Very Clever Real Estate Investments In The GTA

    "We ONLY Select The Best Investment Properties On The Market Today"

The Mortgage Checklist - Part 7 (Extra Costs)

If you're applying for a mortgage, there are some things you will need to know.  As a result, we have created a mortgage checklist, so you can ask your lender/broker the right questions.  Here is part 7 of 9, featuring questions about the extra costs.

Extra Costs

41. Will you pay my appraisal fee?

Appraisal fees are usually $225 to $325, but can be significantly more based on location and property-type. There is usually no appraisal cost if your mortgage is insured.

42. Do you have any processing fees?

43. Do you have any cancellation fees?

44. How is the mortgage compounded?

Semi-annual compounding costs you less than monthly compounding.

45. Do you charge "reinvestment fees" on top of the penalty if I break my mortgage early?

46. Do I have to pay legal (aka. mortgage registration) fees?

Most lenders cover this cost on switches where the loan amount, loan-to-value and amortization are not increasing.

A few even pay legal fees on refinances, but the rate is often higher than you can get elsewhere.

47. Is the mortgage a "collateral charge" mortgage?

Collateral charges help you avoid paying legal fees to refinance with your lender. But they also make it potentially more expensive to switch institutions at maturity. The reason: most lenders only pay switch fees on "standard charges," not collateral charges.

Some collateral charge lenders register your mortgage for 100 to 125 per cent of your property value. That lets you borrow more if your property value rises. The tradeoff: It prevents you from securing anything else against your property, like a second mortgage.

48. If I switch my mortgage to you, will you pay my old lender's discharge fee?

Very few lenders do this, but it can't hurt to ask.

49. Do I have to pay title insurance if I switch my mortgage to you?

The answer is commonly yes, but some lenders don't require title insurance, or they will pay it for you. It can be $150 to $300 or more.

50. Will I pay a higher rate if I'm self-employed and cannot prove my income in the traditional manner?

51. Does the mortgage come with free banking or significant discounts on other financial products?

Unlike days gone by, you no longer need to bundle financial products to get the market's best mortgage rates. Nor do you need a "special relationship" with your banker. Simply shopping around and negotiating will get you the same mortgage discounts 99 per cent of the time.

52. If I switch lenders and have a mortgage and line of credit, will the lender charge me a separate discharge fee on both the mortgage and line of credit?

53. If I need bridge financing to cover the gap between the purchase of my new home and the sale of my old home, what rate and fees will you charge?

Also ask how long the bridge lasts. 30 days is typical.

54. Will I pay an extra fee if I break my open mortgage within 12 months?