What is the mortgage rate?

Buying a home and becoming a homeowner is an exciting time in life that requires you to know a bit about the steps to get into your new home and the types of mortgages available.

A mortgage agent will provide you with valuable advice and knowledge and, can help you select the mortgage that’s right for you. The 3 initial terms to understand include rate type, payment schedule, and amortization period (this is the length of time to pay off your new home mortgage).

RATE TYPES:

FIXED-RATE: The interest rate and payment amount are locked in over the term. Great for those who want the security of knowing their payments will remain the same.

VARIABLE RATE: The interest rate will fluctuate with the Prime rate over the term of the mortgage. Great for those who think rates will decline so they can pay down more principal.

PAYMENT SCHEDULES:

MONTHLY-BIWEEKLY-WEEKLY
Some lenders have the option of accelerated payments.

MONTHLY: You make 12 payments a year due on the same day of every month. Great for those who want to keep flexibility in their budgets.

ACCELERATED BI-WEEKLY: Your monthly mortgage payment is divided in two and that amount is due every two weeks. Great for those who want to save in interest and pay off their mortgage faster.

WEEKLY: Your monthly mortgage payment is multiplied by 12 months and divided by 52 weeks to get a weekly payment amount. Great for those who use a weekly budget to keep close track of their finances.

AMORTIZATION AND TERM LENGTHS

AMORTIZATION PERIOD: 25 years is typical. A great choice for first-time buyers with less than a 20% down payment.

TERM LENGTHS: Term length can range, but many first-time buyers choose 5 years. Great for those who want to lock in their interest rate for a longer period of time.