What is a Mortgage?
Most people can’t afford to purchase a home without a mortgage or for strategic business reasons would rather pay off the home over a certain period of time. In both of the situations you would need to get a mortgage which is a large secure a loan that is given to you for the purchase of a house. Within the terms of the mortgage the property itself is collateral. This means that if you fail to repay the mortgage according to the agreed-upon terms the lender can take the property away from you.
Should you use a Bank or Broker?
One of the first questions you need to ask yourself when entering the mortgage market is whether you should use a bank or broker. Although working with the bank that you already have a relationship with maybe a good starting point Banks are only limited to their own product offerings so your options are very limited.
Mortgage brokers on the other hand have access to a wide range of banks, Financial institutions and private lenders. This can offer you a large degree of flexibility which most first-time home buyers can appreciate.
How to get approved for a mortgage
Prior to looking at homes we highly recommend that you get pre-approved for mortgage. This will save you a lot of time and hassle during the process. The lender or broker will examine your income and credit rating to determine the amount that you are qualified to borrow. Once the broker has results after shopping around to find the best options for you (usually within three days) we will get back to you with a qualified amount and interest rate. This pre-approval is usually guaranteed up to 120 days.
Having this guarantee from a financial institution will give you the confidence to enter the housing market, find the right home and be able to close the deal.
Note: there is still a final approval stage required once you have selected the property. This process usually goes without any major issues.
Serving Mississauga, Ontario
Why Use Our Services?
Access to Canada's top financial institutions
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I have to tell everyone and anyone who is looking for a mortgage or any other kind of re-finance, to give TrustAtlantic the opportunity to help you.
With my venture of buying a house in Mississauga, I have to say i would not have been able to do it with out them.
The staff have been awesome answering any questions that I have had, and believe me I have had many. The time and attention that was given to me, I was a person and not just a number or just another client.
My hat goes off to everyone at TrustAtlantic for making all of my wishes and dreams come true. I could not have done it without you!!!!!!!
Frequent Asked Questions
The Size of Your Mortgage
In most cases you are only able to borrow up to 95% of the price of the home. This means that you have to provide at least 5% of the price in the form of a down payment. Here is a chart to illustrate this point.
|Price of Home||Minimum Down Payment|
As you can see the minimum down payment is significant and you also need to consider how much your monthly payment would be and how much it would increase as the price of the home increases. Here is a chart to Illustrate the affect of the price of the home on the monthly payment.
Assumption: 25-year mortgage at the fixed rate of 2.6%
|Price of Home||Approximate Monthly Payment|
As you can see the price of the hole has a very significant affect on your monthly payment. This shows that it is wise not to overextend yourself financially especially in today’s economical environment.
Picking the right house for the right price is something you should discuss with both you mortgage broker and your real estate agent.
Fixed or Variable?
I fixed interest rate is a set number that is locked by contract for the duration of your mortgage term. The benefits are that your monthly payments will be the exact same amount and principal/interest ratio every month.
Some people prefer to comfort of having this set structure as opposed to a variable rate which fluctuates with the market during your mortgage period. Even with the variable mortgage your monthly payments remain the same (in most cases). The main change is the ratio between the principal (the money that goes towards paying back the loan) and the interest rate changes according to The Bank of Canada.
You have a $250,000 mortgage at a fixed rate of 2.6%. your monthly payment for this mortgage it is $1134. This payment is $593 principal and $541 interest. These numbers and ratios would remain unchanged regardless of changes set forth by Bank of Canada.
If the same mortgage was a variable mortgage and interest rates went up by 1% your monthly payment of $1134 would now be $384 principal and $750 interest. This would have a significant affect on how long it would take to pay off your mortgage. This decision is critical and you should always evaluate the pros and cons of both a fixed or variable mortgage with the advice of a trusted mortgage broker.
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How We Can Help You Today
Finding the right mortgage might seem like a difficult task but with our experience we can make the process as smooth as possible. Your mortgage broker will walk you through your options and answer all of your questions. You can email or call your agent to ask follow up questions at any time. Once your application is ready the mortgage agent will shop for the best rates for you. We will speak with every bank, financial institution and private lender until we find a suitable solution. To get the process started you need to contact us for a free consultation. In this consultation you will understand your position and be able to make better financial decisions. Are you ready?