Want to know more about some of the most frequently asked mortgage questions? Below, you will find a list of commonly asked mortgage questions along with more information about each. It is our hope that this information helps you make the most educated decision possible about your home financing:
Question #1 – What kind of credit do I need to get a mortgage?
The answer to this question will depend on a number of different factors. The amount of your mortgage, and the interest rate you qualify for, can both be affected by your credit score.
You may be able to get approved for a mortgage, even with a less than average credit score, if you have a large down payment or if you are willing to accept certain terms for your loan. These would include a higher interest rate, mortgage insurance and/or a smaller mortgage amount.
Question #2 – What down payment is required to get a mortgage?
Throughout Canada, the minimum down payment to obtain a mortgage is 5%, meaning that for a home with a purchase price of $200,000, you may be able to obtain a mortgage with as little as $10,000 down, assuming you meet all other eligibility requirements.
It is important to note though, that if your down payment is less than 20% you will be required to purchase mortgage default insurance.
Question #3 – Will my interest rate change?
Similarly, to question number one, the answer to this question also depends on a few different things. If you have chosen to secure your mortgage with a fixed mortgage rate, your rate will remain constant for the term of the loan. If you chose to secure your mortgage with a variable rate mortgage, your rate will fluctuate based on market conditions and the prime rate.
Your rate can also change before you finalize your mortgage contract, which is why it is important to discuss your options with a Grimsby mortgage broker who can work to help you lock in a great rate for your loan.
Question #4 – How is my monthly mortgage payment determined?
The amount you will be paying on a monthly basis will be calculated based on the amount of your principal balance (the amount you still owe on your loan), the interest rate, and the amortization, which is the length of time that the mortgage is scheduled to be paid in full.
We hope you find this information helpful as you consider your home financing options.
Of course, if you have any additional questions to the ones we have included above, we are more than happy to answer them for you! Give us a call today!