Mortgages Ancaster FAQ
Frequently asked mortgage questions by residents of Ancaster include:
What is a mortgage or home loan?
A Mortgage is a legal contract made between a willing lender and a borrower which uses equity in real property as collateral to secure the loan. The lender can take possession of the property if the borrower fails to meet their repayment obligation.
What is a mortgage refinance?
Mortgage refinancing is when a borrower uses money from a refinanced loan to pay off an existing home loan in order to benefit from lower interest rates, restructure the financing or take money out of their built up equity.
What is a home equity loan?
A home equity loan lets the homeowner take out a secured loan based on the current appraised value of their property less any open mortgage amount and other secured loan balances. Homeowners have varying needs for borrowing on the equity of their homes including renovations, remodelling, investing, debt consolidation, college education, and the financing of other large cash outlays.
What is a home equity line of credit( HELOC?)
Home equity lines of credit or HELOCs give homeowners access to an open line of credit and interest only accrues on the amount outstanding rather than having to borrow a large fixed sum. In many ways a line of credit is more flexible with regards to repayment terms than an outright home equity loan.
What is the difference between a mortgage broker and a mortgage banker?
A mortgage broker is an entity that understands the local mortgage market, has resources that go above and beyond just shopping the best rates at banks. Mortgage brokers arrange the vast majority of home loan transactions. Mortgage brokers have access to hard money lenders and other options for those with bad credit, self-employed individuals or other special situations.
What is a fixed rate mortgage?
A fixed rate mortgage is a home loan with a fixed interest rate and fixed monthly payments that do not change over time. This may be a little misleading since most fixed rate loans are issued for a 5 year period at which time the mortgage resets to the current fixed rate, which could be significantly higher.
What is the adjustable rate mortgage?
ARMs or adjustable rate mortgages, vary their monthly payments by the current interest rates. If rates go up, so do mortgage payments, if rates come down, mortgage payments decrease. Typically an adjustable rate is lower than a fixed rate mortgage since it comes with less mortgage rate risk for the lender.
Call Mortgage Medics for your mortgage questions.