Getting A Mortgage

Step 1: Self-Assessment

In order to apply for a mortgage, it’s always best practice to assess your financial situation first. Simply put, you need to know how much money you have and how much you will need to borrow. In order to see what type of mortgage you can afford, a good place to start is our mortgage calculator. It’s important to factor in all the future costs now, in order to avoid any unwanted surprises down the line.

Step 2: Choosing Your Mortgage Program

There are many dream homes for sale in Greater Sudbury Area. There are also many different mortgage plans in Canada you can choose. Here, we will go over the four types of Canadian mortgage types.

a) Fixed Rate Mortgages
Fixed Rate mortgages can last typically anywhere from 1 to 10 years. For the agreed upon term, all monthly payments and interest rates will remain the same.

You should consider a fixed rate mortgage if you:

  • Are going to reside in the home for more than 5 years.
  • Prefer the stability involved in fixed interest payments.
  • Are opposed to the risk of a future increase in monthly payments.
  • Believe your income and spending habits will remain steady.

b) Adjustable Rate Mortgages (ARM)
The average Adjustable Rate Mortgage (ARM) will last anywhere from 3 to 5 years. The main difference between an ARM and a fixed rate mortgage is how the interest rate on the loan can fluctuate up or down over the course of the loan.

An ARM appeals to those who:

  • Are planning to reside in the home for more than 5 years
  • Forsee and increased income in the future.
  • Are comfortable with the possibility of fluctuating monthly payments

c) Combination Rate Mortgages
A Combination Rate Mortgage involves the combination of both adjustable interest rates as well as fixed
interest rates.

Combination Rate Mortgages are ideal for those who:

  • Prefer to manage their interest rate risk
  • Are comfortable with the possibility of fluctuating monthly payments
  • Elect to take advantage of long as well as short term rates
  • Prefer the stability involved with fixed interest payments

d) Line Of Credit
Taking out a line of credit to finance home purchases has become more of a trend. Borrowers pay interest only on the money they spend. Using this method to secure a down payment can be risky, so it’s important you have a solid repayment strategy in place.

Step 3: Mortgage Submission and Approval

After selecting the type of mortgage you prefer you and your mortgage broker will send your mortgage application to be processed. Once you’ve received confirmation, it is then time to review your commitment to the mortgage.

Have questions about arranging financing? Please submit the form below or call or email me.

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