How to Minimize and Prepare for Some Common Mortgage Risks
Are the rock bottom mortgage rates enticing you? Do you think you are ready to move in to your very first home? It is true that now is the best time to go for a Canada mortgage because of the affordable rates and decent property choices, but there are a certain risks that one should not overlook.
No matter how much attractive a particular mortgage rate is; absence of assistance from a professional broker and lack of proper planning can prove to be hazardous down the road. Locking into a mortgage without thinking can not only lead to defaulting, but also foreclosure in the long run.
However, the good news for homebuyers is that there are a lot of measures that one can take to minimize the risks to a bare minimum and ensure a smooth and worry-free payment schedule. Keep reading to explore valuable tips from experts that will definitely help you pay off your debt and secure your home without compromising on your budget and finances!
Fluctuations in the Mortgage Rates
Whether you are opting for an adjustable mortgage or a fixed plan, the fluctuations in the mortgage rates can be an unwelcome addition. As any mortgage expert will tell you, the Canadian real estate market is known for it’s up and down behavior and as a particular mortgage lasts up to 25 years on an average, you should be ready for changes in your payment plans every now and then.
Plan and discuss your Canada mortgage with a reliable broker beforehand so that you are fully aware of the market trends. Look into all the other factors of the mortgage aside from its rate – i.e. the term, amortization and type of plan. This way you can judge the affordability of your mortgage and decide whether or not you will be able to keep up with the payment fluctuations in the long run.
Keep some savings handy and plan your budget accordingly so that you always have some extra emergency fund to deal with any unfortunate circumstances.
Last but not the least, put down a sturdy and decent down payment to secure your home equity and save on hefty interests.
Loss of employment or decline in your income can make it harder for you to complete your payments in time. Make sure that you have some extra savings in hand, or explore alternative payment options with your lender or broker to stay on the safe side.
Loss in Property Valuation
If you are planning to buy the property as an investment venture, make sure that you have researched the neighborhood promptly. Loss in valuation of your property down the road can make your investment go in loss. Furthermore, always keep a look out on the maintenance and repair costs which you will have to pay to spruce up the property when you sell it off.
Closing costs, inspection fee and other expenses related to the home often come as a surprise to first time home buyers. Therefore, it is a good idea to consider and account for some extra expenditure when you are going for your first Canada mortgage.