Getting your first house is an extremely stressful experience. You will need to learn a lot of new words and phrases to get through the experience successfully. To help you out, Simply Adverse has created this helpful infographic below.
The first phrases you’re going to need to know about are the three types of interest rates. So, you can get a fixed rate mortgage, a variable rate, and a protected variable rate. Fixed rate is a rate that won’t change throughout the whole time you have a mortgage. This is different to a variable rate, which as by the name implies, the rate varies depending on the market rate. Finally, you have a protected variable rate. This rate can fluctuate like a variable rate, however I cannot go over an agreed figure.
You can also get open and closed mortgage. An open mortgage allows you to pay off your mortgage all at once or in parts without receiving any penalties. A closed mortgage is pretty limited, as it doesn’t allow you to pay off your whole mortgage at once or large chunks. The advantage of this is that they have lower interest rates.
The next two types of mortgage to keep in mind is the conventional and high-ratio mortgages. A conventional mortgage is basically a loan that is up to 80% of the value of the property, this means that you have to pay at least 20% upfront for the property. A high-ratio mortgage is a loan that is over 80% of the price of the house. This means that you can also put down a lower down payment on the property but, you will have to get some mortgage loan insurance.
To learn more about mortgages, check out this infographic below.