home. Stress overload can lead to poor health resulting in missed payments. Missing payments can result in destroyed credit or even losing your home. It may be better to rent if your life is in flux and then buy when your stress levels are lower. Are you ready for commitment? Are you ready to make lots of decisions, from picking a real estate agent to writing an offer on a home you want? Do you feel ready to choose a home that will have most of what you are looking for? Its not easy to get 100%, there is usually some give and take. (i.e., floor plan, price, condition, proximity to schools, shopping, recreation, etc.)? Are you ready for devoting the time and attention to maintaining a home (i.e., leaf-raking, grass-cutting, appliance maintenance and repair, etc.)? Taking care of your biggest investment can be gratifying, but only if you’re ready.
FIXED RATE OR VARIABLE
If you are like most people, you may want the peace of mind knowing how much the mortgage payment will be each month. A fix rate mortgage maybe the best solution for you that you can lock in for 3, 4, or 5 years. Over the past 30 years a variable rate mortgage has proven to save the most interest, but it comes with risk. Your mortgage payment will float with the Bank of Canada rate. Some variable mortgages offer a "prime minus" rate so it could be ".5%" below prime for example. You should pay attention to the payout penalty when select a mortgage. If you decide to pay the mortgage off early or sell your home the penalties can be significate. The lenders have a right to charge (IRD A.K.A. Interest Rate Differential) or (3 months' worth of interest) whichever is greater. The penalties on variable are 3 months interest but fixed rates are usually IRD which can be substantial. You build equity. Some of the monthly mortgage payment goes toward the loan’s interest the remainder pays down the loan
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