Published: April 6, 2016 • Last updated: September 10, 2020 at 14:41 pm
Home Prices Are On The Rise – Affordability is a Big Issue
The thirty-five year amortization period mortgage is a topic that used to attract a lot of inquiries from our website visitors. It makes sense – with home prices climbing so rapidly these days, affordability is becoming a bigger issue than ever.
Unfortunately there are only a couple of lenders who still offer this; and at slightly higher rates. It’s actually been a few years since we recommended one.
You do have to have a down payment of at least 20% – making this a conventional, not a high-ratio mortgage.
Suppose the home you wish to buy costs $600,000. Between your savings and help from the Bank of Mom and Dad, you would need to cobble together a down payment of $120,000 or 20% of the purchase price.
With a thirty-five year am, your biweekly payment would only be around $807! That’s not much at all these days. These mortgages can be used both for purchases AND refinances. But you will not be able to get a thirty-five year am from a bank.
If you can reduce your mortgage payment by ten percent or so, why wouldn’t you?
Last night I received an email from a reader who asked:
“I’m seeking a 35 year amortization mortgage to refinance a $470,000 home at an 80% loan to value ratio ( LTV) in Waterloo, Ontario. I will be buying out my spouse during a divorce. Might there be a mortgage product for me?”
The short answer is yes it is definitely doable, but…
- It depends on your income. Do you make enough verifiable income to meet the debt service ratio requirements for this mortgage?
- It depends on your other monthly obligations – such as a car payment, child support, spousal support, and any other credit/debt scheduled payments etc.
- It depends if you have co-signed for loans, lines of credit, car leases or other properties.
- And it depends on your credit score. The higher your credit score, the higher the lender will allow your debt service ratios.
Why don’t we talk on the telephone and you can fill in some of these details and I can give you a more qualified answer? We can get to the heart of the matter very quickly. If you prefer, let’s meet at our offices in North York and we can do this face to face.