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           MORTGAGE BASICS

Whether you are buying your first home, trading up to a larger home or building your dream home, or even trading down once the kids are out on their own, a house is probably the single biggest investment you will ever make. As almost everyone who is buying a home will need financing, they are also interested and often need guidance on what to look for a mortgage and how they can pay the least amount of interest over the term of the mortgage. A mortgage specialist at CanadianMortgageRates.com can help. We'll let you know how much you can afford to spend and what your payments will be, suggest ways to save thousands in interest over the life of the mortgage, and present the special programs that some borrowers could participate and save from.

What is a mortgage?
A mortgage is a loan that uses a property as security to ensure that the debt is repaid. The borrower is referred to as the mortgagor, the lender as the mortgagee. The actual loan amount is referred to as the principal, and the mortgagor is expected to repay that principal, along with interest, over the repayment period (amortization) of the mortgage.

A mortgage can be used for financing many different things, including:

  • Purchasing or constructing a new home
  • Purchasing an existing home
  • Refinancing to consolidate debts
  • Financing a renovation
  • Financing the purchase of other investments
  • Financing the purchase of investment property

Since a mortgage is a fully secured form of financing, the interest you pay is usually less than with most other types of financing. Many people use the equity in their homes to finance the purchase of investments. Using a Secured Line of Credit, or a fixed-rate mortgage, the interest costs are lower, and they can even write off those interest costs against their taxable incomes.
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