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Whether you are considering to buy an investment property or choosing to own your dream home understanding your mortgage is very important as not only can you been in distress with one wrong decision, but also could pay less if you choose wisely and cherish the biggest decision in your life to be fruitful!
Mortgage in layman terms is the loan a buyer requests from a bank in order to purchase a property. The bank generally processes the information of the prospective buyer (lender) income, credit score and debt if any applicable to consider the loan for a requested amount.
Fixed Costs: It is important to consider your fixed costs it could be as basic as weekly grocery, car payments etc. Considering these costs is crucial as before you make a decide to spend money it is wise to understand how your decision to seek mortgage is going to impact.
Monthly Costs: Generallywhen you decide to seek a mortgage always make sure the costs are estimated below 30% of your monthly gross income. These costs include the tax of the property, hydro and heating bills.
Affordability: Always keep this on the priority list when considering to take mortgage and make a list of the payments that you make to find if you can really afford a mortgage. As a measurement all the payments you make must be less than 40% of your monthly income.
Paying: Once the decision is made and you have received the mortgage the next challenging aspect is making payments on time. Make sure you understand the rate of interest, the payment schedule and your amortization period, which is the amount of time you’ve selected to pay back the mortgage (usually ranging from 15-25 years).
Interest Rate: The rate of interest is the price to choose to pay off your mortgage varies sometimes this may be fixed and may not change irrespective of the market changes. However variable interest changes depending on the market status.
Once you understand all the key aspects not only are you prepared to seek mortgage and successfully pay it off. If you do need assistance always seek professional help from mortgage brokers and financial advisors. Don't forget check our mortgage calculator