Types of mortgages
Most of us what to have a house of their own. To be free and be able to do anything that we please in our private space. But most of the people find it difficult to pay so much money in one transaction. That is why the loan mortgage was invented. And there are many types of mortgages available today. Mortgages became the preferred choice of most of Canadians because through a loan mortgage company your needs are represented correctly and efficiently. In addition, with the help of a home loan mortgage company you have easy access to the funds you require to fulfill your dream.
With Rampone-Marsh Mortgages, one of the best loan home mortgage advisors in Kelowna, you will receive the best rate of solutions for your needs in the form of high-quality service. With the help of our advisors, you can find out what type of mortgage suits you best and many more. With us, you will find the best mortgage deals in Canada.
But what types of mortgages are there?
There are many home mortgages you can opt for. You can take a First, Second or even Third Mortgage on a property. If you want to buy a second home or a vacation property you can opt for a Second Home Mortgage or a Cottage Mortgage. You can also build your home with the help of a Construction Mortgage. More and more Canadians are now choosing to build their own custom homes with features designed to suit their lifestyles. If there is anything that you want to do, build, renovate or repair, you can be sure there is a type of mortgage that will cover that expense.
But in general, the Mortgages are divided into two big types: Loans with Fixed Mortgage Rates and Variable Mortgage Rates.
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Fixed Mortgages Rates
Also known as Set Mortgage Rates, they are based on the lender’s offered interest rate that will result in a consistent payment for the duration of your loan term.
The big advantage this type of mortgage has is that even if the rates rise or fall, your payment will remain the same. This is a big advantage, as you can allocate the monthly budget accordingly.
On the other hand, you can not take advantage of the lower rates that result from the drop in the interest rates, unless you break your term contract. By breaking this contract, you will have to pay a high penalty. In general this penalty is based on the amount you have to pay for the rest of the contracted term or three months interest, whichever sum is higher.
Variable Mortgage Rates
As opposed to fixed mortgage rates, the fluctuating mortgage rates rise and fall alongside the interest rate of Bank of Canada (Prime Rate). Most of the times, the variable rate is either prime rate + X% or prime rate – X%.
The biggest advantage of the Variable Mortgage Rates is that by examining history, they have proven to be less expensive over time than the Fixed Mortgage Rates. In addition, by breaking the term contract, the penalty is usually based on three months of interest.
The downside is that variable rates are a risky approach. It is not so easy to qualify for this type of mortgage. If the Bank of Canada raises the prime rate, then so does your mortgage payment.
Contact Rampone-Marsh Mortgages for more information about types of loans. Feel free to ask us as many questions as you need to understand your options, and discover best mortgage loan for you and your family.