This is some information about mortgages and might answer some of your common questions. If you do not find an answer, I recommend you to contact your bank mortgage specialist for additional information.
Buying a Home is the Bigges Investment of your Life...
Your mortgage is likely the most important debt that you will take on in your lifetime. It is therefore important that you look for a mortgage with the most beneficial conditions, which will save you money, you can try a Bank or a Mortgage Broker.

Lenders
Mortgages are available from several types of lenders such as banks, mortgage companies, insurance companies, trust and loan companies, credit unions and caisses populaires. Different lenders may have different prices and conditions for similar products, so you should talk to several lenders to make sure you're getting the best product for your needs.

Mortgage brokers
You can also obtain a mortgage through a mortgage broker. Rather than lending money directly to you, brokers arrange transactions by finding a lender for you. Since brokers have access to a number of lenders, this may give you a wider range of loan products and terms to choose from. However, since mortgage brokers do not all have access to the same financial institutions, they may not be able to offer you the same kind of product. Consequently, you should consider contacting more than one broker, just as you should with banks and other financial institutions.(Check if your broker is licensed Brokers)

Some lending institutions may pay brokers' fees. If a broker cannot find you a product that is better than the one at your institution, you are free to shop elsewhere.

Conventional or high-ratio
A conventional mortgage is a loan for no more than 80% of the appraised value or purchase price of the property, whichever is less. The remaining amount required for a purchase (20%) comes from your resources and is referred to as the down payment. If you have to borrow more than 80% of the money you need, you'll be applying for what is called a high-ratio mortgage.

How a high-ratio mortgage works:
Any purchase where the down payment is less than 20% is considered a high-ratio mortgage, and the mortgage must be insured by the Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada (Genworth). 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 1.00% to 3.50% of the principal amount of your mortgage. This amount can be paid up front or added to the principal portion of your mortgage. A Mobile Mortgage Specialist can help you determine the exact amount.

Fixed rate or variable rate
When you take out a fixed-rate mortgage, your interest rate will not change throughout the entire term of your mortgage. As a result, you'll always know exactly how much your payments will be and how much of your mortgage will be paid off at the end of your term.

With a variable-rate mortgage, it may 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. If interest rates drop, more of your mortgage payment is applied to the principal balance owing. This can help you pay off your mortgage faster

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 10 years. Usually, the shorter the term, the lower the interest rate.

A short-term mortgage is usually for two years or 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 terms 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 interest rates

Open or Closed
Open mortgages can be paid off at any time without penalty and are usually negotiated for very short terms.2 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 maturity.

Closed mortgages are commitments for specific terms. If you want to pay off the mortgage balance, you will need to wait until the maturity date or pay a penalty.

Payment Options
Most financial institutions offer a number of payment options (monthly, semi-monthly, bi-weekly, accelerated bi-weekly, weekly, and accelerated weekly payments). Although these options may all seem the same, some payment methods such as accelerated weekly and bi-weekly payments can save you a lot in interest charges, compared with regular monthly payments.

Penalty Charges
If you are locked into a closed mortgage, you may want to break your current mortgage contract and negotiate a new mortgage at a lower rate. Some agreements do not allow for a mortgage to be renegotiated, but most do. Financial institutions will usually allow you to pre-pay your mortgage in full, but will add a penalty.

Contact a Mortgage Profesionalist for more details and information about the perfect mortgage for you.

TIPS ABOUT YOUR MORTGAGE
Shop around ** 2 or 3 lenders
Know your financial situation and how much you can qualify
Obtain the product that best suits your needs.
Read and make sure you understand the terms, conditions and penalties of your mortgage contract.
Do ask ALL questions to help you better understand your contract, do not be shy.

 
Mortgage Estimate Payments
NEED HELP? We can refer you to any professional for all your real estate needs. ( lender, Lawyer, Home Inspector, Builder, etc.)
We only recommend the best professionals to assist our clients, for a easy, fast and safe home buying process.

 

 
Chad Robinson
Mortgage Broker
Verico Best Interest Mortgages Inc
16 - 1420 Youville Dr. Ottawa, Ontario,
K1C 7B3
Office: 613-590-7100
Fax: 613-822-8169
Toll Free: 1-866-575-7100
web: E-mail:mortgages@bestinterest.ca
 
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