Plain And Simple Mortgage Information

Mortgage information can be daunting, to say the least. With a variety of options out there, it can be hard to analyze which is the best for your individual financial situation. Here’s an overview of some of the mortgage products on the market today!

 

Conventional Mortgage

The name kind of gives it away. This mortgage is a typical product that is offered to home buyers that have a down payment of 20% or more of the total purchase price. You typically wouldn’t need to get mortgage insurance with this product, however, some financial institutions may require it. Ask your advisor for your specific requirements.

 

Closed Mortgages

Closed mortgages are traditionally based on a specific term. For example, if you had a 5-year fixed rate mortgage, you wouldn’t be able to pay more than your allotted mortgage payment. Once you’ve hit the maturity mark, you can then renegotiate the terms with your financial institution

 

Open Mortgages

I’m sure you’ve guessed it, the open mortgage is the opposite of a closed mortgage. You can make additional payments or pay it off in its entirety with no penalty. Just a small word of caution to explore your options before committing to an open mortgage – while it may seem appealing, you may pay a higher rate than that of its closed counterpart.

 

Variable Rate Mortgages

This mortgage option speaks for itself. With this type of mortgage product, your interest rate can fluctuate during your term. Throughout the term, you will have set periods where your rate will be revisited, and it can go up or down depending on the interest rates at that time interval.

 

High Ratio Mortgages

If you do not have 20% to put down, you will fall into the high ratio mortgage category. This simply means that you will have to purchase insurance alongside your mortgage product.

 

Mortgages are a big investment and we absolutely recommend shopping around to explore the different lending options available to you.