| What is a Mortgage? |
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Using property as security for a loan is a mortgage. The property is used to ensure that the loan is repaid.
There are three main things that the banks look for when determining approval for a mortgage.
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- Collateral - the property being mortgaged. The lenders will want to see what kind of
property it is, if it is in good condition for the age, and has no devastating problems.
- Credit - the lenders typically check your credit by way of the credit bureau. This
is a system that reports on your past loans and visas. Please click on the "what is credit" link to find out more.
- Capacity - The lenders need to know that you are able to make the payments. They do this by
confirming how much income you make.
There are a number of terms that are associated with getting a mortgage, please refer to the link on "terms".
People often wonder why the interest rate is lower on a mortgage than any other financing, this is because
the security is greater, reducing the risk to the lender. All loans are priced for risk, and because a
property is a very safe investment, it constitutes as a lower risk, therefore a lower interest rate.
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| Reasons to obtain a mortgage |
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Purchasing a new home or existing home
Refinancing to consolidate debt or renovate
Equity take out for investing
Financing an investment property
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If you have any questions, please feel free to call me anytime.
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What is Credit?  |
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