In this blog, we’ll explain some of the most popular mortgage myths that aren’t true! Whether you’re planning on buying your dream home for your family or thinking of investing in a Toronto home you need a mortgage for, read on to learn more.
1. The maximum amortization period is 25 years
The amortization period is the total time it would take to pay off a home’s value in full.
If your down payment is less than 20 percent of the home's value, your amortization period can be up to 25 years. If you can afford a larger down payment, your mortgage amortization period can be as long as 35 years.
2. Being pre-approved for a mortgage guarantees that you’ll be approved for one
Being pre-approved for a mortgage is a vital part of the home-buying process. However, this doesn’t mean you’ll get a mortgage from a pre-approved lender.
However, as long as you have provided truthful information about your financial situation, the lender will unlikely refuse to provide you with the funds you need for a mortgage investment in Toronto.
3. Your only option to get a mortgage is from a bank
This one isn’t true! When you hear about the mortgage rates offered, you may often hear about “The Big 5”, which refers to the largest Canadian banks.
However, there are many mortgage options beyond simply dealing directly with a bank. You can also work with a credit union or alternative lenders. Many people work with a mortgage broker, someone who will shop around on your behalf to get you the best mortgage rate they can.
4. The only upfront cost you need to worry about is your down payment
When you’re ready to buy a home, you need to have money put aside for more than just the down payment. You also need to account for something called “closing costs,” which are a variety of costs associated with buying a home:
A home inspection is to ensure there are no major structural problems with the home.
Lawyer’s fees to prepare documentation associated with buying the house.
Title insurance to protect yourself from fraud.
A land transfer tax. If you need a mortgage for a Toronto investment home, you’ll have to pay both a provincial land transfer tax and a municipal one.
No Matter What Your Mortgage Situation Is, We Can Help!
At Northwood Mortgage, we aim to help you find a way to afford a home. We have experience working with various clients, from self-employed people to those with bad credit or buyers looking for an investment property.
We shop around to ensure you get the best mortgage rate you can. We offer both fixed-rate and variable-rate mortgages and can help you whether you want to buy a commercial or residential property.
Give us a call at 888-257-8130 or contact us online today.