Thinking about buying a new piece of St. Catharines Ontario real estate? If so, you are probably going to have to take out a mortgage. There are a lot of pieces of information you need to process before you take out that mortgage loan, and waiting until you walk into the offices of mortgage brokers in Toronto will mean you probably won't get the best deal. Understanding your options beforehand can really help you save money and weigh the merits and drawbacks of different mortgages. To start out, you will need to know the different mortgage types.
Fixed rate or variable mortgages
One of the main dividing lines between mortgage types is what the interest is based on. When you buy a Toronto townhome or St. Catharines condo with a fixed rate mortgage, you are locked into one interest rate for the entire mortgage period. If interest rates fall, you will be paying more than other people. If they rise, however, you will be paying less. With a variable mortgage, your interest rates are attached to national interest rates; they can and will fluctuate.
Conventional and High Ratio Mortgages
Conventional mortgages are loans that don't go over 75% of the total purchase price of the home you buy. The other 25% is made up of your down payment. A Mississauga real estate agent can tell you that most people opt for high ratio mortgages instead, because not many can afford to save up the $75,000 needed as the last 25% on the average home today. High ratio mortgages are insured by the Canada Mortgage and Housing Corporation and can be renegotiated even in term.
Closed or Open mortgages
Lenders love to make money off of mortgages, and they don't want you paying them off early and thus getting out of the extra interest charges. An Oakville real estate agent can tell you that open mortgages can be paid off at any time, without penalty, but the interest charges are usually a bit higher than closed mortgages. With a closed mortgage you do have the ability to make extra payments, though, and often well above what most people could actually pay in a given year. However, if you are planning on selling the house soon, an open mortgage may be the option which will save you money.
Make sure to choose the type of mortgage you want even before you start perusing the Sutton listings for the perfect house. It can help you set your budget and your goals, and save a lot of time as well.
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