mortgage & payments
- The balance of the property purchase price must be paid in Canadian Funds by certified cheque or bank draft.
- Exchange rates fluctuate, and lending institutions in the U.S. and Canada may offer different exchange rates or offer different exchange rates for buying and selling Canadian dollars, or offer different rates depending on the dollar amount involved. The exchange rate of the transaction should be settled prior to the actual completion date.
- We utilize the services of Custom House Currency Exchange (www.customhouse.com, 1-800-350-6001). In our experience, they provide prompt wiring service from your U.S. account as well as competitive exchange rates.
- It is possible to wire funds directly to your solicitor’s trust account, but you should allow sufficient time for the funds to actually appear in the trust account and thus be available for the closing.
- It is recommended that the purchaser open a bank account in Canada in order to facilitate payment (in Canadian funds) of ongoing expenses and to receive revenue from rental of the property.
- Completion- Time is of the essence!
- Completing the purchase transaction on the designated completion date is critical in British Columbia.
- If the transaction is not completed on the designated date, the vendor of the property has the option to cancel the contract of Purchase and Sale and is entitled to retain the deposit paid by the purchaser.
- It is not uncommon for vendors who wish to continue with the transaction to demand interest or additional charges for extensions for late completion.
BRITISH COLUMBIA MORTGAGES
Mortgages in British Columbia may differ from those available in other countries in several important ways:
- Mortgages in British Columbia most commonly have a fixed term of between 6 months and 5 years.
- At the end of a mortgage term, the interest rate is renegotiated.
- Mortgages which float with the Canadian prime rate are also available.
- Both fixed and variable rate mortgages generally allow limited pre-payments per year. The amount of the annual pre-payment will vary depending on the mortgage lender but is generally between 10% and 20% per year.
- If your mortgage is not an open mortgage then if you wish to re-pay more than the annual prepayment amount set out above, you will generally pay a penalty to the lender. The penalties are usually 3 months interest or the interest rate differential, whichever is greater.
chronology of execution of mortgage documents
- The borrower signs a commitment letter with the lender.
- The lender instructs a lawyer or notary to draw the mortgage security.
- The documents are couriered or emailed to the borrower for execution in the presence of a notary public.
- The Land Title Office will not always accept faxed documents, so sufficient time must be allowed for the borrower to receive, execute and courier the documents back to Vancouver for filing in the Vancouver Land Title Office on the completion date.