The mortgage maze
You may be a home buyer who has or is, searching for the best possible deal for a mortgage loan. You may even have balanced out the positives and negatives of various products from a variety of sources, but there is still some doubt in your mind about which course of action to adopt! Buying a home is never easy and that’s what helps make it interesting and exciting for buyers who get it right.
The terms and interest rates are important factors related to being a property owner and home buyers must give them serious consideration. One question is how long do you want to commit to paying off your mortgage loan? Another crucial issue revolves around how much you’re going to pay each month and this is where the influence of mortgage rates comes into effect. It can be compared to a situation of balances, and it is one in which the expertise and knowledge of a mortgage broker can have a discerning and clarifying influence.
When signing for a 5-years mortgage term it can seem insignificant if believing that circumstances won’t change for the next 10 to 20-plus years. However, as we all know, life has a habit of throwing us a curveball; such as changes in jobs, relationships, divorces, marriage and various other surprises. Generally, they are occurrences that can generate changes in residency balances, including broken mortgages!
Terms and rates
The foregoing were conditions that can happen and which can upset lifestyles including the issue of penalties for breaking a fixed-rate loan. Mortgage rates have a particular influence in aspects related to homeownership and breaking a fixed-rate loan carries more severe penalties than for ending one at a variable-rate. This is where some initial qualified advice is important before entering into a loan agreement.
Another aspect to consider is that a longer term mortgage will help protect you if the interest on mortgage rates increases, but a reversal of this position produces a counter effect. It’s been determined that on average mortgages in Canada are for terms of one to 10 years before renewal, refinancing or full payment of the outstanding balance is needed. Another interesting piece of research found that again on average, Canadians will only have a mortgage in effect for just under 4-years.
Instead of trying to make self-predictions, it would be worth your while to obtain some sound advice from a highly qualified mortgage broker!