Budgeting For A Mortgage

When budgeting for a mortgage, a lender will usually account for up to 1.5% of the purchase price for closing costs to the borrower. This includes expenses such as appraisal fees, property taxes, home inspection fees, property transfer tax, legal fees, and moving expenses.

You may also want to consider a number of insurance policies as part of your borrowing costs:

  1. Mortgage loan insurance is for high ratio mortgages. This amount is usually added to the mortgage loan by the lender as additional borrowed funds.
  2. Mortgage insurance will protect you against your mortgage in case of death, accident or illness. The Mortgage Group is partnered with Premium Services Group and offers mortgage insurance with any of the mortgage products we offer.
  3. Title Insurance protects against title risks, such as title fraud for the duration you own your home.
  4. Property Insurance is for the protection of your home from things like fire, floods, earthquakes, and break-ins. In most cases, property insurance is a contractual obligation from the lender for the borrower to fulfill. This gives the lender extra protection against potential mortgage default that may occur due to unforeseen circumstances.

Minimizing Costs of Borrowing

  1. Make more payments. Pay biweekly, weekly, accelerated weekly or accelerated bi-weekly instead of monthly.
  2. Put down the largest down payment you can afford, as it will reduce the length of time to repay.
  3. When renewing, and interests rates are lower than your previous mortgage, keep your payments the same, therefore applying more to the principal.
  4. Maximize your lump sum payment option each year.
  5. Double your payments when and where possible.
  6. Choose a shorter amortization period.

Through my mortgage broker network, I will find the best mortgage suited to your personal budget.

For more information about budgeting for your mortgage, please contact me at: paul@paulhudsonmortgages.ca