 |
What is Mortgage | |
Types of Mortgages | |
Pre-Approved Mortgages | |
Mortgage Features |
Conventional Mortgage
With a conventional mortgage the purchaser has to have saved at least 25% of the purchase price as a down payment. You can borrow up to 75% of the purchase price or the appraised value of the property, whichever is less. If a mortgage exceeds 75% of the value of the property it must be insured, thus becoming a high-ratio mortgage.
High Ratio Mortgage
If your down payment is less than 25%, then you qualify for
a high-ratio mortgage. These mortgages are often referred to as NHA mortgages
because they are granted under the provisions of the National Housing Act.
You can borrow up to 95% of either the purchase price or the appraised value
of the property (whichever is less) but are required by law to insure the
mortgage and pay a one-time insurance premium based on the total value of
the mortgage.
Mortgage loan insurance premiums range from 1.25% to 3.75%, depending upon
the size of the down payment.
| Up to 75% Mortgage | No insurance is required |
| 75.1 to 80% Mortgage | Premium is 1.25% |
| 80.1 to 85% Mortgage | Premium is 2.00% |
| 85.1 to 90% Mortgage | Premium is 2.5% |
| 90.1 to 95% Mortgage | Premium is 3.75% |
Second Mortgage
If you cannot add on to your mortgage, you may consider a second mortgage. Each mortgage uses your home as security and gives the mortgagee the right to take your home if you default on your loan. Second mortgages usually come with a higher interest rate, as the first mortgage gets paid first in case you default on your loan.
Pre-Approved Mortgage
Why go house hunting only to find later that you don't qualify for a mortgage. Having a pre-approved mortgage will give you the confidence of knowing exactly how much can afford for a home.
We'll arrange for you the most competitive rates - if rates go higher, your rate will not be affected, and if rates go lower, you get the lower rate.
