Choosing a Mortgage That is Right for You

What is a mortgage?

When you purchase a home, you may only be able to pay part of the purchase price called the down payment. To pay the outstanding cost you may have to obtain a loan from an institutional or a private lender.

This loan is called a mortgage which is essentially a contract between you and the lender. The loan is secured to your property which gives the lender a right to take your property in case of a default.

Things to consider when obtaining a mortgage:

It is important to understand the options that you are provided with by your lender or mortgage broker. You should examine the mortgage features such as the principal amount, amortization, payment frequency and choose a mortgage that is suitable to your needs. It is recommended that you consult with a real estate lawyer in Mississauga to help you with your choice.

The mortgage term is something important to consider when getting a mortgage. This is basically the length of time for which your mortgage contract is effective. After the term ends, if the borrower is unable to pay the remaining balance in full they must renew their mortgage.

Mortgage term length impacts your interest rate and type of interest available to you such as fixed or variable. It also has an impact on the penalties that you are charged in case you break the mortgage contract. Therefore, it is important to receive advice from a real estate lawyer in Mississauga and not run into issues later on.

When deciding which mortgage to choose, it is important that you discuss the terms and conditions with your lender and/or broker. Be cautious of any expensive fees that your lender might want to charge and be aware that if you put less than twenty percent down payment, Canadian Mortgage and Housing corporation will have to insure your loan, that cost will get passed on to you and might get added to your monthly payments.

Before committing to a mortgage contract try to determine the number of payments to be made during the mortgage term, how much interest and the principal amount you will be paying monthly, total cost of the loan and amortization period. Real Estate lawyers in Mississauga, Brampton and the Greater Toronto Area are available to assist clients in making the correct choices and to protect their interest.