Most people who purchase a house require some financial assistance. That is, they require someone to lend them sufficient funds to cover the price of a house. Most often, this financial arrangement is handled through a bank or other institution through a MORTGAGE. A mortgage is a legally binding agreement that states a certain party (mortgagor) lends money to another party (mortgagee).
The mortgagee agrees to pay back the money at a certain rate, plus interest, over a certain time period.
When you are considering a mortgage, you have many options to consider such as type of mortgage (closed, open, high ratio, vendor take back, convertible), payment schedule (weekly, bi-weekly, monthly) and amortization period. Before you sign any documents, shop at several institutions and compare rates and features. You could save, or lose thousands of dollars when the terms, interest rates and payment schedules are not working in your favour. These items are all negotiable.
Mortgage amount -When interest rates are lower, your monthly payments are lower, so you might qualify for a larger mortgage. However, the larger the mortgage, the more you will pay in interest over the length of the mortgage. Your home will cost you more. If you can afford a bit more, without sacrificing your lifestyle, this will greatly contribute to reducing your financial obligation. Take a look at our online mortgage calculator to get a rough estimate on your situation.