Toronto Mortgage Broker – Good Bruised and Bad Credit Approvals

First and Second Mortgages
Debt Consolidation Mortgages
Bad Credit Mortgages
Private Mortgages

Toronto GTA (416) 912-6200

Simcoe Muskoka (705) 717-5598

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What is a mortgage?

In simple terms, a mortgage is a loan secured against property and registered on the title of that property.

What is the term of a mortgage?

The term of a mortgage is the period of time a mortgage agreement is in effect. Terms range anywhere from 6 months to 10 years with 3 to 5 years being most common with “A” lenders and banks. With “B” lenders and private lenders, the term is generally shorter and in the range of 6 months to 2 years.

What is amortization?

A mortgage is amortized over a period of years required to pay the mortgage off completely. A common amortization period is 25 years but can be as little as 5 years to 35 years. The length of the amortization can be adjusted to increase or lower mortgage payments but has nothing to do with the term.

How many years can the mortgage amortization be?

mortgage amortizations can be up to 35 years providing the mortgage does not need to be insured by CMHC or Genworth. If the mortgage has less than a 20% downpayment it will need to be insured and the maximum amortization is 25 years.

Can you change your amortization period?

The amortization can be changed at the end of the term or if the term is broken to refinance. The mortgage amortization can only be shortened if you qualify, and extended back to the original if insured.

Is a 30 or 35 year mortgage a bad idea?

The longer the amortization, the more interest you will pay. Whether that is a good or bad idea depends on your personal situation before buying. If you can afford, and qualify for a shorter term, that will definitely save you money in interest.

What is CMHC Insurance?

This is actually mortgage default insurance provided by either CMHC (Canada Mortgage and Housing Corporation), Genworth Financial Canada or Canada Guaranty. This type of insurance is commonly referred to as CMHC insurance even issued by one of the other providers.

How does mortgage default insurance work?

Even though mortgage default insurance is paid for by the borrower in most cases, it is in place to protect the lender against losses in the event of default. If a borrower defaults on a mortgage and loses their house due to foreclosure, they will not be able to claim any losses. This is a common misconception about mortgage default insurance.

Is it better to get a fixed or variable rate mortgage?

It depends on whether you need or want a fixed payment or not. A variable rate mortgage will generally have a better rate than fixed but the rate can change during the mortgage term. The most common mortgage is a five year fixed for those on a strict budget. Quite often 5 year fixed mortgages offer such a good rate it is just not worth gambling on a variable rate term.

What is a fixed-rate mortgage?

A fixed-rate mortgage means the interest rate is set and stays the same for the term of the mortgage. If market interest rates go up or down your interest rate will not be affected.

What is a variable rate mortgage?

Variable-rate mortgages do not have a fixed rate for the term of the mortgage. If interest rates change so will your payment. Variable rates are generally less than fixed as the lender is not taking such a gamble on long term rates. Some lenders will keep your payments the same if you wish in event of rates rising, but the additional interest costs will be added to your mortgage principal.

Are mortgage interest rates going to go up or down in 2020?

Honestly, nobody knows and predictions are nothing more than a guess. Since the housing market hasn’t changed much since 2019 it would seem likely that rates will remain similar to last year.

 

 

Michael Curry – The Mortgage Wellness Group Ltd.

Toronto GTA
416-912-6200
3230 Yonge Street
Toronto, ON
M4N 3P6

Simcoe Muskoka
705-717-5598
546-770 4th. Avenue
Port McNicoll, On.
L0K 1R0

Head Office – Barrie
35 Worsley Street
Barrie , On.
L4M 1L7
Mortgage Brokerage 11970
Main 705-730-1050

By Appointment Only