Which Mortgage is Right for You?

If you are looking to buy a home in Toronto, or any other area of your choice, and require a mortgage, there are many types of mortgages available for you. As a buyer, choosing the right mortgage is important.This choice can impact your monthly payments and the value of your investment. Here are four considerations you should keep in mind when choosing a mortgage: 

  1. How long do you plan to stay in this home?
    The length of time you will be in the home will be a significant factor in determining which loan is right for you. If you plan on staying in the home for 7 years or less, you should consider an adjustable rate loan, but if you plan on staying for 20-30 years, then a fixed rate mortgage is better for you.
  2. How much risk are you willing to accept
    If knowing the exact amount you'll be paying each month is important for you, then a fixed rate mortgage is right for you- but this will mean a higher interest rate. If you are willing to take some risk of fluctuations in the interest rate, you may be able to receive a lower interest rate.
  3. How much can you afford
    Once you find a home which you love, start to crunch the numbers. Ask yourself- "Can I afford the mortgage payments?" "Am I willing to cut expenses and save every month?". Make sure to choose the mortgage plan with a monthly payment which fits in your budget.
  4. How much cash do you have available for upfront costs?
    If possible, you may want to make a larger down payment to lower your monthly payment, but if you pay a higher monthly payment, you may be able to pay back the loan at a quicker rate.

    ***Do keep in mind that you will have additional costs to pay. You may also need to accept a higher monthly rate to lower the down payment, or lower your monthly obligation by choosing an adjustable rate mortgage. 

                                                             

Sudha Verma

Sudha Verma

Broker
CENTURY 21 Leading Edge Realty Inc., Brokerage*
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