Little Facts, Large Impact As Regards Your Mortgage Investment Transaction
By Anthony Harte, New Dream Homes and Condos
Payment frequency
You have had and maintained credit, so an optional repayment term on your loan or pending mortgage is not a new experience. However, often people do not fully understand or take advantage of this very common privilege.
Keeping it simple, the goal is to get out of debt as quickly and as easily as possible. In the case of one mortgagor (responsible party), whether you are paid weekly, biweekly, bimonthly or monthly, choose a payment frequency that corresponds with your pay period. The withdrawal will be routine and unnoticeable, similar to the taxes withheld by your company.
In the case of two mortgagors /covenants, whether partner’s or otherwise, attempt to use one person’s salary, coordinating the payment with his/her payment schedule. If it is not possible because there are two, three or more incomes needed to pay the mortgage, then it is easiest for all parties involved to register with one institution (bank, credit union, etc.). Using one account for mortgage repayment, have the institution set up a monthly automatic transfer from the other accounts to the selected repayment account. Unless all parties have the same pay period, select monthly as the payment option for this or similar case scenarios.
Interest adjustment date
Closing date, interest adjustment and maturity date are among many new catchphrases picked up during the course of your new home purchase or existing home refinance. The closing date is the date that the mortgage is registered and if applicable, in the case of a purchase, the title/deed of land is transferred into your name. It is the day you become legally and financially liable for the mortgage and also entitled to the benefits of the property or investment loan.
Typically, you will be provided the keys, where appropriate, on the closing day. The interest adjustment date is a date that is selected by you (the mortgagor) to make convenient the repayment of the loan, typically used to synchronize the mortgage repayment date with the mortgagor’s pay/income frequency. The mortgagor will be charged a per diem (daily) interest rate from the closing date up until the selected I.A.D. (interest adjustment date). This money will be required at or on the closing date. Your mortgage maturity date is directly related to the interest adjustment date, such that your term begins at the interest adjustment date and ends at the maturity date.
Incidentals required for closing
The Registration of utilities and/or applicable home services, whether purchasing or refinancing a home, is important. The following services may need to be transferred or registered at mortgage closing:
• Electricity/hydro
• Water
• Gas services
Historically, a task facilitated by the solicitor, a purchaser should ensure that the utilities have been updated and/or registered as appropriate. Home or fire insurance, as it is commonly called, is a necessity to close a mortgage transaction. In both a purchase or in the case of a refinance or otherwise mortgage, it is paramount to update or register the lender as loss payee and to also acquire the appropriate insurance binder information.
Locating competitive insurance rates is the responsibility of the mortgagor, but team members will be able to refer you to an insurance broker. Telephone services are the last concern in the entire transaction, but fairly important as you remain liable for, or without service, until such time as you update or make them aware of your needs!
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Contact the Jeffrey Team for more information - 416-388-1960
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