CANADIAN RELOCATION SYSTEMS
HOUSE AND MORTGAGE

House and Mortgage is a helpful collection of advice that will assist you in making the right decision when purchasing a house.

If you are buying a property ask your human resources representative at your new placement if he/she has a working relationship with a real estate agency or relocation firm. This is an advantage when starting a home search.

You may have the option of working with an assigned agent or deciding to choose an agent of your own. It is always best to work with somebody who is familiar with corporate relocations and can explain the home buying/renting process.

There are many differences between American and Canadian house buying procedures.The main difference, and perhaps the most surprising to Americans, is the non-deductible mortgage payment in Canada.

Homeowners in the U.S. may deduct their mortgage interest payments from their taxable income. This is NOT the case in Canada. Canadians CANNOT deduct their mortgage interest payments from their taxable income.

Mortgage terms are different. In the United States a mortgage is set up with a pre-determined ammortization period, for example 25 years. The interest rate and mortgage payments remain the same for 25 years. In Canada, the mortgage is set up with a pre-determined ammortization period, for example 25 years, but the interest rate is renegotiated during this time period.

This means that a mortgage holder has to renegotiate the terms of the mortgage several times as specified by the financial contract. For example, the Smiths have a $50,000.00 mortgage on their home.The interest rate has been set at 7%, paid annually, for an ammortization period of 25 years, but renewable in 5 years. In five years the Smith’s will have paid off some of the mortgage principal but the remainder will have to be renegotiated at the current interest rates.This creates uncertainty for many homeowners who cannot predict the trend of interest rates.

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