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High Ratio Mortgages Help You Get The Home You Want

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					Presented by Daniel Toriola
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High Ratio Mortgages Help You Get The Home You Want By Crystal Mate

High ratio mortgages. The term conjures up frightening images of high risk loans and unbearable levels of debt. In reality, high ratio mortgages are pretty common these days. And with the price of housing, it is no wonder. Housing Costs and Down Payments High ratio mortgages are those that require homebuyers to borrow more than 80% of the money they need to pay for their home. This means that to avoid a high-ratio mortgage, you need a down payment of more than 20% of the purchase price. A quick look at the current Canadian housing market will demonstrate just how difficult it is to save for that down payment, especially for first-time buyers. If you live in a major city, you could spend anywhere between $242,000 (Montreal) and $566,000 (Vancouver) for a new home. A 20% down payment for a nice piece of Montreal real estate would set you back about $48,000. In Vancouver, you’d be looking at a down payment of just over $113,000. For that amount you could practically buy a house outright in Fredericton! Given these costs, it’s no surprise that high ratio mortgages make up nearly half of the mortgages in Canada. Mortgage Insurance In Canada, homebuyers are required, by law, to purchase mortgage insurance when they have a down payment of less than 20% of the property’s selling price. CMHC and Genworth are the most commonly known mortgage insurers in this country. If you are buying your home with less than 20% down, you must remember to factor in the costs of mortgage insurance. The cost calculations for mortgage insurance are pretty straightforward. The fee is a percentage of your loan, based on the size of your down payment. The bottom line? The more you
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borrow, the more you pay. For example, with CMHC, if you only require financing for 65% of the home’s cost, you will pay .5% of the loan amount. But if you require 95% financing, you will pay 2% of the loan amount in insurance fees. Because they are insured, high ratio mortgages are usually subject to the same terms as conventional mortgages, so you can shop around for the best rates and terms. Be sure to ask your lender or mortgage broker about prepayment options too. If you want to increase your monthly payment or make a lump sum payment, you want to be able to do so without an extra penalty being charged. What You Can Do With High Ratio Mortgages Insured high ratio mortgages have helped many first-time home buyers get into the real estate market. By reducing the down payment required for a new home purchase, home ownership has become a reality for people unable to save tens of thousands of dollars in advance of their purchase. High ratio loans have also helped people looking for mortgage refinancing. Many financial institutions and lenders will fund 90% or more of the property’s value, allowing homeowners to borrow against the equity in their home for renovations and major life expenses. To learn more about high ratio mortgages, contact a mortgage professional today. For more information on http://www.canadianmortgagesinc.ca/2nd_mortgages/high_ratio_mortgages.html high ratio mortgages or http://www.canadianmortgagesinc.ca/2nd_mortgages/mortgage_refinancing_for_self_employed.html mortgage refinancing contact CanadianMortgagesInc.ca

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What Are High Ratio Mortgages and How Does it Work? By Mary Anne Murphy

Are you looking to buy a home? If you are than you need to know about high rate mortgages. This is how most people will have to buy their home because most people don’t have the money needed for a down payment that will let them get the lower rates. Do you know what the definition of a high ratio mortgage is? High ratio mortgages are when you get a loan that covers more than 80% of the value of the property you have mortgaged, in other words the loan value to the home value ratio is higher. When you buy your home, the ideal situation for loans, and for banks, is for you to put down a 25% down payment. However, most people are not able to do this because the cost of homes has gone up considerably from the past. So, if you are not able to put down 25 percent you can still buy your home with the high ratio mortgages. With this type of high mortgage loan you will be able to put a down payment of 5 percent on the purchase price or in some cases even zero percent down. This will allow you to buy the home you want without you having to break the bank and put yourself into huge debt to come up with the 25 percent. So how do the high ratio mortgages work? When you get a conventional mortgage the lender will insure the loan themselves because this means less risk for them. Lenders will want to make sure that if you default on your mortgage and the bank needs to force the sale of your home, that there will be enough equity in the property for the bank to get their money back. With the high rate mortgage loans you will have to get default insurance through a third party. The insurance is the key to the high ratio mortgage loans. If you don’t have it then you won’t be able to find any major lenders that will let you put a down payment of less than 25 percent. The reason for this is because the insurance will protect the lender’s interests. Mortgage insurance companies will cover any deficit for the lender if there is not enough equity in your home if you default on the mortgage. The purchase of mortgage insurance will add to the cost of buying a home but instead of paying for this upfront, most lenders will work the cost of your mortgage insurance into the mortgage payments. It is a good idea to speak to your mortgage broker for all of the details. Now that you know how it works you need to know who can qualify for a high mortgage loan. The answer is that anyone that is qualified to buy a home can qualify for the high ratio mortgages. Obviously, there will be other factors that are included to determine if you qualify but this is something you will have to figure out with a mortgage lender. Some of the things that will be taken into consideration are how much you make, home much debt you have and so on. So, if you want to buy a home and you need to do the high ratio mortgages than you will want to talk to a lender to find out what you need to do. Buying a home with high mortgage loans is definitely the way to go if you can’t put down the 25 percent down payment. So get started today, learn more information about these mortgages and talk to a lender. Mary Anne Murphy is a real estate expert who can assist in your search for Oshawa homes for sale and information about the Pickering Real Estate market for both buyers and sellers. Mary Anne will be

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