If you are a first-time homebuyer, there are a few things you need to be aware of in the mortgage world before you begin your Hamilton mortgage application. So, to help you get started, our team at Mission 35 Mortgages have provided the top 5 mortgage myths and debunked them.
#1. The Maximum Amortization Period Is 30 Years
Although a 25-year and 30-year mortgage are the most popular choices in Canada, you can also obtain a 35-year or a 40-year mortgage. To do so, you will need to have paid at least 20% of your down payment on any uninsured loan, then you will be able to apply for a mortgage that has an amortization period greater than 30 years.
#2. A 5% Down Payment Is Required and Cannot Be Borrowed
Although you do have to pay at least 5% towards your down payment in order to be approved for a Hamilton mortgage, you are able to receive this amount through a cash-back mortgage. A cash-back mortgage is a loan where the borrower can receive 5% cash back once their loan has been approved. The homebuyer can then use this amount to pay for their down payment.
#3. Canadian Mortgages Are Not Tax Deductible
You can take out a second mortgage on your home and use this money to pay for an investment or business property. You could even buy yourself a vacation home and when not in use, you can put that property up for rent. In Canada, you are able to deduct mortgage interest on investment or business properties, therefore, you could be reaping the tax benefits on an investment property while also enjoying a vacation home for you and your family.
#4. Mortgage Brokers Are Expensive
Mortgage brokers actually do not charge a fee for their services. In fact, all their services are done for free since they do not get paid until a loan is agreed upon and signed for. Therefore, if you are working with a broker and are unhappy with their services, you can choose to work with another Hamilton mortgage broker without having to pay your original broker a fee.
#5. My Personal Bank Will Offer Me The Lowest Rates
Banks are actually more likely to offer you a higher rate than a mortgage broker because the banks take advantage of their customers. Since you already give them your business, these bankers know you are more likely to agree to a higher rate because you are loyal to the company. Do not fall for this trick and instead, shop around compare different rates before you agree to work with your current bank.
For more information on top Canadian mortgage myths, or to get started on your Hamilton mortgage application today, please contact the Mission 35 Mortgages Team at 905-574-5255.