- Serial number and face values of any Savings Bonds and
other Stocks.
- Credit card references, including account numbers, balances,
etc.
- A list of any debts you have which have a balance. The
name of the creditor, their addresses, telephone number,
account numbers, the monthly payment and balance should
be documented.
- A list of assets including cars, furniture and estimate
of value.
- Name and address of employer(s) for the last two years.
Latest earnings statement or pay vouchers.
- If overtime is a substantial part of gross income, provide
forms for the last two years. Commission sales usually require
two years tax returns.
- If you are self-employed, tax returns for the last two
years will be required, plus profit and loss statements
and balance sheets for the year to date earnings.
- If you presently own or have owned a home in the last
three years, the name and address of the mortgage company
or lending institution, the mortgage loan number and balance
will be required.
- If you are obtaining your equity from the sale of your
previous residence, a copy of your closing statement is
required.
- If you are a landlord, bring a copy of your tenant’s
lease(s) with you to substantiate income derived.
- Any divorce papers and property settlements where property
was involved in a divorce. If alimony or child support is
being used as income to qualify for a loan, provide proof
of amounts received. This is either by copies of cancelled
checks, military allotments or if paid through the court.
- Any bankruptcy judgment papers. Copies of discharge and
original papers filed.
Consider All of the Options Available Before Selecting Your
Mortgage
Purchasing a home will probably be the largest investment
any one of us will make in our lifetime. Considering how very
important this decision is, I am surprised at how often people
base their decision making process on two issues: loan approval
and interest rates. Granted, these two options are important,
but there are other, equally significant options and alternatives
to look at and think about.
Over the past decade, the mortgage industry has gone through
many changes and trying to keep up with these has almost become
a full-time job! I will, however, try to clarify the changes
by reviewing some of the most often selected privileges and
options:
Let’s look at prepayment privileges:
- What percentage of the loan can be repaid each year?
- Is prepayment allowed with or without a penalty?
- Is the percentage of prepayment based on the original
loan amount or on the balance outstanding?
- Will prepayment privileges be granted at any time during
the year or only on the anniversary date?
- Can monthly payments be increased? By how much? How often?
- Can payments be made on a monthly, bi-monthly, or even
weekly schedule?
- Are extra payments allowed at regular intervals?
These are only some of the prepayment options you should
consider before you commit yourself to any one mortgage. There
are three equally important alternatives you should also be
looking at:
AN ASSUMPTION CLAUSE
This allows a subsequent purchaser of your home to assume
the existing financing. This feature is very beneficial when
the property is listed for sale and current interest rates
have been raised even higher than the existing mortgage rate.
A TRANSFERABLE FEATURE
This permits a borrower to transfer the mortgage loan from
the present property to another home of equal or greater value.
In the event the purchaser of your home doesn’t wish
to assume your mortgage, you can keep your preferred rate
and terms by simply transferring the mortgage to your new
home.
A DISCHARGE PROVISION
Is rarely available through institutional lenders. The clause
allows you to repay the loan, in full, at any time before
the maturity date, with a maximum penalty of three months
interest on the outstanding balance. The mortgage lender will
then provide a discharge of the loan. The homeowner regains
free title, which is very important.
Some of these mortgage privileges and options may have a
price attached to them, resulting in a higher interest rate
on your loan. HOWEVER, each option should be carefully considered
in light of an individual’s personal lifestyle.
Always ensure that any options/privileges are stipulated
IN WRITING and that you fully understand the extent of each
and every provision designated. Above all, never forget the
red the fine print before signing on the dotted line, because
once you’ve committed your signature to the document,
you can’t change your actions without a good deal of
time and, most probably, expense.
Mark Bellerdine, Manager
Residential Mortgages
TD Canada Trust
www.tdcanadatrust.com
|
