With so many mortgage and home loan types available, it can be difficult to know which plans to pursue. This is why choosing a trusted broker for your mortgage in Burlington, ON is so vital to choosing the right loan for you. Diane Bertolin and her team of experts specialize in finding the perfect fit for everyone that walks through the door. They will do the same for you, too. If you’re ready to choose a loan that fits like a glove and helps you to get to that ‘next level’ in life make the call to Diane Bertolin today. But before you do, take a look at a few simple explanations to some of our most popular loans. It’s a great starting point to figuring out what you want and will help to elevate our conversation the moment you walk through our door.
Fixed rate loan
It’s one of the most requested mortgages in Burlington for a reason. A fixed rate loan is easy to understand yet simultaneously painless to pay off. A fixed rate loan is exactly what it sounds like: a home loan with a static interest rate that doesn’t change for a set period (usually 1-5 years). The interest rate is often higher than loans where the interest rate fluctuates (more on that in our next loan type). Yet, for the household that wants a home loan they can plan ahead and insert into their budget this is a popular choice.
Adjustable-rate mortgage (ARM)
Households that can live with a fluctuating interest rate may want to inquire about this mortgage in Burlington. An adjustable-rate mortgage (known as an ARM loan) is reviewed at certain intervals where the interest rate is then adjusted. Although this also affects the monthly premium, this can be to your benefit. If the interest rate drops on your mortgage this will lower your monthly premiums more than if you used a fixed rate loan. Unfortunately, this works both ways. Speak to our team to learn more about whether an ARM is right for you.
Conventional (low ratio) mortgage
Do you have at least 20% for a down payment on that dream home? Then you’re eligible for a conventional mortgage. These loans have a low loan-to-value ratio, meaning the amount of the loan is comparatively low to the property’s value. Although mortgage insurance isn’t required for this type of mortgage in Burlington, your mortgage professional may recommend getting it (more on that below).
High loan-to-value (high ratio) mortgage
As you may have guessed, this type of loan is when borrowers borrow more than 80% of a home’s purchase price or the appraised value (generally, whichever price is less). For borrowers thinking about obtaining a high loan-to-value mortgage, keep in mind you must obtain mortgage insurance. To qualify for a high loan-to-value mortgage you must meet the following pre-requisites:
· Mortgage amortization must be 25-years or less.
· The purchase price of the home must be less than $1-million.
· Borrower’s credit score must be at least 600.
· Borrowers must live in the home (no rentals).
Note that the more you pay on your insurance the less you will be charged. Although it makes sense, don’t think that mortgage insurance isn’t going to cost you a pretty penny over the life of your loan. As inconvenient as it may be, for borrowers that would prefer to access that cool 20% that would be used for their down payment as a nest egg, an emergency fund, or funds to fix up the new home it’s a tempting offer. Speak with your mortgage professional to figure out the best course of action for your financial situation.