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Mortgage rate types

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natalie
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Mortgage rate types  Reply with quote  

Hi,
I am planning to take a mortgage for purchasing a new condo. I have never taken any mortgage, so I’m not sure about various things. I wanted to know about the various mortgage rate types, http://www.mortgagesmortgages.ca/rate-types/ . What would be the best mortgage rate for someone who is looking for low monthly down payments, also first timer ? My friend is of the opinion that fixed rate mortgage would be a good option, . Please advice.


Last edited by natalie on Tue Nov 29, 2016 3:28 am; edited 1 time in total
Post Tue Nov 15, 2016 5:10 am
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oldguy
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I agree. Rates are historically low and have been for few years, they aren't likely to get much lower. I would take a fixed rate loan for the longest term available. Avoid variable rate loans, they can rise quickly and you will be stuck with payments. And don't take a short term loan to get a low rate, pay slightly more and get a long loan.
Post Tue Nov 15, 2016 7:11 pm
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ken-do-nim
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quote:
Originally posted by oldguy
I agree. Rates are historically low and have been for few years, they aren't likely to get much lower. I would take a fixed rate loan for the longest term available. Avoid variable rate loans, they can rise quickly and you will be stuck with payments. And don't take a short term loan to get a low rate, pay slightly more and get a long loan.


If you know for sure you are only going to live somewhere 5-7 years, then doesn't a variable rate mortgage make sense? That's what my sister did right out of medical school. Variable rate loan for the first few years to have low payments and finish off residency, then they sold that house and got a larger one with a fixed rate loan.
Post Tue Nov 15, 2016 7:28 pm
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Petert0204
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Re: Mortgage rate types  Reply with quote  

quote:
Originally posted by natalie
Hi,
I am planning to take a mortgage for purchasing a new condo. I have never taken any mortgage, so I’m not sure about various things. I wanted to know about the various mortgage rate types. What would be the best mortgage rate for someone who is looking for low monthly down payments, also first timer ? My friend is of the opinion that fixed rate mortgage would be a good option, . Please advice.


Hi Natalie,
Congratulations on your decision! There are two types of mortgage loans you can opt for:

-Fixed Rate Mortgage
-Adjustable Rate Mortgage

Just look for some not-for-profit organizations such as a LUSO credit union for lower interest rates. Make sure you understand both these mortgage types before you apply for one.
Post Mon Nov 21, 2016 7:53 am
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LoriHicks
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Yes, the fixed rate mortgaged is better than other one; you will pay it easily up to the long term. Dewuchi.com
Post Tue Nov 22, 2016 1:14 pm
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oldguy
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quote:
If you know for sure you are only going to live somewhere 5-7 years, then doesn't a variable rate mortgage make sense? That's what my sister did right out of medical school. Variable rate loan for the first few years to have low payments and finish off residency, then they sold that house and got a larger one with a fixed rate loan.


Ken. Back in the 1980s, that recipe was the thought. But about the time that people wanted to sell (or refi), loan rates quickly rose to about 15%. So new buyers couldn't qualify, and the owners couldn't sell (except to cash buyers). And the owners who decided to stay learned that their payments (at 15%) nearly doubled and they could not afford to refi/stay (couldn't qualify to stay in their own house). A nasty Catch-22.

Your sister's story is probably more common than my 'horror' story - but the point is - both happen. You have to weigh the risk vs potential reward.
Post Tue Nov 22, 2016 4:38 pm
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