![]() |
![]() |
Mortgage Information |
|
![]() |
![]() |
Choosing The Right Mortgage For YouJohn Carle & Sharon Gregresh This article will help you understand the differences between a variety of mortgage options. There are many different mortgage products offered by the various lending institutions in Canada, so you may not know what features to look for. As youll see, each type of mortgage has slightly different features which appeal to a variety of different preferences. For example, some home buyers take comfort in knowing that the amount of their mortgage payments will be the same throughout the entire term of their mortgage. Other home buyers may be willing to accept some fluctuation in the amount of their mortgage payments in exchange for the potential long-term savings or the change to pay off their mortgage faster. The right mortgage for you in the one that best matches your overall comfort level and fits with your income and lifestyle. Conventional or High Ratio A conventional mortgage is a loan for no more than 75% of the appraised value or purchase price of the property, whichever is less. The remaining amount required for a purchase 25% comes from your resources and is referred to as the down payment. If you have to borrow more than 75% of the money you need, youll be applying for what is called a "High-Ratio Mortgage". Heres how it works: You must have at least a 5% down payment when you buy a home. Any down payment between 5% and 24% is considered a high-ratio mortgage, and the mortgage must be insured by the Canadian Mortgage and Housing Corporation CMHC or GE Capital Mortgage Insurance Company GEMICO. The insurer will charge a fee for this insurance. The amount of the fee will depend on the amount you are borrowing and the percentage of your own down payment. Typical fees range from 0.5% to 3.75% of the value of your home. This amount can be paid up front or added to the principal amount of your mortgage. A Mortgage Specialist or Mortgage Broker can help you determine the exact amount of the fee. Fixed Rate or Variable Rate Mortgage When you take out a fixed-rate mortgage, your interest rate will never change throughout the entire term of your mortgage. As a result, you will always know exactly how much your mortgage payments will be and how much of your mortgage will be paid off at the end of your term. With a variable rate mortgage, your rate will be set in relation to the lending institutions Mortgage Prime Rate at the beginning of each month. In other words, it will vary from month to month. Historically, variable-rate mortgages have tended to cost less than fixed-rate mortgages when interest rates are fairly stable. When rates change, your payment amount remains the same. However, the amount that is applied toward interest and principal will change depending upon the interest rate that month. If interest rates drop, more of your mortgage payment is applied to the principal balance owing. The can help pay off your mortgage faster. However, if interest rates rise, more of your monthly payment is taken up by your interest payment. Short-term or Long-term The "term" is the length of the current mortgage agreement. A mortgage typically has a term of six months to 5 years. Usually, the shorter the term, the lower the interest rate. A "short-term" mortgage is usually for two years of less. A "long-term" mortgage is generally for three years or more. Short-term mortgages are appropriate for buyers who believe interest rates will drop at renewal time. Long-term mortgages are suitable when current rates are reasonable and borrowers want the security of budgeting for the future. The key to choosing between short and long term is to feel comfortable with your mortgage payments. After a term expires, the balance of the principal owing on the mortgage can be repaid, or a new mortgage agreement can be established at the then-current rates. Open or Closed Open mortgages can be paid off at any time without penalty and are usually negotiated for very short terms, They are suited to homeowners who are planning to sell in the near future or those who want the flexibility to make large, lump-sum payments before the end of the term. A closed mortgage has a locked-in interest rate for the full term of the mortgage. Most first-time home buyers prefer a closed mortgage because they want to enjoy the comfort of steady, predictable mortgage payments. If you want to re-negotiate your interest rate, or pay off the balance, you will need to wait until the maturity date or pay a penalty.
| ![]() | ![]() | ![]() | RELATED ARTICLES A Better Way To Watch Your Credit Reporting Are you a victim of any credit card fraud or identity theft Then you definitely need an enhanced defense from those menaces. You can get superior security from http://www.gotocreditreport.com. Actually, those financial offenses take place due to the lack of knowledge of your personal credit status. But, with GotoCreditReport.com , you will get an in-depth analysis of your personal credit with speed and accuracy. Thanks to our comprehensive credit service, we will relieve you from credit worries. Craving for Financial Freedom Have you ever felt trapped in a Rat Race and wished to retire quickly but rich Love, Marriage and Money The f-word. Finances. Combining love and money may be the biggest stumbling block on the path of true love, creating more rifts in relationships than in-laws, drug and alcohol addiction, or infidelity. Unintended Consequences Direct Answers - Column for the week of May 26, 2003 Could You Be A Workaholic If you need to put on boots and grab a lap-top computer to relieve yourself at night, you might be a redneck workaholic. Credit and Debt Relief--A One Stop Solution Amy Wright, 34, was extatic when her realtor showed her the three bedroom townhome overlooking the lushious golf course. It was exactly the home she was looking for. The interior was sunny and bright, with a newly remodeled kitchen, spacious bedrooms, and the perfect little study area to set up her new home office. It had a spectacular pool and a lovingly tended flower garden. Best of all—the seller had to move immediately, so the home was a steal and miraculously within her budget! Amy was already making moving preparations when suddenly, a devastating blow paralyzed her plans. Her credit application for a mortgage had been denied. She couldn’t understand how this had happened—just a year ago, her credit had been almost perfect! The last year had been a little tight, and sure she had a few late payments here and there…but she had no idea it was so bad that now she couldn’t even get the home of her dreams. Stopping Home Foreclosure A Foreclosure Prevention Service has numerous ways it can help you deal with the foreclosure process. Under the law, you have a right to remain in the property for a certain period of time. If you can’t pay the full amount owed without creating a hardship for your family you need a legal review of your situation, your rights, and your choices before you agree to anything. Protect yourself and your family. Should you choose to refinance Refinancing has become a valid option for many individuals with high interest rates on their mortgage. Refinancing is essentially a replacement loan, with a different lender and hopefully a lower interest rate. Profits With Rental Properties So you are interesting in becoming a landlord Investing in rental properties can be an exciting and very profitable business. Not only can real estate provide current income through rental property but it also can increase your personal wealth or networth. Make no mistake, this is not a sure thing to easy money and investing in real estate is not for everyone. There are risks as with any business or investment but with careful research and the help of a real estate professional you can find the right property in the right location for maximum return on your investment. Five Sure Fire Way to Secure Your Financial Future “You can be poor when you’re young, but you can’t be poor when you’re old.” That was the tag line used some years ago in a financial services television commercial. Lesson 2: How To Find Profitable Niche Markets There are thousands of potential areas that you can focus on when you are starting a new Internet business. Some are likely to be hugely profitable; others will probably not make you very much money. So how do you choose an area that is going to be profitable to you where there’s hopefully not too much competition Top 10 Ways to Avoid Loan Fraud Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud. Below youll find the top ten ways to avoid becoming a victim yourself. How To Market Your Home For A Quick Sale and High Price Marketing can be one of the most frustrating things to do when you are selling your home without a realtor. Here is a quick checklist to help you: Understanding Real Estate Terminology Purchasing a home can be a complicated and confusing process, especially for first-time buyers.Throughout the process, first-time home buyers will encounter a variety of unfamiliar real state terms. There are several key terms associates with purchasing real estate that are helpful to learn. Are You An Innocent Victim of These Popular Myths Misconceptions, misinterpretations and just plain “untruths” are floating about income taxes. Believing them could be costing thousands of tax dollars! How To Make Affiliate Sales In 15 Minutes If you are one of the 98.6% of affiliate members that never make one cent from affiliate sales or make small $5.00, $10.00 commissions, then this article is for you. Even if you are making nice checks, this will interest you. Real Estate Professionals Need You to Write for Them! Ask yourself these questions:Are you an experienced writerDo you want to stay at home to writeDo you want to work for yourselfDo you learn new things quicklyAre you interested in a broad number of subjectsDo you feel like you’re being pigeonholed with your current writing and you want to branch outDo you have a flair for marketing How To Read Your Credit Report The Fair and Accurate Credit Transactions Act, signed into law on Dec. 4, 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus -- Equifax, Experian and TransUnion. 5 Magic Points: Should I BUY or RENT my HOME Buying a Home is the American Dream. It is more than a place you put your hat at the end of the day. It defines you, protects you, and prospers with you. Yes, Home Ownership is a noble pursuit, but it always starts with this first, important question: Should I buy or Rent my Home The answer, surprisingly, is not so obvious. Credit Traps Snag Consumers Nearly 20 years ago I worked for a small consumer advocacy organization in Washington, DC. Each week we received sacks full of mail from consumers across the country requesting our list of credit cards with low interest rates and no annual fees. If you wanted a low interest rate on a credit card back then, you often had to apply to a bank in Arkansas where interest rates were capped by state law. ![]() |
home | site map |
© 2005 |