Due to its size and duration, a mortgage is one of the most significant loans you will ever take. Because of this significance, it is important that you consider some factors before taking out a mortgage.
The following are some of the key factors you need to consider before taking out that mortgage…
The Interest Rate on the Mortgage
The rate of interest on a mortgage varies from one lender to another. This makes a big difference in how much you pay each month (the rate of interest affects the monthly payment due).
Before taking out a mortgage, shop around to compare the best mortgage rates charged by different lenders. If you don’t have the time and budget to shop around, consider hiring the services of Ontario mortgage brokers.
NB: Look beyond the initial interest rate – this interest may include hefty fees payable.
The Associated Costs
Before taking out a mortgage, always consider all the associated costs and fees. Shop around and settle for the lender with the least amount of associated costs. Again, you can save time and money by using the services of a mortgage broker.
Consider the legal costs, valuation costs, arrangement fees, and mortgage broker fees among other mortgage costs.
The Mortgage Amount You Can Afford
Another thing you need to look at before taking out a mortgage is – how much house you can afford.
Before accepting you, the lender will assess your ability to repay the loan, loan interest and all the associated fees. He will only lend you what he believes you can repay.
Ask yourself the following questions: Can I afford the monthly installments? Can I afford the substantial deposit required?
How Portable is the Mortgage
Before taking out a mortgage, ask yourself how portable it is. A portable mortgage lets you keep the mortgage with the same lender when you relocate.
If you happen to move before the loan is fully paid back, a portable mortgage will save you money.
Consider the insurance policies you are required to take out. The following are some examples of mortgage related policies. To understand all the insurance policies lenders in Canada will require that you to take out, liaise with Ontario mortgage brokers.
- To ensure their security is protected, most lenders will require you take out a home buildings insurance policy.
- Another policy you’re required to take out is the life insurance for all the mortgage holders. This cover ensures the mortgage is fully repaid in the event of death.
- Yet another policy you are required to take out is the mortgage payment protection, which ensures that you can continue repayments in the event of sickness, unemployment or redundancy.
Contact the professionals at the Oakville Mortgage Team to get great mortgage rates and professional advice.