A mortgage is a secured loan that uses a property as security against the loan. The property acts as an asset that can be sold to repay the loan, if you should default on your payments. Because it is a secured loan, a mortgage will usually enjoy much lower interest rates than other types of loans.
The mortgage lender can be a bank, credit union or other type of financial institution. Some lenders can be approached directly, such as banks, but many homebuyers are choosing to use mortgage brokers to shop among the dozens of Canadian lenders to get the very best mortgage interest rate.
The initial amount of the loan is referred to as the principal, and it is this amount, plus interest, that must be repaid. The length of the repayment term is known as the amortization; this will typically run anywhere from 15 to 35 years, but can be much shorter if desired. A longer amortization translates to a lower minimum mortgage payment, however this repayment term can be further shortened via prepayment options such as; biweekly payments, yearly lump sum payments, double down payments.
Thanks to this low interest, a mortgage can be used to finance more than just the purchase of a property; it can also be used to build a new property, to consolidate debts, renovate a home, or purchase other types of investments. Your mortgage specialist can discuss all the available options with you to help you meet your goals. Call Now 1-866-RATE-708 or fill out a fast mortgage application.
- Terms and amortization
- Types of mortgages
- Understanding interest rates
- Payment options
- Pre-qualification and pre-quantification
- Mortgage insurance
- Renegotiating an existing mortgage
- Paying your mortgage off early
- Fixed and variable interest