A mortage can be a big commitment, but getting one doesn’t have to be a frightening ordeal. This page will help explain what mortages are, and how we can help you get the best deal. If you still have questions, our Mortgage Specialists are always available to help you. Call us at +1-604-864-4222.
Most people do not pay the entire cost of a home with cash up front – people arrange for a “mortgage” instead. A mortgage is a loan for which you put up the property you are buying as collateral (technically, a mortgage is the document you take to the Land Titles Office as proof of the loan, but we’ll use it with its broader meaning).
Mortgages are amortized loans. Most mortgages have an amortization (the time it takes to pay off the loan and interest) of 25 years, though some can be amortized in as few as 5 years or in as many as 40 years. Over a long period of time, even a small difference in interest rate can make a huge difference in the end. That’s why you want to find the lowest rate possible – saving even just a fraction of a percentage point can help.
Separate from amortization is the term of the loan. That’s how long the interest rate is guaranteed. At the end of the term, you need to negotiate a new mortgage for the outstanding part of the loan. Generally, shorter terms offer lower rates, but you run the risk of having to renegotiate at a time when interest rates could be on the climb. Conversely, longer terms may carry slightly higher interest rates, but they can give you peace of mind if rates go up.
In addition to the interest rate, there are other features to look for when getting a mortgage. For example, will you be allowed to skip a payment if you need the money for something else? What about penalties for prepayment (paying off a mortgage before its amortization)? Will your mortgage be portable (can you transfer it to a new property)? Consider the features that each lender offers.
Generally, you will have to make a down payment on any property for which you want to get a mortgage. With less than 20% down payment, you’ll need mortgage insurance. However, you can now buy a home with as little as 0% down. Go to the CMHC or Genworth Websites for more information.
We are here to help you get the best deal on your mortgage. Of course, our Mortgage Specialists are always available to help you. Call us at +1-604-864-4222.