Hi,
I've got a question in the Mortgage approval letter sent to me regarding the actual date the mortgage payment starts and the interest adjustment date.
Closing Date May 3rd 2007.
Interest Adjustment Date June 1, 2007
First Monthly Payment Date July 1, 2007
Shouldn't the first monthly payment date be June 1 2007 ?
Is it a standard that the mortgage payment should start only at the end of the month unlike Rent which you always pay in advance ?
The interest adjustment date - shouldn't that be the same day as closing day ?
Here is how its defn goes.
Interest Adjustment Date
The date that the lender will start collecting interest. Your regular payments will commence one payment period after this date. For example, if you have chosen to make bi-weekly payments, your first payment will come due two weeks after the Interest Adjustment Date. When you sign your mortgage papers the bank will collect from you an "Interest Adjustment" which is a calculation of interest from the Completion Date to the Adjustment Date
Thanks in advance.
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The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
Quote:
Originally posted by JRF
Hi,
I've got a question in the Mortgage approval letter sent to me regarding the actual date the mortgage payment starts and the interest adjustment date.
Closing Date May 3rd 2007.
Interest Adjustment Date June 1, 2007
First Monthly Payment Date July 1, 2007
Shouldn't the first monthly payment date be June 1 2007 ?
Is it a standard that the mortgage payment should start only at the end of the month unlike Rent which you always pay in advance ?
The interest adjustment date - shouldn't that be the same day as closing day ?
Here is how its defn goes.
Interest Adjustment Date
The date that the lender will start collecting interest. Your regular payments will commence one payment period after this date. For example, if you have chosen to make bi-weekly payments, your first payment will come due two weeks after the Interest Adjustment Date. When you sign your mortgage papers the bank will collect from you an "Interest Adjustment" which is a calculation of interest from the Completion Date to the Adjustment Date
Thanks in advance.
The definition of Interest Adjustment date you have given is self-explanatory.
Most financial institutions would like to start the mortgage only from the 1st of the month and hence the need of interest adjustment. And unlike rent the mortgage installment is not payable in advance.
Hence your first payment is due on July 1, 2007.
However, some institutions do not do the adjustment date and in their case your first payment (monthly) would have become due on June 3rd, 2007 and bi-weekly payment would have started from 17th May, 2007.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Pramod Thanks.
I was bit confused between the rental and mortgage installment timeline.
I'm planning to switch to (as I still have time) to bi-weekly with an additional pre-payment.
What happened to the interest rate cut expected around March ? any word ?
Quote:
Originally posted by Pramod Chopra
The definition of Interest Adjustment date you have given is self-explanatory.
Most financial institutions would like to start the mortgage only from the 1st of the month and hence the need of interest adjustment. And unlike rent the mortgage installment is not payable in advance.
Hence your first payment is due on July 1, 2007.
However, some institutions do not do the adjustment date and in their case your first payment (monthly) would have become due on June 3rd, 2007 and bi-weekly payment would have started from 17th May, 2007.
-----------------------------------------------------------------
The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
Quote:
Originally posted by JRF
Pramod Thanks.
I was bit confused between the rental and mortgage installment timeline.
I'm planning to switch to (as I still have time) to bi-weekly with an additional pre-payment.
What happened to the interest rate cut expected around March ? any word ?
Quote:
Originally posted by Pramod Chopra
The definition of Interest Adjustment date you have given is self-explanatory.
Most financial institutions would like to start the mortgage only from the 1st of the month and hence the need of interest adjustment. And unlike rent the mortgage installment is not payable in advance.
Hence your first payment is due on July 1, 2007.
However, some institutions do not do the adjustment date and in their case your first payment (monthly) would have become due on June 3rd, 2007 and bi-weekly payment would have started from 17th May, 2007.
There was no change in Bank of Canada's overnight lending rate and hence no change in Prime rate which means no change in Variable Rate Mortgages. However, the Fixed rate have certainly come down from 5.24% to 5.04% for a 5 year term and may move again before your closing takes place.
Your bank/financial institution should allow you to switch your mortgage payment frequecy any time (before or even after closing) without any problem.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Location: carl sagan's universe
Posted on: 14-03-07 23:11:28
Quote:
Originally posted by JRF
Hi,
I've got a question in the Mortgage approval letter sent to me regarding the actual date the mortgage payment starts and the interest adjustment date.
Closing Date May 3rd 2007.
Interest Adjustment Date June 1, 2007
First Monthly Payment Date July 1, 2007
Which is why I (and I am sure so does Pramod, only he due oversight prob did not mention it, after all there is only so much one can write in replies on the forum. Always best across the table)highly recommend that people go for a late in the month closing date for instance May 28 or later.
That way your interest adj amount will be less on June 1 as it will be calc. from May 28 - May 31 rather than from May 3 - May 31.
Location: carl sagan's universe
Posted on: 14-03-07 23:15:32
Interest rate in Canada was held steady by David Dodge last week. The talk on the street is that there will be no up nor down movements in the near future (next 3 months). All depends on data coming out.
Europe put up its rate, which should mean the Euro will go up using that factor as only criterion. Too many variables in play to say.
Well there were some constraints barring me to close on April and the seller has his own not to wait beyond this. Any how, I've already made my plans to go bi-weekly that should mitigate part of the problem.
Quote:
Originally posted by investpro
Which is why I (and I am sure so does Pramod, only he due oversight prob did not mention it, after all there is only so much one can write in replies on the forum. Always best across the table)highly recommend that people go for a late in the month closing date for instance May 28 or later.
That way your interest adj amount will be less on June 1 as it will be calc. from May 28 - May 31 rather than from May 3 - May 31.
-----------------------------------------------------------------
The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
