Higher living standards or the need for owning a home has become everybody’s necessity today. At times people don’t have higher incomes, but dream of having a house, or a car, and other luxuries. This sounds rosy, but actually it may not be the case. Rosy because usually people think that they’ll opt for loans, mortgage, or refinancing like options.
Understanding the underlying principle of Canada mortgage is very important. Those who understand, and take mortgage are considered as wise, but there are some who may go in for multiple mortgage options one after the other.
The Underlying Principle
A mortgage is a loan taken for buying a property, home or a commercial place. The house or the property involved acts as collateral because if the borrower is unable to return the mortgage in the specified time period, his property will be sealed unless all the pending dues are not clear. At this time either his property is in possession by the lender party or he may also opt for refinancing option.
The rule of thumb is that the applicant has qualified for the mortgage from a reputed mortgage company, and his or her payment period has started. Initially he is required to make a small down payment in order to avoid excessive burden for the consecutive payments or installments to the bank or lender institution.
But mortgage approval isn’t an easy as it seems to be. There are many factors involved like:
- Whether the company has any reputation in the market?
- What are the interest rates applicable?
- What is the return period?
- What will be the initial down payment?
- Are there any other (hidden) costs involved?
- How much will the processing time?
- Can the processing time be tracked online in order to maintain transparency?
- What if the borrower is unable to pay his debt?
- What is the applicant has bad credit mortgages or bad credit refinancing history, is he still applicable?
All this needs to be thoroughly examined before applying for a mortgage.