When it comes to shopping for real estate there's a lot you have to do in order to prepare yourself for the moment you actually get to call yourself a home owner. You have to hire a real estate agent, go over your finances to determine how much you can afford to spend on real estate, scout out potential neighborhoods, decide which features your new home must have and which ones you can live without, go to a lot of home showings and meet with mortgage brokers, just to name a few.

That's just a partial list but as you can see you have a lot of work ahead of you. Enlisting the aid of a real estate agent is something to consider early on in the process, as they are specifically trained and have a huge amount of experience in ticking all the boxes to get you from browser to owner with as little stress as possible. In the Toronto area, we recommend starting with a well-known and respected company such as Royal LePage, and then selecting an agent from their midst who feels like a good fit.

Applying for and being approved for a mortgage is going to be one of the most important things you're going to have to take care of during the home buying process and you don't want to screw it up and find yourself having to take on a second mortgage down the line.

In order to make sure that doesn't happen you should know a little bit about mortgages. The two most popular types of mortgages are fixed rate mortgages and variable rate mortgages.

A variable rate mortgage is a mortgage that has a fluctuating interest rate throughout the course of your mortgage loan. Pros to variable rate mortgages include the potential of paying lower monthly mortgage rates if the interest rates goes down, paying less, at least at the beginning of the mortgage loan, compared to fixed rate mortgages, and not having to pay an arrangement fee.

Some cons to the variable rate mortgage include the potential of having to pay more in case the interest rate goes up and not being able to properly budget your monthly finances in your soon to be new piece of property due to the uncertainty of the interest rate index.

What it all comes down to when it comes to applying for a variable rate mortgage is how much you're willing to risk. Do you think you can handle paying for a mortgage that will have fluctuating monthly payments that might actually increase over time? Or is that too much to handle on a monthly basis?

What we're trying to say is that in the end, the mortgage you chose to take on all comes down to your circumstances and how much you're willing to risk. Fixed rate mortgages are safer but variable rate mortgages tend to offer the best rates. Think long and hard about the decision before deciding which mortgage is right for you and your situation.

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