Understanding Home Mortgages
A home mortgage is a secured loan. When you get the home loan, you pledge a property (the house you're buying) to the lender to back up your promise to repay the debt. Unlike home mortgages , personal loans are generally backed up only by the borrower's signature and past credit history, and carry a higher interest rate. Since real estate tends to hold its value better than other forms of property (such as a car or a boat), a home is a valuable security for a mortgage lender offering a home mortgage. That is why the lender is willing to lend you a large amount of money at a relatively low interest rate.

• Lenders usually expect you to make a downpayment of between 10 and 20 percent of the house's price and to pay closing costs, often three to six percent of the home mortgage amount.

• There are two major types of home mortgage loans -- those with fixed interest rates and monthly payments and those with changing rates and payments. However, there are many variations of these plans on the market, and you should shop carefully for the home mortgage that best suits your needs.

If you are thinking about buying a house, especially your first one, you may have some basic questions about the home-financing process. This site provides a basic understanding of the key issues involved with home mortgages


How big a mortgage loan?
In deciding what size of mortgage loan to get, a general rule is that you usually can qualify for a mortgage loan of two to two and one-half times your household's income. For example, if your family has an income of $30,000 a year, you can usually qualify for a mortgage loan of $60,000 to $75,000.

The standard mortgage loan covers 80% of the cost of the home. However, you can get mortgage loans for as much as 97.5% of cost. You may want a larger mortgage loan because you may not have enough cash. And even if you do have the cash, you don't want to tie it up in your home equity, since you won't be able to get it out if you need the money in a hurry. Also, if you're buying a home as an investment, a larger mortgage loan gives you more leverage. Your profits from appreciation will be a higher percentage of your home equity. On the other hand, a larger mortgage loan will require higher monthly payments, and if your income declines, you may have difficulty meeting the payments of your mortgage loan.

Self Employed? Mortgage companies often ask for the following types of documents from self-employed people:
• Personal income tax returns for the past two years
• Business income tax returns (if you are incorporated) for the past two years
• A current balance sheet
• A current profit and loss statement
• A business credit report fee
• A personal credit report fee


Finding A Mortgage
Mortgage packages vary widely, and it is important to investigate several options to find the best mortgage for you. If, for example, you are using a real estate agent or broker to shop for a home, you may want to consider their suggestions about mortgage lenders and mortgage packages. Check real estate or business newspaper sections, which may include brief tables on mortgage availability. Look in the Yellow Pages under "Mortgages " for a list of mortgage lenders in your area. Call several mortgage lenders for rates and terms on the type of mortgage you want. In addition, consider trying a commercial "computerized mortgage shopping service," although such a list may reflect only a selection of mortgage lenders and you may be charged a fee.

Compare the mortgages offered by several mortgage lenders when you apply for a mortgage loan. Most mortgage lenders require you to pay a fee when you file your loan application. The amount of this fee varies, but it can be $100 to $300. Some mortgage lenders do not refund this fee if you are not approved for the loan, or if you decide not to accept the mortgage loan terms offered. Before you apply, ask the mortgage lender whether they charge an application fee, how much it is, and under what circumstances and to what extent it is refundable.


Mortgage rates
There are two major types of mortgage loans -- those with fixed interest mortgage rates and monthly payments and those with changing mortgage rates and payments. However, there are many variations of these plans on the market, and you should shop carefully for the mortgage that best suits your needs.

Common fixed-rate mortgages include 30-year, 15-year, and bi-weekly mortgages. The 30-year mortgage usually offers the best mortgage rates and the lowest monthly payments of fixed-rate mortgage, with a fixed monthly payment schedule.

Given a particular mortgage rate, the 15-year fixed-rate mortgage enables you to own your home in half the time and for less than half the total interest costs of a 30-year loan. These home loans, however, often require higher monthly payments because you are paying back the mortgage in half the time, even at the same mortgage rates.

The bi-weekly mortgage shortens the loan term from 30 years to 18 to 19 years by requiring a mortgage payment for half the monthly amount every two weeks. While you pay about 8 percent more a year towards the loan's principal than you would with the 30-year, one-payment-per-month loan, you pay substantially less interest over the life of the mortgage. Keep in mind, however, that with shorter-term loans, you trade lower total costs for smaller mortgage interest deductions on your income tax.

Mortgage for Self-employed
These programs award the self-employed by allowing alternative documentation to qualify for the mortgage; no tax assessments or pay stubs. Our self-employed clients have taken full advantage of this program to complete their mortgage transaction and have praised the lenders for this long awaited alternative.
• This mortgage applies to all business owners, contractors, consultants and commission sales people.
• We will structure a mortgage to fit almost any income and credit situation.
• With a clean credit history you can finance up to 90% of your property value.

Variable Rate Mortgages
There has never been a better time to take advantage of the variable rate mortgage. With prime at a near-all-time low, this is one of the most effective mortgage products on the market!
These numbers and terms sound great so far, but what if prime goes up? This brings up another great option, at any time without penalty you can convert into a closed mortgage 3 years or greater. When you decide to convert you automatically get mortgage broker wholesale rates not bank posted! You don't have to haggle with a branch manager; with us you get the best rate in Canada!
Prepayment options are important to most mortgage holders. This gives you the ability to pay down your principal mortgage amount over and above your normal monthly payments. The Variable Rate Mortgage happens to have one of the best prepayment plans. Prepay up to 15% of your mortgage, without penalty on an annual basis. You also have the ability to DOUBLE your monthly mortgage payment on any payment date.
The Variable rate mortgage gives you the opportunity to save money while the prime lending rate is good and the comfort of knowing that when the time is right you can switch to a fixed mortgage.