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When buying a home, the average borrower in Nova Scotia will likely require a mortgage. However, with so many different mortgage providers and types of mortgages out there, it can be hard to navigate the industry. Thankfully, we can help guide you through the process and make sure you choose the right option for your needs in Nova Scotia.
Read this to discover more about loans in Nova Scotia.
Types of Mortgages in Nova Scotia
Speaking of the various types of mortgages, this is one of the most important things to familiarize yourself with before you sit down with any lenders in Nova Scotia. Some types of mortgages will be perfect for other people, but might not work for you. Here is a look at a few of the most common types:
If you have a 20% down payment, you will likely be able to qualify for a traditional or conventional mortgage. This won’t require any sort of mortgage insurance and as a result, will be less expensive over time.
An open mortgage is one that is more flexible, in that it allows you to pay off your loan as quickly as you want, without any sort of penalty. The interest rates on these loans are generally higher, but they have the added benefit of flexibility, which is appreciated by homeowners in Nova Scotia who want to pay off their mortgage fast.
As you can imagine, closed mortgages are the opposite of an open mortgage. Most of these mortgages cannot be paid off early and the ones that can, have a lot of rules and restrictions. These often come with lower interest rates, so if you feel interest rates are on the rise, a closed mortgage might be for you.
To learn more about open vs. closed mortgages, look here.
Fixed Rate Mortgage
This is a mortgage where your interest rate will remain the same throughout the lifetime of your mortgage term. It is good for a predictable payment and if you feel that interest rates are going to rise, going with a fixed rate mortgage makes a lot of sense.
Variable Rate Mortgage
A variable rate mortgage is one where your interest will shift with the market. So if the market rate drops, so will the rate that you pay. The payments here are often unpredictable, but if you like to gamble, it could be the right call for you. If you think rates will drop over time, going with this type of mortgage makes the most sense.
Interested in how much it costs to buy a house in Nova Scotia? Check out this infographic.
What Are the Payment Options Available in Nova Scotia?
In addition to the variety of different types of mortgages available in Nova Scotia, there are also different payment options available to you too. These include:
- Monthly Payments
- Weekly Payments
- Bi-Weekly Payments
- Accelerated Bi-Weekly Payments
The option that you choose will depend on how comfortable you are with frequent payments. Some borrowers in Nova Scotia will prefer to make a bigger payment once a month, while others might want to make a few bi-weekly payments that are smaller and more manageable. In most cases, the total amount you pay will remain the same, but with the accelerated option, you will be paying off your mortgage more quickly.
Click here to see some alternative mortgage financing options available in 2018.
Hidden Costs of Buying a Home in Nova Scotia
While many people in Nova Scotia mainly think of the mortgage when budgeting for a home in Nova Scotia, that is not the only thing you pay for. There is a multitude of different “hidden costs” that you should budget for when buying a home in Nova Scotia. These include:
- A variety of different taxes including property taxes, land transfer taxes, school taxes, and more.
- A home inspection will typically cost you a decent amount of money but is something that it is extremely important to do.
- The costs of moving could be hefty, especially if you are using a moving company and/or bringing a lot of furniture. A cross-country move can often cost thousands of dollars.
- Depending on the quality of your home, the renovation costs and maintenance costs need to be accounted for as well.
- Your down payment could potentially be tens of thousands of dollars, which is a large cost and must not be underestimated.
Take a look at our 2018 Guide to Budgeting.
What are the penalties for paying my mortgage early?
Where is the best place to get a mortgage in Nova Scotia?
How do I get a pre-approved mortgage in Nova Scotia?
Great Mortgages Made Easy
Interested in a mortgage in Nova Scotia? If so, feel free to reach out to Loans Canada, as we can help people from all across the country find a great mortgage.