FIVE TYPES OF MORTGAGES ONE CAN DEAL WITH

Taking a financial loan from the bank might become a headache; all thanks to the level of uncertainty that comes along the process of getting your loan application sanctioned. This is why mortgages have become the best way to deal with financial crisis since all you need to do is to choose the type of mortgage, find the best mortgage rate and a reliable lender or broker.
However, most of the people are only aware of a very few mortgage class like fixed rate mortgage, variable rate mortgage and so on. When you will consider mortgaging your property for some financial aid, then it’s crucial to assess various mortgage types so that you can have exactly what you desire.

So, let’s have a look at the common and the uncommon types of mortgages!

FIXED RATE MORTGAGE

If you want to enjoy the mortgage lowest rate in Mississauga, then the fixed rate mortgages are the ideal ones. Here, unlike ARM, the rate of interest is fixed and it is generally decided either by the Government’s ministry department or by the municipalities. However, various risks are associated with this particular mortgage type, which you must be aware of before choosing the deal.

ADJUSTABLE RATE MORTGAGE

The mortgage lowest rate in Ontario can be obtained from the adjustable mortgages. Here, the rate changes periodically after a fixed amount of time. Initially, the deal is so made that the rate is fixed. However, after the completion of the fixed tenure, one will have changing rates applicable on the outstanding balance.

INTEREST ONLY MORTGAGE

In the interest-only mortgage, the borrower cannot pay the actual principal in monthly installment. Here, one needs to pay only the monthly interest while the principal needs to repaid altogether at a specified date on the contract. The major advantage of this type of mortgage is that one doesn’t have to pay the principal added with the interest every month. Interest only mortgages are of various types, and hence you can easily pick one according to your needs.

REVERSE MORTGAGE

The reverse mortgage is perfect for the older persons whose age is minimum sixty-two. In this kind of mortgage, one can borrow a lump sum amount of money from the lender by selling the home equity. Once issued, the person will get fixed monthly payment from the lender, thereby making it possible for the older persons to live their life happily. Here, during the course of the mortgage, the borrower doesn’t need to pay any interest rate. The repayment of the amount can only be done under the

 following three conditions:

∙      The borrower dies
∙      The borrower moves into some property
∙      The borrower sells the property

GOVERNMENT-BACKED MORTGAGE

In some cases, the Government takes the responsibility of compensating the borrower’s losses in case he or she becomes a defaulter. These mortgage loans are issued in favor of the borrower and the government organizations provide a back up to the loan. As a result, one can have the lowest home mortgage rate in Mississauga, thus making the entire mortgaging property lucrative and affordable for the first time homebuyers.