Mortgage Rates and Terms Should be Considered Together

Mortgage Terms and Conditions

If you are shopping around for home loans, look beyond mortgage rates which are currently at record lows. Smart borrowers know that the difference is in the details, and it is not just about choosing a fixed or variable rate mortgage (VRM). Whether it is your first time or a renewal, you must pay attention to the mortgage terms and conditions. Our experienced mortgage brokers pinpoint important aspects to prevent you from being stuck with a product that does not fit your needs or situation.

  • Rate: This is the big draw for most mortgage shoppers. Is a variable rate or fixed rate mortgage better? There are a variety of factors to consider before making your decision. The interest rate on VRMs might be significantly lower than a fixed rate (which remains unchanged for the specified period) but there is a risk involved. With this type of mortgage, interest rates can suddenly rise (or fall) based on changes in the prime interest rate. However, the penalties for breaking your mortgage early might be lesser than a fixed rate mortgage. That is why it is critical to consider mortgage terms and conditions as well.
  • Penalties: This is another big factor that many borrowers overlook. However, as Greg Williamson, founder of the Canadian Home Buyers Academy points out in a Globe and Mail article, a significant number do not make it full term. There are a number of reasons why this might happen, such as a marriage and subsequent change of residence, moving to a bigger house or another city for work, or a divorce. Also, lenders have different ways of calculating penalties. Your mortgage broker must explain what it will cost you to exit your loan early. Yet this does not mean you should select a mortgage product based on a lower penalty if the rate or amortization period does not suit you.
  • Mortgage term: Deciding on a loan term depends on your financial situation and comfort level. To afford a bigger house or keep mortgage payments low to balance other needs, some homebuyers choose amortization periods of more than 25 years. This longer period also means it will take longer to pay off your home loan. Do the math to determine if it works for you.
  • Pre-payment policy: Pre-payment terms are an equally important consideration. You may want to increase payments, pay off your mortgage early or a portion of it. Some lenders penalize you for that or allow you to pay back only certain amounts.

Find the Best Rates and Terms with an Experienced Mortgage Broker in Aurora

Experienced Mortgage Brokers

Navigating lenders, mortgage rates, terms and conditions, can all be quite confusing. It is wise to speak with a mortgage broker in Aurora. We provide unbiased advice on your mortgage options. Our team of mortgage professionals will get to know your housing or investment goals to help you make an informed decision based on your unique needs.

You can talk to our experienced mortgage brokers in Aurora to help you take advantage of the best rates and terms. Call the experts at Accumetrix Mortgage Alliance today at 905-780-0908.

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