#WednesdaysatHomeLove – Canadian Mortgages and Lenders

#GoodReads – “Your Inside Scoop on Canadian Mortgages and Lenders” via Canadian Real Estate Magazine.

“…What is a Mortgage?

A mortgage is a type of loan often given by a lender to a borrower to buy a home or other property. Since the loan is secured against the property, it allows the lender to take possession of the property if the borrower defaults on the loan (doesn’t repay the loan on time). Normally, a mortgage is a loan for a large dollar amount and is paid off over many years.

What is a Mortgage Lender?

Mortgage lenders are institutions or people providing loans to buy or sell properties. Mortgage lenders require approvals that differ depending on the institution. There are various types of financial institutions that may act as mortgage loan holders with differing regulatory requirements. Mortgage loan conditions are established by borrowers’ credit history, employment ratio, and debt-to-income ratio.

Let’s Review Mortgage Basics

Interest rates are the percentage that the borrower pays to their lender for the privilege of borrowing their money.

An amortization period is a process of spreading out a loan into a series of fixed payments. The loan is paid off at the end of the payment schedule.

Scheduled payments otherwise known as fixed payments are the monthly payments required that are listed individually by month for the length of the loan.

Principal repayment comes after the interest charges are applied; it’s the remainder of the payment goes toward paying off the actual monies borrowed. Often called the mortgage principal or principal amount, this is the amount borrowed whether through a conventional mortgage lender in Canada, online mortgage lenders, a private lender, or other mortgage lenders.

Interest expenses can be defined as a portion of each scheduled payment going toward interest. This is calculated by multiplying your remaining loan balance by your monthly interest rate…”

To read the full article, click here.