Mortgage Issues/Advice needed

amother

Sun, Jan 28 2007, 3:14 am

Initialy, 2 half years ago, we wanted to buy our own home.
We were concerned that our T4 (Tax report showing how much we make a year- hubby is self employed and it did not look great to put it mildly)
was not good enough to get a nice mortgage with good terms.
My parents offered to use their bank, negotiate a deal with good terms, for us, however the catch was that my father would be placed as a co owner of our house. My parents asked the bank to make him a gaurenteer instead however the bank wanted coowner. At that stage we didnt care (my parents truly wanted to help ). We did not get involved in negotiating with them directly, left it all to my folks,we simply pay every month the mortgage.
We have a locked for 3 years 25 year term 4.75 mortgage. Its now coming to an end in August and ofcourse renegotiation time comes up.

We want to sell our home before the term ends, in a couple months IY"H.
Does anyone know if we incure penalties if our terms end prematurely due to sale since we are locked until August?
I understand if we change banks we incur penalties while we are still locked with this one, however if we sell whats the story?
Further we dont only want to sell but we want to buy another home that would involve a reasonably higher mortgage ($150 000 more to an already 300 000 mortgage)
I guess the question is either we try to negotiate with the same bank better terms for a higher mortgage or we look for a new morgage at another institution.
Our old bank says we cannot get lower than 5.5% interest now and they cannot make the term more than 30-35 years.
I heard we can get as low as 5.00% for 40 years with some banks, ofcourse I understand this is far more interest in long run but at least its managaeble monthly for the short term.
On an emotional note Im finding my parents being so involved in our mortgage a stress.
My dad is fine but my mom........., she discovered we did not take out life insurance attached to the mortgage because we have pvt life insurance elswhere and she went ballistic. She feels that her security is at stake because my dad is involved, his credit type of thing.
Regardless I need to figure out ways of getting out of this deal, so as to cut these apron strings, give us some independence, too complicated otherwise.
I know Ive posted alot, any info about mortgages here in Canada is appreciated, even arbitrary tidbits?

Marion

Sun, Jan 28 2007, 6:31 am

Is your (or DH's) T4 now showing enough income that you would qualify for a $450,000 mortgage? What percentage of the house is that, and how much of a downpayment do you have? What are your other sources of funding?

You need to find yourself a mortgage broker. If you can PM me your location I'll see who I can recommend to you. A mortgage broker will do all your running for you to the different banks. If they're independant you'll have to foot the bill, but the amount you'll save on the mortgage makes it very worthwhile.