What You Absolutely Need to Know about a Mortgage as a Mississauga First Time Home Buyer
If this is your first time buying a home in Mississauga you probably have tons of questions about the purchasing process. In order to make the procedure all the more easier you'll need to have an idea of what you should be expecting. Here is a basic outline of the mortgage information you should know as you take your first steps forward toward homeownership.
Fixed-rate versus adjustable rate mortgages
A fixed-rate mortgage usually has a 15 or a 25 year amortization schedule. This means that you have this amount of time to completely pay off the home loan. During these years you will be paying equal payment amounts every month and the interest rate will never change.
With an adjustable rate mortgage you'll also have the option between choosing a 15 and a 25-year home loan. The difference between this mortgage and a fixed-rate one is the adjustable rate has an interest rate that will change during the years. You'll be offered a low introductory rate that will generally be locked in place for five years. After this time the interest rate will vary and can either rise or fall according to the market rates at the time.
Mortgage broker or a lender?
It's always better to work with a mortgage broker here in Mississauga since he'll be able to shop around on your behalf in order to bring the best type of loan to your attention. There are a lot of different factors that can make up a mortgage and it would literally take you hours upon hours to do the shopping for the best one if you undertook the project yourself. By shopping with one lender at a time, it can be a lengthy process and the odds are good that you won't walk away with the best mortgage deal that is being offered by another lending institution.
How does prequalification work?
If you've had the opportunity to talk to a real estate agent he's probably asked whether you have become pre-qualified for a mortgage yet or not. When you get pre-qualified you'll find out exactly how much mortgage you'll be approved for and as long as you stay under the amount quoted when you make your purchase you are guaranteed approval. When you're working with a real estate agent and sellers, this can go a long way toward securing your new home. You are always taken more seriously when you are pre-qualified since the seller won't have to wait for you to apply for a loan and then receive word about it. When there are multiple offers on the table, a pre-qualified buyer is often chosen over one that hasn't taken the trouble to get his qualifications in order.
If you're a Mississauga first time home buyer, find out more about the variable and fixed rate mortgages, contact a mortgage broker and then get pre-qualified for your home loan. You'll also want to connect with a real estate agent so that you'll be ready to start shopping as soon as the timing is right.