FrontLine Mortgage Solutions
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FAQ's: FrontLine Mortgage Solutions


1. How much can I afford to pay for a home?
To determine your affordability, you will need to know your gross household income, mortgage interest rate and down payment. You could also be asked about your assets and liabilities. Use this calculator to estimate the maximum mortgage affordability: http://www.cmhc-schl.gc.ca/en/co/buho/buho_007.cfm


2. What is the minimum down payment needed for a home?
A minimum down payment is 5%, subject to certain maximum price restrictions. The 5% must be from your own cash, but lenders will accept gifts from a family member as an acceptable down payment attached with a signed letter by the donor that states it is a genuine gift, not a loan.


3. How can you pay off your mortgage sooner?
There are different ways that can help you pay off your mortgage quicker! Selecting a non-monthly or accelerated payment schedule, Increasing your payment frequency schedule, Making principal prepayments, Making Double-Up Payments, Selecting a shorter amortization at renewal


4. Can you use your RRSP to help you buy your first home?
Most first-time home buyers use their RRSP to help finance a down payment. You can use up to $20,000 according to the federal government Home Buyer's Plan. You have up to 15 years to repay your RRSP.


5. What should the length of my mortgage term be?
The length of mortgage terms can vary from 6 months to 10 years. Keep in mind the shorter the term the lower the interest rate and vice versa.


6. What is a fixed rate mortgage? 
A fixed rate is a pre-determined term, usually between 6 months to 10 years. This offers the security of knowing what you will be paying for the term selected.


7. What is a variable rate mortgage?
A variable rate may fluctuate from month to month depending on market conditions. If prime interest rates go down, more of the payment goes towards reducing the principal and vice versa.


8. What is the difference between Term and Amortization?
A lot of people confuse the difference between "term" and "amortization". The amortization of the mortgage refers to the whole length of time that it will take to pay off the mortgage. The term is the period for which your current payment obligations are valid. A term can range from 6 months to 10 years.


9. Open Mortgages
Allows you to pre-pay all or some of your outstanding mortgage any time, without any penalties. Open mortgages have a 6 months and a 1 year term option with higher interest rates than a closed mortgage.


10. Closed Mortgages
Closed mortgages are offered in terms ranging from 6 months to 10 years. Closed mortgages offer more strict pre-payment options subject to a variety of pre-set regulations.


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