Taking out the right type of mortgage is essential to seal the best deal for your house purchase. The type of mortgage you require heavily depends on your situation and the motive for your purchase. Listed below are the major types of mortgages you can take out.
This type of mortgage is suitable for self-employed people and is searching for a house to buy. However, if someone happens to be self-employed, many services render their expenses under the category of extra income. One of the major advantages of this sort of mortgage is that the approval for this deal will be dependent on your credit history instead of your business history, and the application process itself is fairly simple and easily achievable. Moreover, nowadays, many mortgage services do not necessitate proof of income. However, if you happen to have a weak credit history, the approval might be hard. Nevertheless, if you are a self-employed person and meet the appropriate requisites, this might be the right solution for you.
Long-term mortgages are for those cases where the loan is supposed to be paid over three or more years and is optimum when the current interest rates are the most viable. This type of mortgage is best suited to those who are on the lookout for a long-term investment. However, a downside of this category is that you might have to pay more even if the interest rates decrease in the stipulated time period due to prolonged time. If you are a buyer looking for a long-term investment quite far into the future, this category is the correct fit for you.
The opposite of the aforementioned kind of mortgage, this type is for a lesser amount of time, roughly two years or less. A short-term mortgage is a feasible alternative to the long-term option. Under this type, you are offered a much lower rate of interest. However, this will not be an ideal choice if you are planning to hold onto the property being mortgaged for a long time. Additionally, if the interest rates increase at the time of renewal, you might have to pay a lot more borrowing costs than the estimated amount. If you are someone who believes that an initial low-interest rate is a better alternative to the risks associated with rates increasing over a period of time, this category is best suited to your proclivities.
This is an option that permits you to receive cashback on the day your mortgage is advanced. This option is made available under varied conditions—the amount you receive as cashback is dependent on the amount of your mortgage. The average rate ranges from 4 to 7% of the mortgage. You can utilize this cash for associated actions such as moving costs, renovations, repairs, legal fees, etc. A precondition of this type of mortgage is that you will have to carry out the entire term despite any potentially negative circumstance. A cashback mortgage is ideal for first-time homebuyers who require extra cash on the side for additional purposes.
The entire list of the type of mortgages is a lot more exhaustive. If you have any queries, or if you need a reliable mortgage lender service, Montreal’s Best Mortgage Brokers can help you find a solution for all your requirements and get you the best deals on the table.