It’s fair to say that the financial industry tends to use complicated terminology that few people can really understand. This is one of the reasons why so many false statements and half-truths about home mortgages are passed around as proven facts. To counter the abundant disinformation about this topic, we will list (and refute) some of the most frequently encountered statements about mortgage loans that don’t pass the reality test:
All mortgages pose a financial danger
If you are applying for a home loan in Canada, the best mortgage rates you can get are usually pretty fair. That doesn’t mean each and every loan will be favourable, but a well-informed customer should be able to find a product that allows him to accomplish his goals without jeopardizing long-term solvency. Of course, there is a fine line between borrowing just enough for a house and taking too much, and each home buyer should make a careful calculation.
You can’t change your mortgage deal after you sign it
Technically, a mortgage agreement lasts for up to 25 years continually. In practice, however, Canadians change their mortgage every three to five years for various reasons. This can be done by applying for a loan renewal and could even net you more cash to buy a larger home if you wish to do so. Not only you can change the deal, but you could also switch to another lender if the interest rates are considerably lower on the other side of the fence.
People under 30 have no chance of getting a mortgage approved
It may be true that numerous young people lack the necessary financial stability to service a mortgage responsibly, although there are quite a few exceptions to this rule. For those who are able to secure good employment straight out of college, there are no obstacles preventing them from getting a mortgage application approved. In fact, there are even some assistance programs designed to make the purchase of a first home easier.
Only people with full-time jobs can apply for a mortgage
Freelancers and small business owners can become homeowners through mortgage agreements. Banks understand that some people may be very successful without holding full-time employment, and some of them are willing to grant mortgages to self-employed citizens with sufficiently high revenues. The procedure will probably be more complicated in such cases, and additional guarantees may be sought, but in the end, the application will be approved if all the requirements are met.