Are you seeking to purchase a home? If so, then you must evaluate the various options available to you in regards to home mortgages. In this arena, residential mortgage solutions are more complex and varied than ever before, and as a result, you need to be educated as to your options. To be sure, there is light at the end of this tunnel. When you do your homework, and partner with the right mortgage broker, you can find not only the right home for you, but purchase that home with the right plan that will allow you to keep or even improve on your monthly cash flow. Let’s take a deeper look into the mortgage solutions that you can leverage in order to buy your own home.
Preparing For Your Initial Down Payment
When you have made a decision to purchase a home, the next step is to begin saving for your down payment. In Canada, it is traditional to put 20 percent of the purchase price of the home as your down payment. This can be a sizeable amount of money, and so you may need to save for a number of years in order to be able to pay your down payment. To be sure, it is possible to put a smaller percentage of the purchase price down as a down payment on your home. However, if you decide to go that route, then you will need to take a mortgage insurance policy, which can lead to increased monthly payments on top of your mortgage. As with any financial decision, you need to weigh the costs and benefits with a trusted advisor, such as a mortgage brokers.
Understanding Your Mortgage Options
Once you have determined the right down payment plan for you, your mortgage broker will help you consider the various types of mortgages that you have available to you. For example, you can choose between a fixed rate mortgage or a variable rate mortgage. Each mortgage type has its own costs and benefits. A benefit of your fixed rate mortgage is that you lock in your rate, and therefore your monthly payment will be stable over time. The cost is that you will frequently have a higher initial rate than with a variable rate mortgage.
The benefit of a variable rate mortgage is that you typically have a lower starting rate. Your rate will be determined by linking it to the prime rate. The cost is that if the prime rate were to rise, then your payments would rise along with it. Therefore, there could be more risk associated with a variable rate mortgage, even though it frequently leads to lower overall payments.
Choosing the right mortgage for you can be a challenge. It is highly recommended to seek the counsel of a professional mortgage broker that can help you choose the right mortgage. Steven Crews is one of Calgary’s top mortgage brokers, and he is ready to work on your behalf, at no cost to you. Contact Steven Crews at (403) 870-2669.