Term Selection Checklist

checklistDeciding what term to pick? At a minimum, you need to answer these questions first:

  1. What is your mortgage amount? (mortgage size impacts rate)
  2. What is your home value? (loan-to-value impacts rate)
  3. Mortgage type? (purchase, switch or refinance)
  4. Occupancy? (owner-occupied or non-owner occupied)
  5. Closing date? (the lowest rates are often for closes within 30 days)
  6. Credit score? (the best rates require 680-720 minimum)
  7. Any missed payments in the last 3 years?
  8. What city and province do you live in?
  9. Is it an easily marketable (salable) property?
  10. Are you a first-time buyer?
  11. How old are you and your family members?
  12. What is your net worth, not including home equity?
  13. Can you prove income in the same job for the last two years?
  14. Are the jobs of all applicants on the mortgage secure?
  15. What is your total debt service ratio (calculate it here using TD’s posted 5-year fixed rate)
  16. If you had to guess, what is the minimum number of years until you might move?
  17. What are the chances you’ll need to refinance before maturity?
  18. Do you have access to cash for at least four months of living expenses?
  19. If interest rates rose four times (1%) in six months, would that cause you stress?
  20. Do you also require a line of credit?
  21. Will you need to prepay the mortgage early? If so, how much and how early?
  22. If your payment increased 20%, what kind of financial stress would that create?
  23. Are you okay with re-applying for a new mortgage every year or two?
  24. What amortization do you prefer? (e.g., 15, 25, 30 years?)
  25. Do you have any other goals or plans that might impact where you live or the mortgage you get?

This is not meant to be a comprehensive list or replace the advice of a professional mortgage planner. But it does cover most of the big term selection factors.