What Happens After Your Mortgage Is Paid Off?

Fixed rate mortgages, variable rates, mortgage terms, payments schedules—these will all be things of the past when your mortgage is paid off. However, you can’t just make your final mortgage payment and forget about it entirely. There are steps to take when finishing paying off your mortgage. So, what happens after your mortgage is finally paid off?

 When Last Payment Is Done

After you’ve made the last payment on your mortgage, you’re still not home free. No matter the type (fixed rate mortgage, variable mortgage, etc.) making the last payment doesn’t clear your debt until the appropriate paperwork is filled out. You’ll also need to pay a discharge fee to the lender to fully rid yourself of the mortgage. The discharge fee removes the legal registration of the burden from the land titles from the lender. Depending on the lender the discharge fee can vary but it’s usually in the $350 range.

There is no law saying you have to pay the discharge fee immediately after making your last mortgage payment but you should do it within months. Without paying the discharge fee you will not be able to sell your home, transfer its title or obtain another mortgage.

Once the Mortgage Has Been Discharged

The lender will send a document to the registry office letting them know that your title is now clean and there is no longer a lien on your property. This means that if you sell your home, all the equity is fully yours. Then, you’ll need to look over your mortgage statement. Fixed rate mortgages, variable mortgages, all mortgages in fact, come with a statement. This is a document that is sent out twice yearly to show the balance, insurance rate, monthly payments and balance of tax account (if the taxes are paid with the loan) of the mortgage. When you receive this statement after making your final mortgage payment make sure it shows zero balance.

You’ll also need to verify that your credit report no longer contains your mortgage. Keep in mind that this could take a few months. Furthermore, if you had mortgage insurance with your loan, this will expire the moment the mortgage is paid off, so you don’t need to worry about it any longer.

The Final Steps

When you’ve paid off your mortgage in full, you are still required to pay property taxes. If your taxes were rolled into your mortgage, you’ll have to call your city and arrange to make the payments on your own. Now, it’s up to you whether you wish to borrow against the home again. You don’t have to take out fixed rate mortgages or traditional mortgages, you can take out a line of credit instead.

source: northwoodmortgage.com

4 Myths About Down Payments

A leading challenge preventing many buyers entering the home ownership marketplace is their misunderstanding on down payments. Many potential buyers feel that the cost of down payments is too high for their budget. This may mean they wait to purchase a property. But by analyzing down payment options, buyers may find they have more flexibility than they first thought on the road to home ownership. In this article, our expert team will highlight four myths of down payments.

Myth 1: A 20% Down Payment is Required

One of the most widely disseminated myths concerning down payments is the idea that a 20% down payment is required to complete a home purchase. This simply isn’t true. Within the current Canadian real estate marketplace, buyers can begin the purchase process with a 5% down payment on their new home. To avoid having to pay insurance fees, a 20% down payment is required, but a 5% down payment can offer many buyers the ideal path to purchasing real estate.

Myth 2: Down Payment Assistance is Only for First-Time Buyers

While there are many marketplace programs designed to help first-time buyers enter the marketplace, there are a multitude of options for all homeowners seeking assistance for their down payment. For example, many local lenders will offer cash-back down payment mortgages, through which they will pay for the 5% down payment and then offer buyers a mortgage directly, to streamline the purchase process.

Myth 3: There are no Local Programs

The Government of Canada has ensured that down payment financing programs are now available to Canadians across the country, with the goal of helping more people find their ideal home. Consider for example, Ontario, which offers residents in the province up-to $60,000 through its CalHome program. The CalHome program offers loans at a 1% interest rate, and the loan is deferred for 30 years, which means buyers are required to pay back the loan plus the interest 30 years after completing the loan paperwork.

Myth 4: It is Too Expensive to Buy in the Marketplace

A common myth in the current Canadian market is that it’s too expensive to buy a home in Canada. This is simply not true, as lenders offer a range of programs to help buyers enter the marketplace and find homes that meet their budgetary parameters. There are many unique paths to homeownership for the proactive and committed buyer.

To uncover more on the myths of down payments in Canadian real estate, contact our mortgage experts directly!

source: northwoodmortgage.com