How much will my payments be?
Your mortgage payments are based on many factors:
- The interest rate of the loan.
- The choice of a fixed or floating rate mortgage.
- The amount to be borrowed;
- The frequency of payments;
- The duration of the loan;
- The amortization period.
- The best FHA mortgage lenders
Use our online calculator to determine the approximate amount of your payments.
Under the Manulife One account, you will make a fixed amount of repayment of any debt that exceeds 65% of the appraised value of your home, as well as the repayment of any debt assigned to a sub-account. Fixed-rate. You will not, however, make payments of a predetermined amount for the refund of your main account. All deposits in the master account automatically reduce capital.
What is the difference between a short-term mortgage and a long-term mortgage? What are the advantages of each?
Mortgages can have different durations, from 6 months to 10 years. Interest rates for short-term mortgages are generally lower than those for long-term mortgages. Short-term and long-term mortgages each have benefits, which may vary depending on the individual’s circumstances, preferences and stress tolerance. If you think rates may fall in the near future, you could choose a short-term mortgage, hoping to take advantage of lower rates when it comes time to renew your loan. On the other hand, if you expect interest rates to rise sooner, you could opt for a longer-term fixed-rate mortgage to “lock-in” that lower interest rates right away.
What is mortgage life insurance?
Mortgage life insurance, which can include a disability insurance cover and job loss (also known as credit insurance), is optional. It covers mortgage debt in the event of death, disability or loss of employment.
What is a credit rating and what is it for?
Your credit rating is the result of a numerical rating on a scale of 300 to 900 and reflects your ability to repay your debts. The higher your rating, the better the chances that your loan application will be accepted.
Factors affecting your credit rating include, but are not limited to, your bill and loan repayment habits, outstanding debts, credit card history, recent inquiries from best FHA mortgage lenders, and the types of debts you have. Several strategies can help you improve your credit rating. Here are the most common:
- Pay all your bills on time.
- Reduce your credit card balances to less than 50% of your available credit.
- Look for credit less often to prevent a large number of inquiries from being on your file.
- Examine your credit report to make sure it is free of errors.
You can obtain a copy of your credit report by contacting one of the following credit reporting agencies:
- Determine the amount you are able to pay
When you are looking for a home, start by determining:
- what you need (number of rooms, small or large yard, garage or street parking, etc.);
- the style or styles you like (single or condominium, semi-detached or isolated dwelling, etc.);
- where you want to live (downtown, suburbs, near schools, work or family, etc.)
and, most importantly, the amount you are able to pay.
These answers are the “wish list” that will guide your research. Be aware, however, that there is a price to pay for each item on this list. Large houses, for example, usually cost more than small ones, depending on their location. You must underestimate the importance of each point in relation to what it costs because the price is the decisive factor. Unlike any other type of purchase, paying more than you can afford for a home can cause you serious financial problems for a long time.
It is therefore very important to know how much you can contribute and stick to your budget. Here are several factors to consider when calculating this amount:
- your down payment
- your family income
- your other monthly payments;
- your estimated household expenses;
The closing costs.
To help you determine how much you can afford, best FHA mortgage lenders normally do the following two calculations:
Gross Debt Amortization (GDA) – This is the percentage of your gross family income (your before-tax income combined with that of your spouse) that is spent on shelter costs (mortgage payments, property taxes, fees heating, etc.). Your ABD coefficient should not exceed 32% of your gross family income.
Total Debt Amortization (DSC) – This is the percentage of your gross income (before tax) that must be spent on all payments you make to settle your debts. More precisely:
- Credit card payments;
- Car loans;
Any other personal loan.
The ATD coefficient should not normally exceed 40% of your gross family income.
To determine your ABD and ATD coefficients, use our online calculator. Do not hesitate to contact a representative of the bank.