What is a Mortgage | Jason Wermie
Aug 5th, 2021
Would you like to buy or build a property? Jason is the mortgage broker you need to make this a reality. As an independent mortgage broker, he can review offers from multiple lenders and provide you with a low market rate mortgage.
A mortgage is an agreement between you and the lender, it sets a monthly repayment plan and requires the home buyer to pay interest. It outlines small details that are super important like penalties for late payments and gives the financial institution the power to repossess your property if you unable to repay the money you have borrowed, plus interest.
- The interest rate, and if it can change (Is it fixed or adjustable?)
- Mortgage closing costs, including lender fees
- The effective annual rate (APR)
- The term of the loan, or the time you have to pay it off
- Late repayment and risk penalties
How Much Can I Borrow?
Lenders offer services like mortgage pre-qualification to calculate how much you can borrow. However, lenders don’t consider all your family and financial circumstances. You will have to review your household income, expenses, and priorities to calculate what best fits your budget.
- your maximum monthly payment should not exceed 35% of your net monthly household income.
Budgeting is unique to your lifestyle, your family, and your long-term vision. You need to take into consideration many factors such as the cost of living: clothing, housewares, groceries, gasoline, personal hygiene, leisure, and gifts. Irregular expenses such as car repairs, vacation trips and new purchases such as computers and household appliances.
Don’t Forget Other Costs when Budgeting
Budgeting for only the purchase price of a property is a common first-time homebuyer mistake. Buying a home requires several services and is often more expensive than the property purchase price.
Additional expenses may vary depending on property
- Title Insurance
- Estoppel certificate fee
- Conveyancing/legal fees
- Fees and taxes
- Agent’s fees
Think Long Term
You might have tough discipline and strong will and think about budgeting as a calorie deficit while you try squeeze into a house that is bigger than you can afford. Unfortunately, it’s a lot more serious than gains and losses on the scales, its home repossession and them homelessness should you become unable to keep up with payments.
Remember a mortgage require 25+ years of monthly payments, there is no off-the-shelf mortgage for financing the costs of buying a house. The financial situation of every homebuyer is different. Personal willingness to take risks also plays an important role. It is crucial that you feel comfortable with the type of loan you have chosen for many years.
Contact Jason Wermie
The best thing to do is to make an appointment today for an individual consultation with Jason Wermie, who is an experienced mortgage broker in Winnipeg