Is a Mortgage Really as Simple as Rate-Term-Payment?

What mortgage can you afford

If we are really honest with ourselves, sometimes we make things more complicated than they really are or need to be. And sometimes, it feels like this is especially true when it comes to financial issues. Let’s take mortgage loans for example – isn’t it really just about the interest rate, term length and monthly payment? Well, yes, in fact those are the factors that will ultimately drive what you can buy and pay. But no, in terms of what you see on the surface things aren’t always that clear. Let’s explore it further.

We should start by saying, for 75% of the people reading this, a mortgage loan is probably as simple as rate, term and payment. This is most likely true for those with A+ credit, doing a simple refinancing, etc. However, for the remaining 25%, it can be much more complicated.

Down payment amounts, credit scores, income which might not be consistent, and current home equity (if applicable) are just some of the 30ish factors that will drive your final rate, term and payment.

In addition, closing costs, pre-paids, possible gifts (did your parents give you money for a down payment?), Private Mortgage Insurance, what sellers might be willing to cover, restructuring other debt – well, you get the idea – can all be factors on how the numbers finally shake out such how much you can finance or even your final payment total. Fact is, these factors may result in higher OR lower costs for you, depending on the flexibility and creativity with which your mortgage lender handles them.

That is why working one-on-one with a lender is crucial in exploring your entire financial situation. Understanding the balance – how they can affect each other – of rate-term-payment and what can impact each is important to know as early in the process as possible. Shopping for a mortgage lender should be as rigorous of a process as shopping for your new home. It may just allow you to get into the home of your dreams for less money than you imagined.

At CIBM Bank we understand your hard work, your commitment and the financial decisions you have to make on daily basis ¬– whether that be for your business, or buying or maintaining a home, or just your day-to-day financial-related needs. We also understand there are times you just need some help. And that’s what we’re here for. To help makes things a little easier for you, to provide experts who can walk you through the variety of options to best meet your particular needs, and to provide just a little more peace-of-mind. Call us or visit

The information expressed is being provided for informational and educational purposes only. It is not intended to provide specific advice or recommendations for any individual. CIBM Bank does not provide tax, legal, or accounting advice. You should carefully consider your needs and objectives before making any decisions. For specific guidance on how this information should be applied to your situation, you should consult your own tax, legal, and/or accounting advisors before engaging in any transaction.