Types of Mortgages
1. National Housing Act (NHA) mortgages are loans granted under the provisions of the National Housing Act of 1954.
Lenders are insured against loss by the Canada Mortgage and Housing Corporation. Borrowers must pay an applications fee to CMHC (which is usually added to the principal amount of the mortgage, although it may be paid in cash)
2. The coventional mortgage is a loan which does not exceed 75 per cent of the appraised value or purchase price of the property, whichever is the less of the two.
3. The high-ratio mortgage is a conventional mortgage loan which exceeds 75 per cent of the appraised value or purchase price of the property, whichever is the lesser of the two. These mortgages must, by law, be insured if placed with a bank or a trust company.
4. A collateral mortgage is a loan backed up by a promissory note and the security of a mortgage on real property. The money borrowed may be used for the purchase of the property itself or for other purposes, such as home improvements, a vacation, or a business investment.
Terms and Conditions of Mortgages
The First mortgage is the portion of the total debt registered against your property which is secured by first call on the property. In other words, if you default, the holder of the first mortgage has first call on the value of the property in order to revcover the loan.
The Second mortgage is the portion which comes second in line. The interest rate is usually higher to reflect this increased risk to the lender.
The Open mortgage is one which allows the borrower to repay the loan more quickly than agreed, either on anniversay dates or regular monthly payment dates, with or without pre-payment charges.
A Closed mortgage is one which does not allow the borrower to repay the loan more quickly than agreed. Payment must be made as specified in the agreement.
A fixed-rate mortgage is one where the rate of interest is set for a specific period of time (the term of the mortgage, which may be for as many as five years or as few as six months) The monthly payment of principal and interest remains the same throughout the term.
A variable-rate mortgage is one wherethe rate of interest changes from time to time as money market conditions change, but usually no more than once a month.
The leasehold mortgage is a mortgage on a home and / or improvements where the land is rented rather than owned. These mortgages must be amortized over a period that is shorter than the length of the land lease.
Do You Require an Appraisal?
Gary Featherstone Jr. our Market Value Appraiser accredited by Orea, has valued and market real estate in this area for over 21 years. Full knowledgable in market conditions and trends, using different approches to value.
Appraisials are preformed for may different reasons and purposes.
To discover the current or a subsequent date market value for self satisfaction, mortgages purposes, capital gaines, tax, property assessment appeals, Insurance claims and estates.
We preform these types of purposes for many clients, financial instutions and Solicitors at their request.
Don't be under sold!
