MORTGAGE BASICS

Are you feeling overwhelmed by the different choices available in the mortgage market today?  Or, do you need more information on the recent changes made by the Canadian Federal Government?  We are here to help.  As mortgage professionals we make it our business to stay up to date with all industry developments and programs that could affect our clients.  At any point in your mortgage term we would be happy to do a no obligation review to make sure that your mortgage is still working for you.   Here is an overview that should help you to choose the right mortgage product.  For Calgary mortgages / Canada mortgages.

FIXED RATE MORTGAGES 

The principle advantage of fixed rate mortgages is that the interest rate is set for the entire term of the mortgage. A fixed rate mortgage offers you the security of knowing exactly how much principle and interest you will be paying on your mortgage during the term you selected. If you think interest rates will rise, you may want to lock into a longer term fixed rate mortgage but if you think that the rates may fall, a shorter term may be the best choice for you.

Keep in mind that with a fixed rate mortgage you are locked in for the selected term, and that you may incur a penalty to break your mortgage.

If you are considering a fixed rate mortgage keep the following options in mind to help to reduce your mortgage faster.

Choose a lender who offers you the flexibility to:

• Change your payment schedule
• Increase your monthly payments
• Make lump sum payments at no additional charge
• Make bi-weekly payments

These options will help you to pay down your mortgage faster.

Most of the lenders we deal with, offer the above options, let us help you choose the best package for your needs.

VARIABLE RATE MORTGAGES

Depending on the level of risk you are willing to take, a variable rate mortgage can save you money while keeping your options open during times of fluctuating interest rates.

With variable rate mortgages your mortgage payment could increase or decrease depending on fluctuations in the Prime rate. With most variable rate products you can lock in at our discounted rate (not bank posted rates) anytime during your term.  Variable rate mortgages are recommended for the more savvy mortgagee or for those that have room in their monthly budget to handle an increase in the Prime lending rate.

CASH BACK MORTGAGES

With a cash back mortgage the lenders are basically lending you money up front.  They charge a higher interest rate and will require that you pay it back if you payout the mortgage early.  The cash can be used for purposes other than down payment.

These mortgages can come in handy for those who are having difficulty saving the required 5% for a down payment.  The criteria for cash back mortgages is very strick, you must have good credit and job stability to qualify.  They will also require that you have additional funds on hand for closing costs usually 1.5% of the purchase price.

EQUITY MORTGAGES

A mortgage based on the amount of equity in your home. Usually up to 75% (in some cases only 65%) of the value of your property and most suited for those people who do not qualify for a traditional bank mortgage for credit or income verification reasons. 

If you have good credit you will typically qualify for a fully discounted interest rate.  If you have some credit issues the lender will charge you a higher interest rate to mitigate the risk.

Please contact us for further details on our mortgage products.