Preparing For Your First Mortgage

Four steps to take when preparing for your first mortgage. 

Step One: Know What You Want

Should your mortgage be fixed or variable?

  • Fixed Mortgage Rate:
    Enables you to “lock in” a predetermined rate for a set period of time (term). 

  • Variable Mortgage Rate:
    Changes monthly based on the mortgage lender’s prime rate.  Anyone taking on a variable Canadian mortgage rate needs to be able to handle changes to their monthly payments.

Open or Closed Mortgage?

If you're not prepared to pay a large lump sum in the coming future, generally a closed mortgage would be the best choice for you.

Open Mortgage:

An open mortgage is a flexible option that allows you to make large payments or pay off the entire mortgage without a penalty.  Open mortgage rates are higher than closed mortgage rates. This type of mortgage enables you to pay off large lump sums before the end of the mortgage term.

Closed Mortgage:

Few people require the flexibility to pay off their best mortgage rate before the end of the term. If you have a closed mortgage you will be penalized if you pay off the loan early and the charge can be quite large.

Step Two: Knowledge is Power!

Researching the best rates can save you money on your low mortgage rate. 

Step Three: Talk to a Mortgage Broker

They can help you to determine what you can afford, what your options are, and guide you through the process.

Step Four: Negotiate Your Mortgage

Once you’ve prepared, you’re ready to put your mortgage broker to work negotiating a rate. 

Take the first step towards homeownership now. Get pre-approved for a low mortgage rate.

 

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