Mortgage loans are given upon provision of collateral. You need to provide a property as surety to get this loan. When you repay the loan, the property will be free from the holds of the lender. Mortgages are given by the government as well as private financial institutions. Even private lenders can advance such loans.
If you need a mortgage, there are a number of things you should know. These include:
o Most lenders will only advance about 70 percent of the total value of the mortgaged property. Do not expect more than this value. If your building is vacant at the time of applying for a mortgage, then the value of the loan may reduce. For a land mortgage, do not expect to get more than 50 percent of its value.
o If you want to be trusted by the lender and be sure of getting a mortgage, you need some amount of cash investment in the prospective project. This is known as a down payment. Most lenders do not advance mortgages if you are not invested your money.
o Lenders also consider your financial status and ability to pay back the loan. One thing to remember is that these loans are private. So, if you do not have a way of paying it back immediately, you may lose your mortgaged property. A CMHC mortgage calculator should be of use to you.
o While not a requirement among most lenders, it is important to have a good business background to get the mortgage loan fast. Most lenders today tend to work only with good businessmen. Inasmuch as you may have property to provide as collateral, most lenders will not work with you if you do not have a proven business track record.
To get a mortgage easily, you can use a broker. Here are three things you should know when you opt to use a mortgage broker:
o Some lenders do not have branches. They only deal via mortgage brokers
This is an advantage of using a mortgage broker, so don’t miss out on the opportunity.
o Find out the basis in which they issue their recommendations
Every time a mortgage broker sells out a loan, he/she gets paid a commission. Therefore, ask several questions on the commissions they get.
o How does the mortgage broker make you feel?
You should feel confident about the individual organizing your mortgage. If you don’t feel right about them, then don’t risk it.
It isn’t hard to find that right person who can secure a great mortgage deal for you, once you know what to look for in a mortgage broker. Look up home affordability calculator Canada online to know your options for tools that can make it easier for you.
Visit http://www.ehow.com/how-does_4565081_a-mortgage-work.html to learn more about how mortgage work.