First-Time Mortgage Questions
Whenever you are looking for a mortgage – particularly first-time buyers – it is only natural to have mortgage questions. These can be vague or specific in nature, depending on what you need to know. Super Brokers is here to provide the answers to those mortgage questions and make the home-buying process smoother.
The Most Common of Mortgage Questions: How Much Can I Afford?
When looking for a mortgage, one of the first mortgage questions that you need to ask is how much you can afford. And what you can afford on your first-time mortgage depends on two things: income and expenses.
It cannot be stressed enough how importance honesty is when going through these two factors. Overcommitting means that you can’t afford the mortgage payments and that can mean foreclosure. Foreclosure is a terrible thing to deal with and it can ruin your credit, so be honest with your finances and income.
You can try Canada’s mortgage calculator to help you come up with a proper budget. This will also help you to understand what you can really afford on a home.
What is a High Ratio Mortgage?
A high ratio mortgage means that the amount borrowed from a lender is more than 75 percent of the value of the property. This type of mortgage will also need a significant level of mortgage insurance in order to complete the sale.
The good thing about that mortgage insurance is that it can be added to the loan itself. The most notable benefit of this type of mortgage is that it doesn’t require a large down payment in most cases.
Common Mortgage Questions: What is a Conventional Mortgage?
You may have heard this term before but don’t fully understand what it means. That is why it is one of the most common mortgage questions. A conventional mortgage is one where the buyer’s deposit is at least 25 percent (or more) of the total purchase price.
This means that 75 percent or less of the total purchase price is borrowed from the lender. Because this is a traditional mortgage, it typically does not require mortgage insurance. It does, however, require a much higher down payment.
Also keep in mind that since you are borrowing less, you will be paying less in interest over the long-term. That means savings over the life of your mortgage.
How Can a Mortgage Broker Help Me?
One of the biggest mistakes that buyers make is that they don’t ask enough mortgage questions. Thankfully, there are mortgage brokers that can assist in the process. Mortgage brokers are independent and don’t have a vested interest in a particular company.
Because they have no particular allegiance, they will provide advice in an objective and unbiased manner. Professional mortgage brokers will also have access to a wide range of Canadian lenders. This allows them to research and compare the best deals possible across Canada.
A professional mortgage broker can help you to find the best deal that fits your budgetary needs. Even better, they can field your mortgage questions accurately and honestly to help you better understand the process.
How Much are Mortgage Broker Services?
In most cases, the client does not pay for mortgage broker services. Most lenders will attribute a broker’s fee to the brokerage company when a client takes out a mortgage with that lender. There may be a marginal fee involved in poor credit mortgages, but that would come up prior to the services rendered.
In short, it makes all the sense in the world to enlist a mortgage broker to help you throughout the process. Call Super Brokers today to begin your homebuying process by getting all of the answers to your mortgage questions.