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Residential Mortgage Types

In today's mortgage market there are a variety of mortgage products offered by lenders. Some mortgage products may not be available to all applicants as lender guidelines and Canadian Government Mortgage Regulations will apply. When choosing a mortgage there are several conditions to take into consideration to protect your bottom line. These may include conditions such as whether the mortgage is portable to another property in case you decide to move, if the mortgage is a collateral charge against your title which may prevent you from switching lenders when your term is complete without having to pay legal fees again, how the prepayment penalty is calculated and other lender conditions that may be present. Fixed Rate Mortgages A Fixed Rate Mortgage is a mortgage with a set interest rate for the length of the term. Fixed rate terms vary in length and are most commonly terms of 1, 2, 3, 4, 5, 7, and 10 years. Variable Rate Mortgages A Variable Rate Mortgage is a mortgage with an interest rate that changes with the Lender's Prime Lending Rate. The Prime Lending Rate changes with the Target for the Overnight Rate which is set by the Bank of Canada. The Bank of Canada generally announces rate changes eight times per year at predetermined dates. Variable rates offered may be discounted or have a premium depending on the lender, the borrower's qualification and the property itself. Variable rate terms can be either Open or Closed Terms. With an Open Term the borrower will be able to pay off the mortgage without having to pay high prepayment penalties, however small fees may apply and the interest rate is generally higher than closed term variable mortgages. Closed Term Variable Rate Mortgages will generally but not always have a three months interest penalty if the borrower chooses to completely pay off the mortgage before the maturity date. Some lenders will also allow pre-payment options under the mortgage contract allowing you to make lump sum payments towards your principal during the term of the mortgage. With most variable rate mortgages the borrower may be allowed to lock-in to a fixed rate without paying a penalty. It is recommended that if you are considering locking in your variable rate that you do talk to an independent Mortgage Broker to find out your best options.  50/50 Mortgages A 50/50 Mortgage is a hybrid mortgage that is a half fixed rate and half variable rate closed term mortgage product. Home Equity Lines of Credit A Home Equity Line of Credit otherwise known as a HELOC is a secured line-of- credit against your home. You may have just a HELOC registered on your title or you may have a combination of mortgages and HELOCs registered.   HELOC's are a variable rate product and can be interest only payments. HELOC's are useful for home owners who want to have access to their equity for other purposes such as renovations, other investments or more. There are mortgage products that offer a mortgage and a HELOC product together and when you pay down the principal of the mortgage portion the available credit on the HELOC increases. To find out more about available Home Equity Lines of Credit call us today!  Cash Back Mortgages Cash Back Mortgages are mortgages where the lender advances a percentage or specified amount of cash at closing of the mortgage to the applicant. Cash Back Mortgages generally carry a higher interest rate and penalties if the mortgagor breaks the mortgage during the term. Construction or Draw Mortgages Construction Mortgages otherwise known as a Draw Mortgage or a Progress Advance Mortgage are mortgages that are used to construct a house on a property. The funds are advanced at various stages of construction to cover the steps in the building process. The process for Construction Mortgages is more complex than a standard mortgage and upfront preparation is required. Lenders generally require completed plans, estimates, copies of permits and more.  Mobile Home & Chattel Mortgages Mobile Homes, Modular Homes and Float Homes are considered Chattels as they are movable structures. Mobile homes are generally required to be tied-down or permanently affixed to a foundation. Mortgage financing for homes in park setting commonly have higher interest rates and tighter approval guidelines associated with the financing as they incur higher risk for the lender. If a Manufactured home is on its own land more opportunities exist for mortgage financing. For example if the mobile home is de-registered from the BC Mobile Home Registry then some lenders will treat the home like a regular constructed home. Second & Third Mortgages The first mortgage placed on the Land Title of a property is called a first mortgage. Any subsequent mortgages will be referred to by the order in which it is placed on the Land Title. The position of the mortgage on the Land Title adds strength to the mortgage, first position is more favourable. Due to the risk of having a Second or more charged on a Land Title the lender often charges a higher interest and fees to account for risk. Reverse Mortgages A reverse mortgage allows you to access equity in your home and instead of you paying a monthly payment you will receive a monthly payment from your available equity. There are many conditions associated with a reverse mortgage and we can help you determine if a reverse mortgage is your best option. Private Mortgages Sometimes a private mortgage is required by a borrower when they do not qualify for a mortgage from a financial institute. Private mortgages are generally more expensive and should be used as short term financing. An exit strategy should be discussed prior to accepting a private mortgage. Private mortgages almost always include extra costs such as a broker fee, lender fee, and lender legal fees.
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BUY MY FIRST HOME CONTACT A MORTGAGE BROKER APPLY  FOR A MORTGAGE
I WOULD LIKE TO:
LEARN ABOUT INTEREST RATES REFINANCE MY MORTGAGE Apply Tweet Me

Residential Mortgage Types

In today's mortgage market there are a variety of mortgage products offered by lenders. Some mortgage products may not be available to all applicants as lender guidelines and Canadian Government Mortgage Regulations will apply. When choosing a mortgage there are several conditions to take into consideration to protect your bottom line. These may include conditions such as whether the mortgage is portable to another property in case you decide to move, if the mortgage is a collateral charge against your title which may prevent you from switching lenders when your term is complete without having to pay legal fees again, how the prepayment penalty is calculated and other lender conditions that may be present. Fixed Rate Mortgages A Fixed Rate Mortgage is a mortgage with a set interest rate for the length of the term. Fixed rate terms vary in length and are most commonly terms of 1, 2, 3, 4, 5, 7, and 10 years. Variable Rate Mortgages A Variable Rate Mortgage is a mortgage with an interest rate that changes with the Lender's Prime Lending Rate. The Prime Lending Rate changes with the Target for the Overnight Rate which is set by the Bank of Canada. The Bank of Canada generally announces rate changes eight times per year at predetermined dates. Variable rates offered may be discounted or have a premium depending on the lender, the borrower's qualification and the property itself. Variable rate terms can be either Open or Closed Terms. With an Open Term the borrower will be able to pay off the mortgage without having to pay high prepayment penalties, however small fees may apply and the interest rate is generally higher than closed term variable mortgages. Closed Term Variable Rate Mortgages will generally but not always have a three months interest penalty if the borrower chooses to completely pay off the mortgage before the maturity date. Some lenders will also allow pre-payment options under the mortgage contract allowing you to make lump sum payments towards your principal during the term of the mortgage. With most variable rate mortgages the borrower may be allowed to lock-in to a fixed rate without paying a penalty. It is recommended that if you are considering locking in your variable rate that you do talk to an independent Mortgage Broker to find out your best options.  50/50 Mortgages A 50/50 Mortgage is a hybrid mortgage that is a half fixed rate and half variable rate closed term mortgage product. Home Equity Lines of Credit A Home Equity Line of Credit otherwise known as a HELOC is a secured line-of-credit against your home. You may have just a HELOC registered on your title or you may have a combination of mortgages and HELOCs registered.   HELOC's are a variable rate product and can be interest only payments. HELOC's are useful for home owners who want to have access to their equity for other purposes such as renovations, other investments or more. There are mortgage products that offer a mortgage and a HELOC product together and when you pay down the principal of the mortgage portion the available credit on the HELOC increases. To find out more about available Home Equity Lines of Credit call us today!  Cash Back Mortgages Cash Back Mortgages are mortgages where the lender advances a percentage or specified amount of cash at closing of the mortgage to the applicant. Cash Back Mortgages generally carry a higher interest rate and penalties if the mortgagor breaks the mortgage during the term. Construction or Draw Mortgages Construction Mortgages otherwise known as a Draw Mortgage or a Progress Advance Mortgage are mortgages that are used to construct a house on a property. The funds are advanced at various stages of construction to cover the steps in the building process. The process for Construction Mortgages is more complex than a standard mortgage and upfront preparation is required. Lenders generally require completed plans, estimates, copies of permits and more.  Mobile Home & Chattel Mortgages Mobile Homes, Modular Homes and Float Homes are considered Chattels as they are movable structures. Mobile homes are generally required to be tied- down or permanently affixed to a foundation. Mortgage financing for homes in park setting commonly have higher interest rates and tighter approval guidelines associated with the financing as they incur higher risk for the lender. If a Manufactured home is on its own land more opportunities exist for mortgage financing. For example if the mobile home is de-registered from the BC Mobile Home Registry then some lenders will treat the home like a regular constructed home. Second & Third Mortgages The first mortgage placed on the Land Title of a property is called a first mortgage. Any subsequent mortgages will be referred to by the order in which it is placed on the Land Title. The position of the mortgage on the Land Title adds strength to the mortgage, first position is more favourable. Due to the risk of having a Second or more charged on a Land Title the lender often charges a higher interest and fees to account for risk. Reverse Mortgages A reverse mortgage allows you to access equity in your home and instead of you paying a monthly payment you will receive a monthly payment from your available equity. There are many conditions associated with a reverse mortgage and we can help you determine if a reverse mortgage is your best option. Private Mortgages Sometimes a private mortgage is required by a borrower when they do not qualify for a mortgage from a financial institute. Private mortgages are generally more expensive and should be used as short term financing. An exit strategy should be discussed prior to accepting a private mortgage. Private mortgages almost always include extra costs such as a broker fee, lender fee, and lender legal fees.
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