Costs to Consider When Applying for a Mortgage

Aside from the principal and the interest rates, there are other costs that you need to know about when applying for a mortgage. These include mortgage insurance, possible setup fees, and the funds paid before the interest adjustment date.

Mortgage insurance

This is required by lenders when you are not able to make the minimum downpayment of 20-25% of the total home purchase price. Lenders require this to protect themselves against possible loan default. Though mortgage insurance can be provided by the Canada Mortgage and Housing Corporation, it's still an additional cost to your mortgage application.

Possible setup fees

Some lenders also have a fee for the preparation of the mortgage. This will cover administrative fees and other costs that the lender may incur in processing your mortgage loan.

Other possible costs

One possible cost that you can incur is when you use the services of a Grande Prairie mortgage broker. The totals cost would depend on the fees of the broker that you have selected.

Another is when your lender was able to give out cash for the home purchase before your interest adjustment date. If this is the case, you would also need to pay for the interest of the cash advanced for the days before your interest adjustment date.

Other costs that could be included in your mortgage monthly payments are property taxes, or any other statutory fee that is charged during transactions. You need to check whether your lender will include those on your monthly charges.

And if you did select a variable rate mortgage, you would also need to prepare for the possibility of interest rates increasing. That means you would be paying more for your mortgage compared to before. The upside is you might be paying less than before should interest rates go down. Anyway, it would depend on market interest rates values.

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