Fredericton Office

Phone: 506.452.9888

Ormocto Office

Phone: 506.357.9888

Woodstock Office

Phone: 506.325.9057

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Serving Your Real Estate Needs In:    FREDERICTON

Real Estate in Fredericton

283 St. Marys Street
Fredericton, NB
E3A 2S5

Email
Phone: 506.452.9888
Fax: 506.452.1590
· OROMOCTO

Real Estate in Oromocto

3 Gateway Mall
Oromocto, NB
E2V 4R3

Email
Phone: 506.357.9888
· WOODSTOCK

Real Estate in Woodstock

626 Main Street
Woodstock, NB
E7M 2C5

Email
Phone: 506.325.9057
Fax: 506.325.9359

Mortgage Types

Conventional and High Ratio Mortgages

To qualify for a conventional mortgage, you simply have to have a 25% down payment of the purchase price, with the mortgage exceeding 75% of the appraised value.

If your down payment is less that 25%, then you qualify for a high-ratio mortgage.  This type of mortgage requires loan insurance, which can cost an additional 0.5% to 3.75% of the mortgage amount.  With this type of mortgage you could also be limited to a maximum house price.

Second Mortgage

Of course, if you cannot add on to your mortgage, you may consider a second mortgage.  Each mortgage uses your home as security and gives the mortgage the right take your home if you default on your loan.  The first mortgage gets paid first in cases of default on your loan.  The first mortgage gets paid first in cases of default and has the best chance of recovering all of its money.  So it only goes to figure that subsequent mortgages usually come with a higher interest rate.

Mortgage Features

Here are some mortgage options you should know about:

Every lending institution is different, and each will have their own customizable mortgage options.  When you’re hunting for a lender and a home, see how the following features could be beneficial to you.
Prepayment

This is a wonderful option if you receive regular bonuses or if your income fluctuates throughout the year.  With a prepayment privilege, you have the right to make payments toward the principal portion of your mortgage over and above the monthly payments.  A mortgage with a pre-payment option is closed.  An open mortgage means you can pay the entire principal sum without notice of bonus.

Portability

If you still have time remaining on that fantastic loan you negotiated, portability is on option you’ll want to discuss with your lender.  Quite simply, it means transferring the balance of your current mortgage at the existing rates and with the existing terms and conditions, to your new home.

Assumability

Let’s say that the vendor has negotiated a dynamite mortgage.  With an assumable mortgage you, the purchases, simply assume the obligations of the mortgage.  This is a wonderful feature especially if the terms are more favourable than the existing market conditions would allow.  Remember, when it is time for you to sell, you may still be liable for any mortgage you allow the buyer to assume.  This means if the buyer stops making payments, you could be accountable for the payments.  By sure to have the subsequent buyer approved for the assumption of the payments, thereby avoiding this potential land mine.

Expandability

If you need additional finds down the road, will your mortgage terms allow you to increase the principal amount?  Usually, your new rate will be a blended amount of the initial mortgage rate and the prevailing rates.  It’s a great option to discuss with your lender if you foresee large expenses in your future like renovation or education costs.