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Mortgage FAQ

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Mortgage Frequently Asked Questions 

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Mortgage & Purchase Process

Once you’ve made the decision to buy a new home, the buying process begins with estimating how much you can afford to spend.

Here, you can find information on mortgage providers, pre-approvals, and learn more about the mortgage approval process. You can also learn about which mortgage features to look for when choosing your mortgage, as well as the closing costs you can expect to incur when purchasing your new home.

If you’re a first-time homebuyer, you can also find out more about the types of grants and programs you may be eligible for. Browse the pages below to learn more about the buying process and how you can qualify for the right mortgage.

Learning more about the mortgage and purchase process before deciding on a lender can help you find a mortgage that’s better suited towards your needs.

While a mortgage from your existing bank will provide the benefit of managing all your financial services through one provider, a mortgage broker will walk you through the entire mortgage process and negotiate with multiple lenders on your behalf. Use our mortgage and purchase process guide below to learn more.

Moreover, home inspections can save you from unexpected and potentially costly surprises. On the pages below, find information on how to make a deposit on a home, submit your mortgage application, and choose the right mortgage provider.

How Much Can I Afford?

Now that you’ve decided to buy a home, you need to know what you can afford. You also need to be aware of the additional costs associated with purchasing and maintaining a property.

There are also a number of factors (such as your income, credit score, your down payment, your debt, etc.) that’ll decide what you can spend and how large of a mortgage you can take on.

Check out the pages below to help determine how these factors will affect the size of your mortgage and what you’ll be able to afford.

Fixed Rate Mortgages

When choosing the most appropriate mortgage rate for yourself, you typically have two options: a fixed or variable mortgage rate.

Fixed mortgage rates are more reliable than variable mortgage rates and depending on your financial situation may be the best option for you.

With variable mortgage rates you will not have complete knowledge of the amount you will be paying for your mortgage term. If you don’t want to experience the effects of market fluctuations on your payments then a fixed mortgage rate will relieve you of that burden.

Assess Your Paying Abilities

he first thing you should take into consideration when choosing a variable rate is whether or not you can afford to make payments if the rate increases.

We can assist you in assessing your current income and the prospect of an increase in earnings. The second thing you must consider, after it is settled that you are financially prepared for possible fluctuations, is whether or not you are emotionally prepared.

For some people, their personality does not have a high tolerance for risk and they prefer stability above all else. If you feel that rate changes will keep you up at night then it’s best to turn to a fixed mortgage rate instead.

Variable vs. Fixed

One of the first decisions homebuyers and mortgage shoppers face is whether to select a fixed rate or variable rate mortgage.

Fixed-rate mortgages are a popular form of loan for home purchases, especially for a five-year term. However, fixed rate mortgages may sometimes end up being more expensive than a variable mortgage rate especially for much longer terms. Although variable mortgage rates are lower, they are definitely more risky. Even if rates are remarkably low at the time that you commit to a variable mortgage rate, they may double in the following years.

With a variable mortgage rate the amount of your payment is locked for your selected term, often a couple of years. However, although the payment is fixed, the interest rate on the mortgage will change with any fluctuations in the market rates.

This means that if the interest rate goes down, more of your payment is used to pay off your principal and this lowers your overall costs. On the other hand, if the rates go up, a larger amount of your payment will go towards paying the interest costs and consequently this adds to your overall mortgage cost. The benefit of a variable mortgage rate depends largely on market rates.