Mortgages are a means of being able to afford a home that you cannot pay cash outright for. This means that a home mortgage is going to allow you to take out money to purchase a home. The total cost of a 30-year mortgage is going to be a bit more than the price of the home to help account for the interest on the loan. Before taking out a loan, it is always a good idea to learn a bit about them. A mortgage is a great thing, it can help you get the home of your dreams and build your credit at the same time.
Before taking out a mortgage you might want to use an all-in-one mortgage calculator to get an idea about what your loan might look like. If you already have a mortgage that you are struggling with, you can also apply for home refinance or apply for mortgage assistance if you do have a mortgage that you cannot handle. Mortgages are a great thing, but it is important that you take the time to learn about your options and about mortgages in general before you do take one out and commit to that type of loan.
According to the Government of Canada, the cost of buying a new home across the Great White North has increased by nearly 5% in the last 5 years. Now more than ever, Canadians are having to turn to banks to help them pay for a new home. While securing a mortgage can be a completely safe way to buy a home, the fact is not every mortgage is created to be fair and useful to Canadian borrowers.Thanks in large part to the ongoing financial recovery, the Canadian housing market continues to fight its way back to health. According to Reuters, September 2013 levels for new homes surprised everyone when new starts came in higher than originally predicted, nearing 200,000. The housing market is recovering, but many Canadians are still finding themselves wondering how exactly they, too, can hope to afford a home.
What Exactly is a Mortgage?
Zillow defines a mortgage to be a loan given by a bank to help new homeowners pay for their houses. The thing buyers have to be aware of, what really sets home mortgage rates apart, is that a mortgage is not just a loan with interest. Instead, the full amount of repayment equals the sum of the principal, tax, insurance, and the interest. Clearly, Canadian home buyers need ways to save on their bank mortgage rates. Here are four ways they can do so.
- Maintain a Great Credit Score. The best way to slash mortgage rates today is by maintaining a healthy credit score throughout life. As MyFICO writes, having a poor credit score can lead to home buyers being denied a loan for their home. If they are granted a loan, their best mortgage rates are likely to be equal to the worst for people with great credit.
- Borrow Only What You Need. About.com recommends every borrower, whether they are looking into bank mortgage rates or those for their student loans, only ever borrows what they need. A good rule of thumb is to never borrow more than 80% of your new home’s worth. Not only will borrowing less make it easier to get out from under debt, but a 20% down payment in your own funds is sure to get you low interest rates, comparatively.
- Shop Around. If you want to find the best bank mortgage rates, then you have to be willing to put in the time to look around. MSN Money writes that settling on the first mortgage offer you find is a great way to get stuck in a noncompetitive rate. If you want to find the best mortgage rates Canada has to offer, then contact multiple banks. Even saving .25% interest over the life of your loan can make a world of difference.
- Look Beyond Interest Rates. As BankRate astutely points out, finding affordable bank mortgage rates is not just about the interest. Each homeowner needs to use mortgage rate calculators to figure out their debt to income level. Doing so, they can see exactly how difficult it will be to shoulder their new burden. Further, all buyers should read the fine print that comes with their mortgage contract. There are oftentimes hidden fees to be wary of.
Home costs in Canada continue to rise. The average Canadian looking to buy a home is going to need the assistance of a bank. However, by keeping these tips in mind, they can find bank mortgage rates they can afford, now and into the future. More info like this: mortgagepal.ca