Learn Important Mortgage Basics as You Prepare to Buy a New Home

Mortgages are big investments that require financial stability and dedication. Start the process on the right foot by familiarizing yourself with different types of mortgages and rates, and learn helpful facts that will prepare you to be a responsible home buyer.

Types of mortgageshouse_mortgage__peter rawski

  • Closed mortgages:  Closed mortgages have prepayment options of up to 20% of the original mortgage amount. If you decide to pay out, renegotiate or refinance before the end of the term of a closed mortgage, prepayment costs will be applied.
  • Open mortgages: An open mortgage can be repaid at any time throughout the term, either in full or partially without any prepayment costs. Provides flexibility until you are ready to lock into a closed term.
  • Convertible mortgages: A convertible mortgage is similar to a closed mortgage, but gives you the option of converting to a longer, closed mortgage at any time without prepayment costs. . With this option you can make an annual prepayment up to 10% of the original mortgage amount.

Types of mortgage interest rates

  • Fixed rate mortgages: A fixed interest rate remains the same throughout the entire term. This option allows your payment to remain constant so you know exactly how much you will pay every month and what amount you will have paid off at the end of the term. Learn more about fixed mortgage rates.
  • Variable rate mortgages: A variable interest rate will fluctuate with the  Prime rate throughout the mortgage term. This impacts the amount of principal that you pay off each month as your mortgage payment will remain constant. Learn more about variable rate mortgages.

Mortgage Payment Options:

Mortgage payments can be made weekly, bi weekly, semi monthly and monthly.

Mortgage refinance options

A mortgage refinance option, known as Home Power Mortgage™, allows you to borrow additional money on your mortgage, so you can afford the things you’ve always wanted. For a low price, it can save you money and help you consolidate your debt into one convenient payment.

The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

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