either repaid to the chargee or renegotiated for another term

Open Mortgage - a mortgage that can be repaid before the end of the specified term Principal the amount of money borrowed by the chargor (or given by the chargee), which the chargor must pay back to the chargee

Priority - the status of the mortgage (first, second, third, etc.) as determined by the date of registration

Standard Charge Terms - terms that set out the rights and obligations of the chargor and chargee

Term - the length of time that the chargor is entitled to use the mortgage funds, during which time, regular mortgage payments are made and, at the end of which the total balance owing must either be repaid to the chargee or renegotiated for another term (usually anywhere from 6 months to 7 or 10 years)

For more information, contact Ray Otten, Broker, by phone at 613-623-0090, at RE/MAX metro city realty ltd., Brokerage, independently owned and operated.