When taking out a mortgage, it is important for you to know the different options available so that you can make the best decision for yourself and your family and manage your home finance. Let’s break down each of the mortgage options.
A conventional mortgage is available to individuals who have at least 20% of the price of the home or building available to make as a downpayment. Depending on which lender you want to use, you may need to have home insurance as well.
Variable Rate Mortgages
Variable mortgage rates will include interest and principal, but payments will stay the same throughout the duration of the mortgage. Mortgage rates will fluctuate with the market rates.
An open mortgage allows you to pay back your mortgage in part or in full at any time without being penalized. These often have term lengths of six months to a year.
Conversely, a closed mortgage allows you to have a fixed interest rate over the length of the loan. This is a very stable choice and will have lower interest rates than an open mortgage.
When you opt for a reverse mortgage, it allows you to transfer the value of your home into cash that is available to you. This is an option even if you do not want to sell or leave your home, but you need to be at least 62 years of age to qualify. The older the homeowner, the more money will be able to be borrowed.
Lastly, a convertible mortgage has a term of six months up to one year with a fixed interest rate. You have the option of extending this term or continuing more short-term with a flexible interest rate.
Are you ready to take out a mortgage on your home? It’s time to contact The Nowik Mortgage Team ‒ your mortgage professionals in Nanaimo, BC. We’ll help you with your home finance and get the mortgage that fits your goals and lifestyle. Contact us today for a consultation.