The decision to buy own home is one of the most important and toughest decisions of one’s life.  A top reason for the difficulty includes the mortgage problem. To know more about mortgage tips, one may Google up ‘Windsor Mortgage’ and get relevant results.

First Home Buyer Mortgage

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Buying a home is never an easy job. This is because one needs to invest a huge amount of money to buy the home and gather one lump sum amount is not possible for everyone.

Especially for the First Time Home Buyers, this decision is very crucial and difficult to take, because they have never gone through the process of a mortgage before and have never heard or thought about such a huge amount all at once.

Mortgage Refinance

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Before discussing the in-depths of a mortgage, let us start by first understanding the meaning and concept of Mortgage.

Simply speaking, Mortgage can be defined as the loan which one will use to buy his/her home.

Mortgages are quite similar to other loans in the sense that:

  1. There is some amount of money borrowed;
  2. A rate of interest is paid to the lender of the money;
  3. Lastly, the numbers of years over which the loan must be repaid are pre-determined.

Mortgages are different from the other type of loans in the sense that mortgages are specifically made use of for the purchase of real estate only. Further, Mortgages can be customized.

Today, most of the mortgages are offered on a repayment basis which means that one has to repay a  part of the capital and the interest every month. Then, at the end of the predetermined period, which is generally between 25 and 30 years, our mortgage debt will have to be totally repaid.

Some lenders allow us to take out an interest-only mortgage. According to it, our monthly payments will only cover the interest.

Mortgage Approval

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But in an interest-only mortgage, it is important to take care that we have a plan in place so that we can afford to repay in full, the entire amount we had initially borrowed, at the end of the term.

Many of the money lenders have already withdrawn from the interest-only mortgage services, while others have tightened their criteria, indirectly making it harder to get them.

This is because of the fact that thousands of people have taken interest-only mortgages but they have no sources or repaying them.