The Mortgage
The decision to buy a home can be one of the most valuable and important investments one can make. Therefore it is important that you are familiar with the mortgage process so that you can wisely finance your home. Essentially, a mortgage is just a loan that is used to finance the purchase of property. The property itself is used as security to ensure repayment until you have repaid the entire amount plus interest.
There are many types of mortgages on the market and finding the right one can be an overwhelming project. The best approach is to divide the process into manageable tasks. Sit down with a mortgage professional and examine the advantages and disadvantages of all available options to determine which product is best suited to your current situation and future plans.
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Mortgage Terminology
Some commonly used terms and concepts of a mortgage.
- Amortization Period:
The period of time after which, if all monthly payments are made on time and in full, the loan will be paid out. - Down Payment:
The amount of money provided by you, the purchaser toward the price of the property (not including legal fees or other acquisition costs). - Interest Rate:
The actual cost of borrowing money, charged as a percentage of the outstanding amount owed. Usually compounded on a monthly basis. - Mortgage Amount:
The total amount of money to be borrowed by you, the purchaser, and applied toward the price of the property.
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