For most of us, purchasing a home will be the largest investment we ever make. In a recent Government Survey, most Canadians don’t understand their mortgage or the terms of their mortgage. More than half surveyed failed to identify what a mortgage term, amortization period or time before renewal represented. How can this be? Are the terms just plain confusing or did they just not receive the proper explanation from the lender that approved them for the mortgage? There is a significant lack of knowledge and understanding.
It really is fascinating, I was speaking with a new client the other day. He had lots of money in his account but he had a loan on his used vehicle. He needed to pay off the car loan to be able to get the mortgage. When we discussed paying off the car loan, he thought the only way he could purchase a car was with a loan. This belief was because his parents always took a loan to buy cars, therefore it must be a requirement! It is very interesting where our beliefs stem from!
Just like the difference between fixed and variable rates. A number of consumers should be on a fixed rate term so they know exactly what their payments will be for the next number of years but it became trendy to go variable whether it suited your household or not. For example, right now you can get a 5 year fixed rate mortgage for 2.69% whereas the variable rate is prime – 1% or 2.95%. Why would you gamble if you are on a fixed income if you can lock your rate in for less?
I am a great sharer of information. If I can help you with your Mortgage so you know exactly what you are signing or if I can help you understand your current mortgage, please call me anytime.
Colleen Saunders is a 25 year veteran in the mortgage industry, serving Oakville, Burlington,Mississauga and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.