MENU		MORTGAGES		FREE SEMINARS
		Mortgage payments are made up of a principal sum (the amount borrowed) and interest (the costs to you of borrowing money). The best plan for any type of mortgage is to minimize the amount of interest you pay. Lenders offer several ways to help do this:   A larger down payment means your home ultimately costs less because a smaller mortgage means less interest. A shorter amortization, the period over which a loan is repaid. A weekly or bi-weekly payment schedule, instead of monthly. Additional lump sum payments.		FIRST-TIME HOME BUYERS SEMINAR If you are thinking about buying your first home, you will want to read our FREE First-Time Home Buyers Online Seminar. Get all the information you need to make you a knowledgeable buyer from the comfort of your own home.
		TYPES OF MORTGAGES AND MORTGAGE OPTIONS
		Do not be daunted by the many concepts and terms regarding mortgages. Arranging one is not that difficult. The basics are fairly simple and we are more than willing to help. Nonetheless, you will want to at least familiarize yourself with the mortgage process, how to arrange one and the different financing strategies involved. First you will need to know the different kinds of mortgages that are offered. The most common by far is the 'conventional mortgage'. This mortgage is for an amount which does not exceed 75% of either the appraised value of the property or the purchase price, whichever is lower. Your downpayment is a minimum 25% of the purchase price. A 'high-ratio mortgage' is one alternative if you do not have the 25 per cent downpayment. These are available for up to 95 per cent of the appraised value or purchase price of the property (whichever is lower) to a maximum set by government regulation. The proviso is that high-ratio mortgages must be insured, and the cost, from one to three percent of the mortgage amount, falls to you. This premium can be added to your mortgage payments or paid in full on closing. Interest is the cost of borrowing money and is paid to the lender. Mortgage interest rates are affected by the prevailing market interest rates. Mortgage rates are either fixed or variable. A fixed rate is locked in so that it will not rise for the term of the mortgage. A variable rate will fluctuate and can be a good choice if rates are high when you arrange your mortgage and then fall afterward. The term of a mortgage is the length of time that certain factors, such as the interest rate you pay, are set at a negotiated level. Terms usually last anywhere from six months to 10 years. At the end of the term you either pay off your mortgage or renew it, possibly re-negotiating its terms and conditions. Generally, the longer the term, the higher the interest rate. Note that the term is NOT the amortization period. The amortization is the amount of time over which the entire debt will be repaid. Most mortgages are amortized over 15-, 20- or 25-year periods. The longer the amortization, the lower your scheduled mortgage payments, but the more interest you pay in the long run. A mortgage is repaid in regular payments, either monthly, bi-weekly or weekly. The more frequent payment schedules can save you money by increasing the amount paid toward the total mortgage each year. An 'open mortgage' means that you can repay the loan, in part or in full, at any time without penalty. Interest rates are usually higher on this type of loan. An open mortgage can be a good choice if you plan to sell your home in the near future. A 'closed mortgage' keeps payment unchanged for the duration of the loan period, and usually offers the lowest interest rate available. However, closed mortgages are not flexible and there are often penalties or restrictive conditions if it is to be discharged before its maturity.
		MORTGAGE INSURANCE PREMIUM
		CMHC’s Mortgage Loan Insurance is an insurance that covers your lender’s risks associated with financial loss that can occur when a homeowner defaults on their mortgage loan and in turn increases your access to mortgage financing and at the most competitive interest rates possible. As with any insurance, there are insurance premiums to be paid. The amount of the premium varies and can range between 0.65% and 2.75% depending upon how much of the purchase price/home value is financed with a mortgage loan. Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.

CONTACT INFORMATION
		Rick McGuigan Toronto real estate sales representative Coldwell Banker Case Realty Phone: 416-696-5100 Pager: 416-461-0925
HOME  -  WELCOME  -  BUYING  -  SELLING  -  LEASING  -  FINANCING  -  MOVING  -  RELOCATING  -  TORONTO LOFTS  -  QUICK TOURS  -   FEATURED LISTINGS  -  MLS LISTINGS  -  FREE HOME SEARCH  -  FIRST TIME HOME BUYERS  -  HOME BUYERS SEMINAR  - HOME SELLERS SEMINAR  -   FREE CMA SERVICE  -  TORONTO INFO  -  USEFUL LINKS  -  HOME IMPROVEMENT  -  RESOURCES  -  FAQ  -  GLOSSARY  -  NEWSLETTER INTERNATIONAL REAL ESTATE DIRECTORY  -  CONTACT  -  SITE INDEX  -  WEB AWARDS