Eau Claire Partners
Insurance Licensed held in
AB, SK, BC & ON
CML Canadian Mortgage Lender
Licensed in Alberta
www.cmlmortgages.com
Dale Parry
Pivot Your Finances
Mortgage Basics
A mortgage is a loan specifically used to purchase real estate, where the property itself serves as collateral. In Canada, mortgages typically involve borrowing a significant amount of money from a lender, which is repaid over a set period, usually 15 to 30 years, with interest. Understanding key terms such as principal, interest, and amortization is essential for homeowners. Additionally, factors such as down payment requirements and credit scores play a crucial role in securing a mortgage loan.
Mortgage Terms
Term: The duration over which a loan is scheduled to be repaid, typically ranging from 1 to 10 years. The most common terms are usually 3 or 5 years.
Principal: The original amount of money borrowed in a loan or the remaining balance on which interest is calculated.
Amortization: The process of spreading a loan into a series of fixed payments over time, with each payment covering both the principal and interest.
HELOC: A Home Equity Line of Credit (HELOC) allows homeowners to borrow against the equity in their property. It functions like a credit card, providing a revolving line of credit for expenses such as renovations. You only pay interest on the amount you withdraw; however, remember that your home serves as collateral, so borrow responsibly.
Down Payment: An initial payment made when purchasing a high-value item, such as a home. It is typically expressed as a percentage of the total purchase price.
Default Insurance: Is insurance that protects lenders in the event a borrower fails to repay their loan, ensuring that the lender recovers some of their losses. It can also assist the borrower by providing support to help ensure the lender receives their money if the borrower experiences financial difficulties.
Second Mortgage: A second mortgage enables homeowners to borrow against their property's equity while maintaining their original mortgage. Secured by the home, this loan provides additional funds based on the available equity.
Mortgage Options
First Time Home Buyer
Are you ready to take the exciting leap into homeownership? As a first-time homebuyer, you may have questions about navigating the process, understanding financing options, and finding the perfect neighborhood. With the right guidance and resources, your dream home is within reach. Reach out to us today to learn how we can help you on this incredible journey.
Renewal & Refinance
Understanding the difference between mortgage renewal and refinancing is crucial. Renewal occurs at the end of your term, allowing you to negotiate new terms with your current lender or switch lenders without altering the principal. Refinancing involves taking out a new loan to pay off your existing mortgage, often to obtain a lower interest rate or access equity. Evaluate your financial goals to determine which option suits you best.
Alternate/B Lending
B lending, or alternative lending, emphasizes non-traditional mortgage solutions designed for individuals with bruised credit, self-employment, and extended financial ratios.