Before you can find the best mortgage lender for you, you first need to have some idea of what you’re doing. We have tried to assist with your understanding by outlining the different types of mortgages that you can choose from in Canada. Whether you are a first-time homeowner or have a little experience in this area, this research can be of great assistance as you move closer to finding the best lender for you.
Here are explanations of the most common types of mortgages in Canada:
A conventional mortgage is as it says, the conventional option. This is the type of mortgage that is pretty standard in Canada. And this option is available to you if you can afford a 20% down payment from the get-go.
When it comes to this type of mortgage, homeowners’ insurance may be a requirement. This may depend on your broker but just like the name of this type of mortgage, this is the industry standard.
With this kind of mortgage, you can pay off the balance at a speed that is comfortable with you with no upward limitations or penalties. With these kinds of mortgages, the interest rates tend to range a little higher than that norm. An open mortgage is recommended if you are looking to borrow for a short period of time.
A closed mortgage is the type of mortgage that comes with a fixed rate. This fixed rate is attached to the loan for the duration of its repayment. We would like to inform you though, that in most cases, the rate given is lower than what comes with open mortgages.
The best way to explain this type of mortgage is to place you in an instance where you are considering taking a variable mortgage. As the prime rate fluctuates, your variable rate mortgage will increase or decrease in accordance to this rate.
If you were to choose a reverse mortgage, you would receive cash value for the equity that is within your home while you are still residing within it. The rule in Canada is that you need to be around the age of 60 in order to qualify – making this an attractive option for seniors that need a little extra funding for their retirement years.
Now that you have a fundamental understanding of the different types of mortgages in Canada, it’s time to start searching for the best mortgage lenders around. To start with, Nowik Mortgage is made up of a team of professionals in Nanaimo BC and we’d like to throw our hat in the ring for the best mortgage lenders in town. To find out more about us and why we are the mortgage solution for you, send us an email today.