Do you have the right mortgage?

For most homeowners, having a mortgage is an important part of their financial lives.  Yet what is often overlooked is having the right type of mortgage for each individual’s financial needs.

When you go to the bank to renew your mortgage, you are often encouraged to extend the length of your mortgage, pay the least amount per month and take on credit lines – but are these the best options for the bank or the mortgage holder?

If you work with a mortgage broker, you will get someone on your side to help you choose the best mortgage for your personal situation as well as finding the best rates.

Types of Mortgages

Understanding the various types of mortgages is your first step to understanding what works best for you.

Conventional Mortgage
A conventional mortgage is a mortgage that is worth no more than 80% of the value of your home. To be able to get this type of mortgage, you need to pay down at least 20% of the value of the property, and usual amortization is 25 years.  This is the most traditional type of mortgage.

High Ratio Mortgage
If you don’t have 20% to put down on a home, this is the best option for you.  You can put down as little as 5% of the cost of the home, but you must qualify for the mortgage, as well as take out mortgage insurance.

Open Mortgage
An open mortgage allows you to pay off as much or as little of the mortgage as you want without a penalty.  While the interest rates on these mortgages are much higher, if you are close to paying off your mortgage, this may be your best option. If you are planning on selling your home soon, this is also a great idea, since it is often easier to set up a new mortgage on your new property.

Closed Mortgage
A closed mortgage does not allow you to make extra payments, and will charge you a penalty if you pay off your mortgage ahead of schedule.  While interest rates are lower, there is a lot less flexibility than an open mortgage.

Fixed Rate Mortgage
A fixed rate mortgage has the same level of interest throughout the term of the mortgage.  So if you are paying 3.5% on your mortgage, it will be that way throughout the 5 year term.

Variable Rate Mortgage
A variable rate mortgage follows the financial markets.  So if interest rates go down, so does the interest rate on your mortgage.   Usually monthly payments are the same, but if the interest rates go down, your principle payments increase.  This is a great product if the interest rates and financial markets are heading into a downward trend.

Assumed Mortgage
Sometimes you can purchase a home owner’s mortgage with the purchase of a home.  This saves money on the legal and appraisal fees, and if the interest rates are increasing, the original mortgage on the property could have a better rate attached.

Pre-approved Mortgage
A pre-approved mortgage is a mortgage agreement that is already approved before you start looking for a home.  This is an excellent product since it allows you to know how much money you qualify, and it helps you make offers more quickly without having to run to see how much money you can borrow.  A pre-approved mortgage is an excellent product if you live in a region where homes are bought and sold quickly.

Which mortgage is right for me?

There are many types of mortgages and knowing which one to apply for, which term to take (6 months – 10 years), monthly payments, weekly, bi-weekly, monthly payments and total amount of mortgage, can be challenging.

The first step is to get advice.  If you have a mortgage already, you may want to refinance to take advantage of lower interest rates, pay for renovations, pay tuition for your children, and take out money to start a business or prepare for retirement.

It is important to talk to a qualified mortgage broker with experience and knowledge of the various financial products available that fits your life.  Plus, if you have a mortgage broker, you have someone who will fight to get you the best interest rates, the best terms and the best type of mortgage to fit your life.

One Stop Mortgage makes mortgages simple

Even if you are midway through a mortgage, or you aren’t sure if you have the right type of mortgage for you, the friendly and experienced team of mortgage and home equity loan specialists at One Stop Mortgage can give you advice and set up the best mortgage for you. Since 1994 we have helped people get the best mortgages and home equity loans to fit their lives. Contact us today and find out how we can help!

A simple phone call to 1-877-874-8988 or 604-874-8988 or an email to sergio@onestopmortgage.ca can help you find the best mortgage product to fit your needs, reduce the interest payments and much more. Even if the bank turns you down, or your credit-rating is not accepted elsewhere, we can help.

1 877 874 8988 (toll free)
604 874 8988
604 874 9109 (fax)

Or simply fill out the contact form here