Mortgage Guide: What Your Lender MUST Tell You

The prepayment penalties and privileges section comes to a close with this entry. We’ve talked extensively about what comes after you search all the Windsor homes for sale, view various houses for sale in Windsor or other parts of the Greater Windsor Area, have your Windsor REALTOR® submit an offer and you close on a home. That means it is mortgage bill time. We talked about prepayment penalties for trying to pay it off too quickly as well as prepayment privileges that are afforded to you that allow you to pay more than your monthly payments. All of that information can be confusing but it is important to know. The final entry to this section will cover how exactly you should come to find all of this information out.

As a mortgage purchaser you have certain rights. If your lender is a federally regulated financial institution, such as a bank, they must provide you certain information. Your mortgage contract should have an information box at the beginning of it that states 3 key things.

Prepayment Privileges
1. They must disclose what privileges your contract sets out
Prepayment Penalties
1. They must disclose what penalties exist in the contract
Other Key Details
1. Anything else you must know about your contract

In addition, when it comes to penalties, your lender must tell you how they will calculate your prepayment penalty and they must also tell you what factors they will use to determine the cost of your penalty. Very importantly, all of these details must be clear, simple and not misleading to you.

The most important thing to do is read. Make sure you read your mortgage contract carefully. Make sure you understand all the details about the penalties and privileges BEFORE you sign your contract. Don't be afraid to ask questions. If there is anything you don’t understand, ask for clarification.

Finally, if you feel that a federally regulated financial institution is not respecting your rights, contact the Financial Consumer Agency of Canada. These are your rights, this is your money, protect it.

Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!