Purchasing your first home is a very exciting time. Especially this time of year where the air is crisp, the leaves are changing colours, and the holidays are just around the corner. What better way is there to celebrate the holidays with the ones you love, than by hosting the festivities at your newly purchased home?
But, before you send out the invitations and get started on the home buying process, it is important to be aware of the financial responsibility involved with owning a home. This purchase will most likely be the biggest expense you ever have, therefore, you should know about everything involved regarding mortgage rates in Milton. So, to help you get started, our team at Loewen Group Mortgages have explained why and how interest rates can affect your mortgage.
What Are Interest Rates?
Interest rates are a percentage fee that is tagged onto the amount borrowed from a financial institution until your loan is paid for in full. Depending on which Milton mortgage brokers you work with and your financial situation, this percentage may be really high or really low.
What Affects Interest Rates?
Your personal interest rate can be affected depending on your credit score and income. If you have a low credit score, brokers will view you as a high-risk borrower, so they may add a higher interest rate on your mortgage for extra financial protection in case you were to default on your mortgage. Another factor that could affect your interest rate is the amount you pay towards your down payment. If you pay less than 20% of your mortgage, you will be required to obtain mortgage default insurance, which is an extra monthly fee and an increased interest rate on top of your mortgage.
How Interest Rates Can Affect Your Mortgage?
Interest rates can affect the type of mortgage you can qualify for. If the market changes and mortgage rates in Milton increase, you may not be able to afford the house you originally had your eye. Therefore, if you are interested in purchasing a home now, it would be in your best interest to lock in a rate with your local broker before they get too expensive since interest rates are constantly fluctuating.
For more information on how interest rates can affect your mortgage or if you would like to know what the current mortgage rates in Milton are going for, please contact the Loewen Group Mortgages team at 289-270-1586.