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Things to Consider in Homeownership and Mortgage



Homeownership is one of the greatest achievements we can ever have in our life. Buying a home can be considered the easiest way for ownership and understanding the mortgage options must be considered in accordance to the government requirement and requisites.  For the past years, real estate value affects home buyers to qualify for mortgage since the 2.75 insurance premium should equate to 2.25 homeowner equity, this means that minimal loan amount should be paid down and majority of the payment is for the interest. Planning for mortgage principal pay down is important and should be considered for a long term objective.


There are several things that may affect the real estate value which home buyers looked to, this includes unemployment and the location of the property itself. The rise in number of unemployment triggers more people to sell their homes and the deficiency on job security lowers the property value. A strategic location of the home increases its value wherein all the possible daily needs and wants is available, therefore, a real estate in a city which has many job opportunities, companies, and diverse in multiple industries is worthy.


For the past 10 years unemployment raised real estate value in Toronto significantly that Canadian real estate investors and homeowners enjoyed giving them a low interest rates and affects the Gross Development Product (GDP) growth. To save the economy from depression, many governments worldwide took aggressive money printing that results high inflammation. This inflammation spike the interest rates this means that of starting over with high interest rates and unsafe loan. Canada’s experience on high inflation gives the Bank of Canada the option to keep low rate benchmark due to this uncertainty which originates out of Europe.


When buying a home, it is advisable to move in at least 5 years if the costs are in account because the home seller might discover that they may be short on funds and would mean of longer staying in their present home. In some aspects, refinancing mortgage on a low interest rate is not advisable. Before deciding to refinance, you must determine what you need to accomplish, refinancing does not pay the debt. Usually, cutting the interest expense is the main purpose of refinance, which gives the homeowners the ability to extend loan to years by trimming monthly payment. However, considering the factor of a low interest rate and extend the mortgage term will still project more interest.


Remember that buying a home needs a careful planning and wise decision and needs more cash. Managing cost will help you realize that there is no such thing like a free lunch, and there is nothing such as mortgage. Do not forget other expenses like private mortgage insurance and if your mortgage ratio is greater than 80 percent of the home appraisal value might add to refinancing cost. Meanwhile, refinance will assist you to harvest more money and it is important to determine the cost that eat those savings.

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