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Assume you have a property with an original valuation of $500,000 in 2007.
Existing mortgage facility is $400,000 @ 10% for 20 years, original down payment was $100,000
Mortgage balance is $360,000 in 2012
What is the available equity in 2012 that can be utilized assuming the original value of the property remains the same?
|LTV||Maximum Equity Available|
|Maintains current market value of $500,000.|
|with standard 80%||[80% * $500,000] - $360,000 = $40,000|
If in 2012 the property has increased in value to $560,000, what is the new available equity?
|LTV||Maximum equity available|
|Appreciates to $560,000|
|With standard LTV||[80% * $560,000] - $360,000 = $88,000|
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You can apply for mortgage financing for any of the following purposes
- Purchase of your new home
- Purchase of residential land
- Construction of your home
- Home renovation
- Consolidation of debts
- Medical expenses
- Minimum age: 18 years
- Gainfully employed (salaried / self employed)
- Good credit history
- Total loan / rent payments, inclusive of the proposed mortgage, should not to exceed 40% of your gross income
-The loan must be repaid by government age of retirement, however special conditions apply
- 2 Forms of identification
- Current job letter & 2 recent pay slips / audited financial statements, for the last three (3) years (if self – employed)
Just call us or come in to discuss your request, and receive conditional pre-qualification. Upon submission of all the required documents you will receive final approval and issuance of the Letter of Offer. We will request the necessary searches to be done through our Attorneys after which the deed will be signed and funds disbursed.
It’s that simple! You own your home!
- Facilitates acquisition of a home where the client would otherwise have to utilize savings
- For homeowners, mortgage interest, and property tax may be deducted on annual income tax returns
- Homes typically increase in value over time, building valuable equity for the homeowner which will result in significant benefits including:
1. The equity will typically provide homeowners with a net profit on the sale of their homes
2. Homeowners can increase borrowing power by utilizing equity to finance key needs such as education, home improvement projects or for major purchases, emergencies or investment property
Yes. You may enter a mortgage as an individual or with one or more persons. However, in cases where the mortgage over a couple’s matrimonial home is to be taken, both parties must be joint on the loan.
Yes lump sum payments can be made towards RBC Mortgage loans.
|Type of Payment||Description|
|Partial Prepayment||One (1) annual lump sum payment of up to 10% of the original Loan Amount is permitted. Any partial prepayment in excess of 10% will attract an additional payment of three (3) months interest. |
All prepayments must be made on a regular payment date.
|Full Prepayment (Early Liquidation)||Permitted, provided you make an additional payment of three (3) months interest.|
Making lump sum payments to the mortgage, and specifying that the funds are to be applied to the principal, will reduce the term of the loan. Early re-payment will reduce the amount of interest paid to the bank.
|Mortgage financing amt.||$900,000||$900,000|
|Tenor||25 years||25 years|
|Total number of
|Total interest paid||$881,107.32||$646,631.94|
|Total interest savings||$0.00||$234,475.38|
For mortgage contracts issued prior to 12th December 2012:
There are no penalties for early repayment of a mortgage loan, once you provide notification to the bank of your intent to settle the loan. (Refer to contract for specific notification period).
For mortgage contracts issued after 12th December 2012:
Yes. If you wish to prepay an amount in excess of 10% of the original loan amount or make more than one lump-sum payment over the course of 12 months, you will incur a prepayment charge equal to three months interest. You will also be required to contact your mortgage officer to inform of your intent to settle the loan prior to the payment date.
- Mortgage Indemnity Insurance - in the event that you do not have the standard 20% downpayment, through this type of insurance you can access an additional 10% financing for the purchase of your home.
- Homeowners comprehensive policy is mandatory to cover your investment in the property in event of a loss.
- Life Insurance is highly recommended to protect your family's interest in their home.
- Contractors All Risk Policy (Construction) - to cover risks during construction.
Even if you have not yet made that final decision on your dream home, come in or call one of our friendly and professional Mortgage Specialists, and we can advise you on the amount that you will qualify for, or the steps you need to make the move towards owning your home.
Call our Mortgage Specialists at 625-4RBC(4722) and we will meet you at your convenience.