When shopping for a mortgage in Montreal, it is important to understand how a mortgage works. You can get a mortgage from one of the following, banks, insurance companies, trust companies, loan companies, credit unions and caisse populaire.
With all of the mortgage options available to you in Montreal, it can be very helpful to use a mortgage broker to find the best mortgage deal available to you. Step one is to understand how they work.
How does a mortgage in Montreal work?
The first thing a home buyer needs to do is to make a down payment. The minimum down payment is five percent of the total cost of the home. Once you have made the down payment, the lender will then provide rest of the balance of the home, this is the mortgage. At this point you will have to make regular payments to them to cover the cost of your home, paying back the amount that you have borrowed. Interest will be applied to the amount of the loan which can be negotiated by using a mortgage broker.
As with any loan, the longer the period of the mortgage, the more interest you will ultimately pay. If you are unable to make the payments then the lender can take ownership of the property.
Will I be able to qualify for a mortgage in montreal?
As you can expect, any lender will want to ensure that you can afford the mortgage you are applying for. This is when you are seeking a mortgage approval. The lender will take a close look at your current debt, assets, saving and income to make an evaluation on your ability to pay the mortgage.
I’m approved, now what?
Once you have been approved for the mortgage you want you will then begin to look to get the best deal. A mortgage broker is very skilled and experienced at being able to do this for their clients.
The factors that are up for negotiation are the amount of the mortgage, the amortization period (how many years it will take to pay the mortgage off in full) and the mortgage term.how often you will make payments. If the mortgage is fixed then the amount of interest you will pay will remain the same for the entire term of your mortgage.
It is worth bearing in mind that there are a lot more fees that you will need to budget for at this stage, specifically property appraisal fees, title insurance, land registration or tax to name a few. Your lawyer will be able to explain these to you in detail. It is vital that you understand everything that you need to pay as these costs do add up.
Top Tip: Read and understand the mortgage agreement.
It is a long and complicated document, ensuring that you have understood the fine details will help avoid any surprises later on and ensure that you can settle into your new home in comfort. Having your lawyer review the agreement is vital.
As your mortgage will be the largest debt you will ever have, it is really important that you take the time to get the best deal, and the best deal will be found by your mortgage broker. Mortgage brokers have the resources, contacts and experience to negotiate the best deal for you. Using a mortgage broker in Montreal can make a huge difference to the amount you spend in interest. Even a few tenths of a percent on the interest can mean you save thousands over the mortgage period.