FAQ: Mortgages

Posted on February 13, 2019

When you’re buying a home you probably have tons of questions. This is one of the biggest investments of your life and understanding the financial side of buying a home is important! Throughout our time in the community we have created many relationships with mortgage brokers and lenders so we can help our clients with every step of the buying process.

A mortgage is a legal agreement in which a property is used as security for the repayment of a loan. Similarly to how other loans work, once the mortgage is fully paid off – and all other terms of the agreement are met- you will own your home outright. But first, you need to understand what a mortgage is and how you can afford it. These frequently asked questions about mortgage payments will help you navigate this exciting next step!

How often will I make mortgage payments?

 Many mortgage payments happen monthly. Accelerating your payments to weekly or bi-weekly will help you pay off your mortgage faster which could help you save on interest. The most important thing to consider when deciding on your mortgage payments is your budget. It’s always nice to pay off a loan as quickly as possible, but if you miss a payment because you have over-extended yourself you could do damage to your credit. 

What charges should I expect to pay?

Some charges may apply to your mortgage if you want to make larger lump sum payments or you break your contract. Life changes such as a death, marital breakdown or relocating for a job could cause these unforeseen charges. Make sure you fully understand your mortgage agreement before signing.

How much do I need for a down payment?

 A down payment is a portion of the price of the property you pay upfront. This amount is not financed by the mortgage. When purchasing a home you must include a minimum of 5% down. However, most down payments are now 20%. If your mortgage payment is less than 20% you will require mortgage default insurance. When the rates and rules change a mortgage you previously qualified for may be completely out of reach. Make sure you stay up to date on these changing rates by speaking with a trusted Real Estate professional. 

Understanding and budgeting for your mortgage is an important step to take before buying a home. A mortgage broker can help you understand your options and answer any questions you may have. Remember there are many different types of mortgages and you need to find the one that is best for you! Whether you are a first time or seasoned buyer you will most likely have a mortgage on your home. With rules and rates constantly changing it is important to stay on top of your options.

We are always here to help and to educate you on exactly where the market is and how you can fit into it! Plus we have tons of mortgage specialists on our side so you know exactly what you’re getting. Have any questions about your current mortgage or obtaining a mortgage for a new home? Contact us and we can put you in touch with the several brokers and lenders we have on our side so you can find an option that works with your lifestyle and budget!

Contact us here for any questions you have about Mortgages.

Shilo Storey with RE/MAX First

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Twitter: @RemaxShilo

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