The Loewen Group Mortgages Teams has provided a list of the most common mortgage terms that you should know. Before you start looking for a Milton mortgage, familiarize yourself with the glossary below so you are more knowledgeable during the home loan process.
- Adjustable Rate Mortgage (ARM): This a mortgage option where your interest rate and monthly payments can sporadically change. The benefits of an ARM is that it is generally cheaper because the initial rates are lower than other mortgages.
- Amortization Period: This is the term period of your loan, which means the amount of time it will take you to pay it off. The most popular loan amortization period is 25 years, but can be higher or lower depending on your financial standing.
- Bridge Loan: This is a second mortgage that is also referred to as interim financing. This is immediately paid off when the buyers current home has sold. Bridge loans are beneficial if the closing date on the house you are wanting to buy is before the closing date of the house you are wanting to sell.
- Closing Costs: When you have agreed on and signed for a mortgage, then you have to pay certain fees associaited with the house. This includes, but is not limited to: property title, insurance, lawyer costs, and home inspections.
- Conventional Mortgage: This is a popular mortgage where 80% of the home’s appraisal value or purchase price can be borrowed.
- Down Payment: A down payment is the amount a buyer initially pays towards a house. Depending how much you provide towards your down payment can help or hurt your mortgage rates in Milton.
- Fixed Rate Mortgage: This is a mortgage where your interest rate and monthly payments are fixed and will never change. Although the rates are generally higher, this is a great option if you like to budget. Here you will know exactly how much you owe on your mortgage and how long it will take you to pay it off.
- Mortgage Broker: A broker works with you to find you the best home loan deals on the market. Your local Milton mortgage broker will always put your needs first and will help you afford the home of your dreams.
- Mortgage Insurance: If you cannot pay at least 20% of your home’s down payment then you have to get mortgage insurance. This is paid for by the borrower and protects the lender from any defaults you might make.
- Refinancing: Refinancing your mortgage is a popular option if the market rates are better than what you are currently paying. This can lower your interest rates and reduce your monthly payments.
- Second Mortgage: A second mortgage is an additional mortgage taken out on a property. Benefits include lower interest rates and it allows you to use any equity your home may have.
Understanding these terms can help you during the mortgage process. Contact your local Milton mortgage broker today at 289-270-1586 for more information or to get started.