Nina Afletunova
(647) 230-6200 |
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| maximum mortgage |
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Beware of Predatory Lenders
Most lenders have the customers’ best interest at heart. When a lender takes advantage of a customer by preying on their emotions and lack of industry knowledge they are considered predatory lenders.
Predatory lending practices can include:
- Approving a loan without knowledge of the borrower’s ability to make the payments.
- Refinancing over and over again, charging closing costs and points. This is called churning and is not advisable
- Cross selling additional products perceived as required.
- Knowingly closing a loan at a higher rate of interest, or charge additional closing costs when the borrower could be offered a better rate and fewer fees with the same mortgage company.
- Lender threats
Unfortunately, the burden falls upon the borrower to determine if the lender is a predatory lender. You must become knowledgeable. Predatory lenders may make you feel this is the best you can expect. Don’t take their advice. Do your homework and ensure you get another quote. When at the closing, if the charges increase over what you have been quoted, delay the closing. It could take years to recapture the additional fees that traditionally will go to the loan officer and his company.
Avoid Borrowing Mistakes:
- Shop around: Visit with a number of lenders and get the best loan for your situation.
- Understand the loan terms: Look at the various rates and compare terms with each lender. Seek competent, disinterested advice if you do not understand what is being presented or proposed.
- Prepayment Penalties: Prepayment penalties are up to you to and not a last minute requirement. Learn as much as you can about the particular loan product. Say NO to easy money. Beware if someone tells you your credit problems won't affect your interest rate.
- Ensure accuracy at closing: Know what you agreed upon at application and even take the settlement cost estimate with you. Do not become involved in falsification of any kind with your loan documents.
- Only sign completed documents: Ensure all the blanks are completed. If they are not, ask the closer to draw a line through the form and be sure you receive a copy when you leave the closing. If necessary, wait to receive the copies.
- Protect your equity: Consider your home equity as your future wealth. Avoid using equity for paying debts and closing costs. This will only reduce your equity and set your wealth building back years.
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| Land Transfer Tax (Ontario, Residential) |
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The Government of Ontario applies a Land Transfer tax for land that is
being transferred from one owner to another.
- The first $55,000 of the purchase price is taxed at a rate of 0.5%
- From $55,000 up to and including $250,000 is taxed at an additional rate of 1.0%.
- $250,000 up to and including $400,000 is taxed at an additional rate of 1.5%.
- over $400,000 on one- or two-family residential properties is taxed at an additional rate of 2%.
Note: This amount is not applicable to industrial or commercial properties.
The tax rate is 1.5% for a purchase price above $250,000.
This amount is payable by the purchaser upon registration of the Transfer/Deed.
If a first-time purchaser is buying a new home from a registered builder, the first $2,000 in provincial Land Transfer tax is waived.
City of Toronto Land Transfer Tax, starting 2008, is in addition.
- Purchase price x 0.5 % on the first $55,000
- Purchase price x 1.0 % on the next $345,000
- Purchase price x 2% on the entire portion over $400,000
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