“I always felt very secure and very safe with real estate. Real estate always appreciates.” - Ivana Trump
Real estate in the GTA (Greater Toronto Area) has seen significant growth in the past few years. There is a lot of questions in buyers and sellers mind whenever they want to take some action. In this blog post and the attached video, I am going to express my knowledge on 3 of the most important questions that first time home buyers are curious about.
The bank interest rate for home loan varies from bank-to-bank. Normally, there are two types of loans: variable and fixed term. The interest rate for variable term is generally significantly less than the fixed term. The variable term is expressed as prime rate plus or minus some percentage amount but as prime rate is changeable, the variable term loan might increase. The prime rate is currently at 2.45% for the big five banks. Please refer to the attached video below to explore what the top 5 banks are offering right now.
2) How to compute your mortgage?
To compute the mortgage, the following information is needed: asking price, down payment, amortization period and mortgage rate. The down payment decides how much mortgage insurance has to be paid. The mortgage insurance is waived for down payment of 20% or more. The amortization period is directly proportional to monthly mortgage payments, i.e. the bigger the period, the lesser the monthly payments. The mortgage rate is the bank interest rate explained earlier.
3) How much could you qualify for based on your income?
Getting a mortgage pre-approval from mortgage lenders or mortgage brokers is a wise task. They look at assets, income and level of debt as a means of pre-approving/qualifying mortgage. It can be approximated using mortgage affordability calculator and providing the required inputs as shown in this attached video below.
Finally, there is a plethora of queries as well as speculations when it comes to real estate business. As this is the most important investment for an individual or family, things must be clearly understood by all associated parties. This blog post and the video just tried to explain 3 of the zillions of questions that people have regarding real estate.
Thank you for your time!
Good Luck. 😀
References
- https://www.mortgage4canadians.ca/index.php/blog/post/79/famous-real-estate-quotes-from-famous-people
- https://www.pexels.com
- https://www.ratehub.ca
- https://www.savvynewcanadians.com/prime-rate-canada/
