Author: Ryann Cairns
A home is the biggest financial commitment most people will every make. The subject of monthly interest payments is an important one for buyers and sellers alike. The amount of the monthly interest payments will determine how much the buyer can afford to pay for the home, and it will affect who is qualified and not qualified to buy your home when you are selling.
Of course, monthly interest payments on a mortgage loan are affected by a large number of factors. Such things as the interest rate the buyer is able to obtain on the mortgage loan, the number of years of the mortgage loan, the down payment and the amount financed, will all affect the monthly interest payments on the mortgage. The interest rate is somewhat out of both the buyer’s and seller’s control, since it is largely determined by the home buyer’s payment history and credit rating.
The number of years for which the mortgage is financed will need to be determined by the buyer based on things like how much they can afford to pay per month and how long they plan to remain in the home. Obviously the larger the down payment the buyer can afford to make, the lower the monthly payments will be and the less interest the buyer will pay in the long run.
If a home buyer can afford to make a larger down payment than required, the amount financed will be less, and the monthly interest payments will be lower. Of course it pays to shop around anytime you are looking for a home mortgage loan. The interest rates and mortgage terms can vary widely between individual lenders and mortgage brokers, even those in the same neighbourhood.
If your credit and payment history is spotless, you will likely qualify for one of the lowest rates available on your mortgage. Of course, you will need to bring proof of all your sources of income to the interview with the mortgage lender. The lender will need to have verification of all your income in order to make sure you qualify for the mortgage you are seeking.
Be sure you know how much the monthly payments will be on your prospective mortgage. The monthly interest payments should not be so high that they put an undue strain on your budget or your lifestyle. Remember that a mortgage is not a short term loan. You will be paying off this debt for decades, and you will want to ensure you are comfortable with the monthly interest payments on the loan.