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What Is A Purchase Mortgage?
In the simplest terms, this is a loan to purchase a property. The amount of your mortgage is determined by the purchase price of the property, minus your down payment. According to Investopedia a home mortgage is a loan given by a bank, mortgage company or other financial institution for the purchase of a primary or investment residence.
How Much Should My Down Payment Be for a Purchase loan?
Typically a down payment should be at least 20% of the purchase price of the home.
What If My Down Payment Is Less Than 20% Of The Home Purchase Price?
You will need to purchase mortgage insurance. Mortgage insurance comes from three different companies
- CMHC – the largest one and 100% backed by the Government of Canada.
- Sagen – 95% backed by the Government of Canada.
- Canada Guarantee – 95% backed by the Government of Canada.
What Is Mortgage Insurance?
Mortgage insurance is designed to protect the lender in case you default on your mortgage payments. However, mortgage insurance can mean lower interest rates, as it means less risk to the lender.
What Is The Interest Rate Of A Mortgage?
There are two types of rates for a purchase mortgage:
- Fixed-rate – remains the same for the entire term of the mortgage.
- You may pay a higher rate than variable
- Often have higher penalties
- Variable-rate – variable rates adjust with prime
Priced lower than a fixed rate
- Tend to perform better than fixed in the longer term
- Lower penalties
We are always there to help you make the right decisions for your purchase mortgage.
For the last 15 years, We have been providing the communities of Ontario with flexible, trustworthy business and residential mortgages to make home and commercial facility accessible.
We will assist you in comprehending your financing possibilities and locating an affordable mortgage. We will walk you through the procedure and make it as simple and straightforward as possible.
This is a term used to describe the amount of time it will take you to pay off your mortgage. Insured mortgages have a maximum amortization of 25 years, and uninsured mortgages have a maximum amortization of 30 years. The longer the amortization, the smaller your payments.
The mortgage term is how long you are guaranteed a rate(fixed rate) or a discount (variable rate).
The first step to qualifying for a mortgage and purchasing your dream home is to get pre-approved. Lenders will evaluate you on three aspects
- Your credit
- Amount of down payment
- Income
Work with our mortgage agents to get you the mortgage that is right for you!
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