Lowest and Best Mortgage Rates Mississauga

Mortgage Terminology Explained

Getting a house is a dream everyone owns. Many factors contribute to buying a perfect home. Once you decide on the location, size of the property, and budget, you realize that’s just the beginning. Availing the services of a competent mortgage broker, getting the lowest and the best mortgage rates, and chalking out a feasible payment plan follows.

As you step into the territory of applying for a mortgage, little things mean a lot in the long run. Like that quarter percentage saving you thousands of dollars in a span of 20 years or so.

But as you enter the scene with confidence, you get completely lost in the terms of mortgage business. Before signing the papers, it’s good to know what each term in those documents mean. Saving oneself from financial loopholes is no easy task. But Mortgage Division, Mississauga, eases it out for you by defining the commonly used mortgage terms for your convenience.

Adjustable Rate Mortgage - ARM is the mortgage having a fixed rate of interest for a set period of time. It could be one, two, three, or 5 years. The rate gets adjusted at set intervals after that according to inflation. 

Annual Percentage Rate – It is the fixed or adjustable rate of interest payable to the mortgage lender.

Amortization – It is loan repayment schedule. The loan amount is broken down into fragments such as down payment, monthly interest payment on the balance amount, and the loan term.

Appraisal – Evaluation of the property conducted by a professional appraiser by thorough physical inspection of the property and current price of similar houses.

Bi-Weekly Mortgage – In a Bi-weekly Mortgage, half of the monthly payment is made every two weeks. It leads to faster repayment of loan as opposed to twelve payments per year, its equivalent to thirteen monthly payments in a single year. 

Closing Costs – Closing costs include the miscellaneous costs associated with the mortgage closing like attorney fees, recording fees and other costs.

Construction Mortgage – It’s a flexible mortgage option if you’re getting a home built where lender will allow advance borrowing according to builder’s construction schedule. It gets converted into a permanent mortgage once the construction is done.

Mortgage terminology will continue in the next post. For any queries regarding mortgage process, contact Mortgage Division, providers of the lowest and the best mortgage rates in Mississauga.