What is a Mortgage Payment?
The need for mortgage loans
Mortgage loans are usually taken by pledging a real estate or any other property. The immovable asset acts as the security for the loan. The borrower has to make regular payments to the lender for the interest charged on the principal. The interest rate might depend on the Annual Percentage Rate
. The mortgage payments are usually done every month.
The interest charged can either be fixed or variable. In fixed rate, the interest rate is fixed one time and does not change during the course of the loan. Variable interest rate
is one in which the interest rate depends on the current financial market. The lender can repossess the property that was placed as security if the borrower defaults on his payments. The lender can even foreclose the agreement on certain conditions so that the lender takes full control of the property.
Mortgage payment in Canada
The mortgage payments in Canada to be given by the borrower depend on the credit score of the borrower. The borrower might also go for a credit report for the borrower to ascertain his capability to repay the mortgage. Mortgage payments in Canada are mostly monthly payments
and the interest can either be fixed or variable. There are numerous sites those offer mortgage calculators to help you with mortgage payments. The calculator gives a detailed account of the amount to be paid and the time period to which it has been amortized
The time period for which the loan is spread depends on the type of mortgage and the confidence of the lender on the borrower. The payment details and how it may increase is also provided by these calculators. The websites of most banks provide this feature and a lot of financial websites allow you to compare mortgage plans as well. There is special software available for download which boast of helping you in your mortgage payments as well
Options for those facing difficulties
The recent financial crisis has got the attention focused on the various options that a person can use if he is unable to pay the mortgage payments. These options might be very useful for those facing financial troubles like unemployment or bankruptcy. Mortgage payment Protection Insurance is a special scheme for those who face unemployment. A period of time is given to the borrower to set right his finances and help is provided in repayment of the mortgage payments. The protection extends till the borrower is able to find another employment. After that the premium must be paid for the insurance.
The protection however will not be valid if the borrower gets fired or dismissed from the company for unethical behavior or misconduct. This protection is available only if the borrower loses his job as a part of a job cut. There are various other options available for those faced with financial difficulties. Mortgage payments must be regularly paid and any defaults on it will result in repossession or foreclosure thereby loss of property. Mortgage payments are an important part of the financial world since most people would not afford a one-time payment for the purchase of their homes. What is a Mortgage Payment?