AM Financial Services Ltd.

Since the borders of Canada and the United States bind us together as neighbors it has become increasingly popular over the years to purchase either a secondary or vacation home in each of the countries respectively. Many snowbirds enjoy the balmy temperatures of the southern states while many Americans enjoy the snowy Canadian Rockies.

Generally it is a pleasant surprise for US applicants to discover how simple and speedy the process of obtaining a mortgage loan can be in Canada. Many mortgage applications can be approved within 48 hours, subject to an appraisal, which may take an additional few days depending on access to the property. Furthermore, the cost of obtaining a mortgage in Canada is minimal in comparison. There are no up-front application fees, brokerage fees or points being charged, that is, unless there are unusual circumstances with either the applicant or the property.

Canadian mortgageS are based on a 10-35 year amortization period however, the amortization is then broken down into terms, which represents the period of time the interest rate is guaranteed. Terms vary from 6 months to 10 years. We have both closed fixed rates, variable rates and open terms. Fixed rates have applicable penalties attached to them with regards to an early repayment, such penalties can be significant since it can be based on interest lost by the lender forthe remaining term of the mortgage. Once the term is up, then the mortgage can be paid in full with no penalties.

US mortgages offer the option to lock in for as long as 30 years or even 40 years at a specified interest rate, and these mortgages are fully open for repayment or renegotiation by the borrower at any time without any penalty. However, the initial set up costs for obtaining either a new mortgage or negotiating the rate on an existing mortgage can be significant. The brokerage fees or points as they are often called are charged by either the mortgage broker or the lender, depending on the origination of the application, and can be paid upfront or converted into the interest rate charged on the mortgage.