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 Sandy and Judy Hines 902-877-4668 902-489-4663 sandy@sandyhines.com |
DECIDING ON A MORTGAGE TERM
The length of time for which the interest rate is fixed is called the term. Most mortgages have terms of six months to five years however there are some longer terms available. The most common term is 5 years. The interest rate usually gets lower with the increase in the term you take. For example a 1 year term would have a higher rate than a 5 year term usually. There are exceptions because the rates are always changing
Open versus closed term
An open mortgage is one which allows payment of the principal, in part
or in full, at any time without penalty. Open mortgages tend to be for
a short term - usually six months or one year. Since open mortgages offer
greater flexibility than closed mortgages, they usually have a higher
interest rate.This might be to your advantage if you were expecting a
large amount of money in the near future that you were intending on paying
down your mortgage with such as a bonus or inheritance.
Variable rate mortgages
Variable rate mortgages have become extremely popular. Most lenders
say that is what they personally have. The way these mortgages work is
that the interest rate is usually locked into the prime lending rate.
The mortgage interest rate you pay is often .5% or .75% less than the
prime lending rate.This varies constantly and between lenders as well.
This usually results in the mortgage rate being significantly lower than
Fixed Rate mortgages. The downside to these mortgages is the prime rate
goes up and down and so does your mortgage payments. Most lenders agree
over the life of the mortgage this can be a great way to go but it's a
gamble. You have to be prepared for the ups and downs of rate changes.
Talk to your lender about this option to see if it is right for you.
Short versus long term
When interest rates are either high or falling, there is a tendency
to choose a shorter term mortgage. This strategy pays off if you can renew
at a lower rate six months or one year later.
You may want to consider a longer term mortgage if interest rates are
rising, could not afford higher payments if rates were to increase or
if you want to keep your mortgage payments the same for a longer period.
Locking in your interest rate while you are looking for a property
When you apply for a certain mortgage, you'll receive an interest rate
that is usually guaranteed for up to 90 days or longer. The interest rate
on your mortgage will be the lesser of the rate at application or on the
day before closing. If rates increase, you are protected. If rates decrease,
you should receive the lower rate. So it is a good idea to get your mortgage
pre approved as soon as possible. You can only benefit from doing this.
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Location: West end Halifax
is not really a subdivision but more of a geographical area of Halifax.
It is located on the peninsula of Halifax close to the universities, hospitals
and downtown Halifax. Quinpool Road divides South end and West end Halifax.
The area that is nouth of Quinpool is referred to as West End. It is one
of the most expensive (although considerably lower priced than the south
end) and sought after areas of Halifax because it is so close to everything
and such a beautiful area. |
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