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Things You Need To Know About Canadian Mortgages2012-12-03T06:27:27-07:00

Getting a mortgage in Canada may seem like an easy task, but it’s not!

Here is a list of things that first time home buyers must know about the mortgage process.

It’s all about the money!

The size of your mortgage depends on how much you earn. If you want to get a bigger mortgage, then it is a prerequisite that you should be earning a lot of money. Many first time buyers are surprised when they don’t get the mortgage they were asking for. But they probably just aren’t earning enough to qualify for it.

A few years ago borrowers had up to 30 years to pay back their mortgage. But now it has been reduced to 25 years, so first time home buyers have relatively bigger monthly payments. You will definitely need to earn more money and make bigger down payments if you really want a home of your own.

It is possible to get loans for long term

You can get up to 10 year mortgage terms after which you may have to refinance at another interest rate. These days the interest is pretty low so it’s a good idea to get longer terms from your mortgage broker. If the rates rise over the next 10 years you will still be paying mortgage at today’s rates.

Keep Your Credit Clean

The first thing that mortgage lenders are concerned with is whether you will be able to pay back or not. Your credit history can be an accurate indicator of your performance with previous lenders. More important than having a bad credit history though, is that you should have ANY credit history. If you have never borrowed before or have had a credit card, chances are that you will be refused the mortgage. If you have bad credit history, you may be asked to pay a higher rate of interest on the mortgage.

Pay off your mortgage every week

Weekly payments mean you are paying of the interest faster. Think about it. Which one would be less of a burden? Interest accumulating for a week or for a month? The answer, of course, is the former!

If want to be free of your mortgage payments at the earliest, paying it off in weekly installments is a good idea.

These are some of the most important things that every first-time home buyer must know. But Canadian real estate is a diverse topic and real learning will only come with experiencing it firsthand.

So happy hunting and mortgage payments!