What exactly is a mortgage?

A Mortgage in Canada: What does it exactly consists on.

I like to educate my clients, so what would be better than starting from the very beginning. What is a mortgage?

When you are planning to buy a house, unless you have all the money saved to buy it in your checking account or under your mattress, you will need some sort of financial help to pay for it. A mortgage will not be the full amount of the house, it will only cover certain percentage.

Mortgages in Canada need a minimum of 5% down payment (your own saved money). Depending on how good is your credit and income the banks can require more than 5%.

"Ideally", you should have 20% down payment.

As any other loan, lenders will charge you certain interest on the amount of money you borrowed. This is why is important for you as buyer to get a mortgage agent that no matter what your income or credit situation is, will do the best he/she can to get you a great rate in your mortgage. Interest will not always be the same depending on what kind of mortgage you take. Yes! There are different types of mortgages, this makes it even more important for you to get a mortgage agent that will fulfill all your mortgage necessities.

Mortgages have different terms like the interest, payment amount, etc. You will be able to change your mortgage terms if whenever you renew your mortgage or when you refinance it. Renewals and refinances are other terms you will have to get familiarized during your mortgage life. This two mortgage derivatives are usually good for you and intend to bring betterment to your mortgage terms.

If you would like to see more about renewals and refinances stay turned!