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Property Page - advice on mortgage, having a mortgage, estate agents and the process of moving home
Property Page - advice on mortgage, having a mortgage, estate agents and the process of moving home
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on mortgage, mortgages, estate agents, moving home...
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Click here to find out about Mortgages and how to apply online
If you are in the market for a mortgage then you probably already know that there is a huge difference between the rates and terms that are offered by each bank. What most people don’t realize is just how much money they can save in interest charges on their mortgage by shaving off even half a percentage point from their interest rate. No one ever signs for a mortgage lightly, but there are a few things to keep in mind before settling on any mortgage. Just like anything else in life, today there are mortgages tailored to fit any budget, personality and lifestyle.
There are short or long term mortgages, fixed or variable mortgages, open or closed mortgages and conventional or high ratio mortgages. Most banks offer all and/or a combination of these different types of mortgages. Most mortgages have terms ranging between six months and ten years. Short term mortgages are generally for two years or less. They are good for people who believe that interest rates will be lower at renewal. Long term mortgages are more appropriate for people who want the security of defined mortgage payment for a long period. Fixed rate mortgages have an interest that will not change over the course of your term. Variable rate mortgages have an interest rate that is set at the bank’s prime rate at the beginning of each month, meaning that the rate will vary from month to month. These mortgages have traditionally cost less over time when interest rates are stable. An open mortgage allows the client to pay off the mortgage at any time without incurring a penalty. They are usually only negotiated for short terms. A closed mortgage is for a fixed term and cannot be paid off until maturity or you will have to pay a penalty. Finally a conventional mortgage is where the buyer puts down at least 25% of the home’s value so that the mortgage is no more than 75%. A high ratio mortgage refers to homes that are bought with a down payment of anywhere from 5-24% of the home’s value. It is important to understand exactly what a mortgage entails before signing any documents. With a little effort you will find the mortgage that is right for you and which provides you with the security, flexibility and peace of mind that is so crucial to such a major purchase.
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