You are planning a home for yourself, right? Congratulations!, you finally prepared yourself to buy your dream house out there in Canada. Since you are a First Time Home Buyers thus, you might be confused about what type of home loan you should pick. Even though if you have decided then this article can let you understand whether you have picked a valid loan as a First Time Home Buyers.
Don’t worry if you have picked the wrong option as your mortgage, you still have time to fix everything. Or you can contact someone line “Mortgage renewal service Edmonton” service provider to get it done for you. Now, let’s begin with the actual topic.
Types of Home loans for First Time Home Buyers
There are several types of home loan options for first-time buyers but, I have listed the most reliable and beneficial type of loans.
Open mortgages
This is a type of mortgage, that gives you some relief accordingly. As a lender, the institute will give you some liberty to pay your monthly mortgage payments. With that, an open mortgage allows you to give some extra money rather than fixed regular monthly payments.
But since, there are some demerits of open mortgages. Actually, the only demerit is that open mortgages have higher interest rates than the other mortgages. Open mortgages have the following features:
You can pay the whole mortgage amount before it’s maturity period.
You can pay extra money than the regular monthly fixed amount.
You are free to break the mortgage and can shift to any other lenders.
You can renegotiate the mortgage terms anytime.
Closed mortgages
Another form of mortgage is a closed mortgage, in this, the interest rates are little less than open mortgages and off-course you can’t put extra money in the regular monthly payments. But, closed mortgages have something to cheer you up.
Closed mortgages have the following features:
You can pay extra money every year but there is a limit and it varies lender to lender.
You will have the privilege to step out of your mortgage contract anytime.
I would like to suggest check the lender’s conditions before picking the best one for you.
Final Verdict
I know you are happy about your future home in Canada but I would like to say, first check all the conditions of the lenders and then decide which one is perfect for you. Besides that, also have a look over the type of mortgage you are picking because it is going to affect you in the long term. If your financial conditions are pretty good then you can go for a closed mortgage but if you feel like, your monthly payroll could fluctuate then go ahead with the open mortgage.
