Whether you’re a first-time home buyer or an experienced homeowner, a London Life mortgage planning specialist can help you find the mortgage that’s in line with your current and future financial goals. That’s because mortgage planning specialists are skilled communicators and organizers who will work with you to learn more about your specific financial needs.
How a mortgage planning specialist complements a financial security advisor
Financial security advisors and mortgage planning specialists offer unique perspectives and operate in different but complementary areas. While a financial security advisor can advise on mutual funds, segregated funds, income products and insurance, a mortgage planning specialist focuses on mortgage financing options, including home equity lines of credit and loans.
In essence, a financial security advisor can help with your overall financial situation, while a mortgage planning specialist concentrates on your specific mortgage needs and can help you better understand the Canadian housing market. Together, they’re a powerful team that’s committed to helping you achieve your financial security goals.
Finding the mortgage that works for you
One of the first questions a mortgage planning specialist can help you answer is, “should I get an open or closed mortgage?” An open mortgage will let you pay off your mortgage at any time without incurring some kind of penalty. In comparison, a closed mortgage will require you to follow a pre-determined payment schedule.
Once that decision is out of the way, you’ll need to figure out if you’d like a fixed- or variable-rate mortgage. In general, a fixed-rate mortgage will keep your interest rate the same, no matter how the markets fluctuate. A variable-rate mortgage, meanwhile, can see your interest rate change over time.
Depending on your long-term goals and financial situation, you may be surprised to learn that the right mortgage for you may not be a mortgage at all. If you have 20% or more equity in your home, a Solutions BankingTM All-in-One account may serve you better. A mortgage planning specialist can work with you to help you determine the right fit.
A mortgage planning specialist can explain these mortgage types in greater detail while helping you understand which ones make the most sense for your specific financial situation.
Understanding the down payment and amortization period
Buying a home requires making a down payment, a sign of your commitment to the sale. But if you can’t put down more than 20% of the value of the home, you’ll need to acquire mortgage loan insurance, which essentially protects the bank in the event you’re unable to make your mortgage payments. A mortgage that requires this type of protection is known as a high-ratio mortgage.
Your amortization period is the length of time you expect it will take for you to pay off your mortgage. Keep in mind that, while you can give yourself up to 25 years to pay off your mortgage, the shorter the term, the less interest you’ll pay.
A mortgage planning specialist can show you the impact of lengthening or shortening your amortization period – an important step in determining your monthly mortgage payments. They can also show you the financial impact of pursuing a traditional mortgage (over 20% down payment) versus getting a high-ratio mortgage.
Understanding mortgage regulations
Mortgages are complicated. They’re also highly fluid, with changes regularly introduced through adjustments to government regulations. Unless you work in the mortgage industry, you’d be hard-pressed to keep up with the activities of the regulatory bodies responsible for maintaining rules governing mortgages, such as the Office of the Superintendent of Financial Institutions (OSFI).*
That’s where a mortgage planning specialist can be a huge help. It’s their job to follow changes in the industry and clearly communicate those changes to their clients. In essence, if something happens to affect the Canadian mortgage market, your mortgage planning specialist will be able to explain how it impacts you.
Talk to your financial security advisor
To get in touch with a London Life mortgage planning specialist, speak with a financial security advisor with Freedom 55 Financial. They’ll be able to recommend a knowledgeable and experienced mortgage planning specialist in your area.
* Armina Ligaya, “Stricter mortgage regulations to be finalized,” TheStar.com, Oct. 3, 2017.