As a first-time homebuyer in Nanaimo, there are many factors to consider. The search for your ideal home can be an exciting time. Getting pre-approval can simplify the process and increase your confidence in your buying power. The amount to be borrowed and the interest rate must also be considered. For this reason, you must find the best mortgage rates in Nanaimo.
Mortgage – What’s The Deal
Mortgages are legal contracts between you and the lender. This document describes your loan’s terms and conditions, which is secured by a piece of real estate, such as a house or a condominium. This secured loan entitles the lender to take your property when you don’t pay on time or maintain your home.
Understanding Mortgage’s Financial Jargon
Your mortgage broker will offer you several mortgage options. Take the time to learn about each option’s features. By doing so, you will be able to choose the mortgage that is right for you.
- Mortgage term – The duration of your contract that directly impacts your interest rate. The interest rate is included in the mortgage contract. There are various terms available, ranging from several years to just a few months. You’re required to renew your mortgage if you’re unable to pay the balance in full at the end of each term. You may thus need multiple terms to repay your mortgage.
- Amortization period – This is how long it takes to pay off your mortgage completely. Your payments will be lower if your amortization period is longer. You will, however, pay more interest if you pay for a longer duration. Amortization is limited up to 25 years, should your down payment be less than 20%.
- Mortgage principal payment – The amount the lender loans you to purchase your home. Usually, this is the difference between the purchase price and your down payment. You may also have to pay mortgage loan insurance if you have a down payment of less than 20%.
- Payment Frequency – How often you pay your mortgage. Accelerated payment schedules are also an option. Accelerated payment of one additional month each year can save you considerable interest in the long run.
- Interest rate – The fee you pay to the lender for borrowing their money. Mortgage payments will be higher if your interest rate is higher. Whenever you renew your mortgage term, you renegotiate your interest rate. Future mortgage payments may be lower or higher as a result.
Get The Best Deal By Shopping Around
The best way to find competitive mortgage rates and products is to contact a mortgage broker who can look into several credible lenders. As a result, a single credit check will be conducted on your credit history. It will also save you legwork and costs. Mortgage brokers can sometimes get certain costs waived, including origination and appraisal fees. Comparison shopping pays off!
Do you have questions or thoughts? Talk to the Nowik team! We can make it happen for you with our selection of mortgage plans and access to the best mortgage rates in Nanaimo.