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          TYPES OF MORTGAGES

5 year OPEN Variable Rate Mortgage
Prime + 0.80% for a FULLY OPEN Variable Rate Mortgage. All the flexibility you may ever need. This mortgage is available for Purchases right up to 95% financing and Transfers (if mortgage is already default-insured.


All-In-One Mortgage
For the client who wants flexibility in their borrowing capacity and repaying their loans, this is an excellent product.
1.Finance your projects: Renovate; Buy a house, car, boat or trailer; Travel; Maximize your RRSP; Start your business; Make a down payment on a rental property; Further your own or your children’s education
2.Carry out your routine transactions like a regular Bank account: Make withdrawals from banking machine Deposit your salary directly to your account Obtain cash advances
3.Grow your savings like a regular savings account: Multi-choice option and the revolving option are available on the All-In-One product Clients can combine a mortgage product and an All-In-One product as long as the LTV ratio is < 80%. Once the mortgage portion is paid out clients can ask NBC to increase the All-In-One authorized credit (top-up) max: 80% LTV without incurring legal fees (subject to credit approval and an appraisal could be required.
Advantageous interest rate: Prime + 0.50 %.  Minimum credit limit of $25,000. Can finance up to 80% of the property value. Minimum monthly payment: interest and life insurance premium (if applicable). Repay a set fixed amount or percentage of the principal. No monthly or annual management fees. Several bank charges waived. Advantageous interest rate on your savings; Client will receive a Client Card; Client can order cheques; Internet access is available through bank's Website (client must have a client card) Borrowers looking for more flexibility for their financing needs, self-employed, commission-based employee, employees with large bonuses tied to their performance, borrowers looking for an investment financing tool, upscale or wealthy.; Debt Servicing Ratios: 28/38 GDS/TDS; Minimum Beacon score of 670 impeccable credit and good rating; No previous bankruptcy, judgements or collection items.


Bridge Financing
Bridge financing refers to a special, short-term loan needed to cover the time gap when two properties, both firm sales, are involved and the closing dates don't match. The property being purchased closes before the one that was sold. There is a small set-up fee charged by the lender to have the bridge loan arranged, plus the cost of the interest as now you are carrying both properties for a short time. The rate charged on the bridge loan is about 2-3% above the bank's prime.


Closed Mortgages
A closed mortgage offers the security of fixed payment for terms from 6 months to 10 years with most financial institutions, and even 15, 18, and 25 years a couple select lenders. The interest rates are considerable lower than open, and if you are not planning on any one of the above reasons, then choose a closed mortgage.
Nowadays, they offer as much as 25% prepayment of the original principal, and that is more than most of us can hope to prepay on a yearly basis. If one wanted to pay off the full mortgage prior to the maturity, a penalty would be charged to break that mortgage. The penalty is usually 3 months interest, or interest rate differential (I.R.D. - please refer to glossary for detailed explanation).


Conventional Mortgage
A conventional mortgage is a loan that does not exceed 80% of the purchase price or appraised value of the home, whichever is less. This type of mortgage does not have to be insured against default.


Equity Mortgages
These are mortgages that are assessed on the equity of the home (market value minus the mortgage amount). They can be as high as 75% of the purchase price or value of the property and if more is required, we can look at a small 2'nd mortgage. These are generally offered to applicants that do not meet the normal income and/or credit qualifying guidelines. You may have little or no income verification, self-employed, and/or your credit may be less-than-perfect. At homefund.com, we'll say yes when your bank says no.


First Mortgages
A 1'st mortgage is the first debt registered against a property that is secured by a first "charge" on the property. If a default on the mortgage occurs, the first lender has first right on the property to recover the outstanding principal and interest costs, and any other costs incurred during the process. Second Mortgages: A second mortgage is a debt registered after a a first mortgage has been registered. In most cases, the interest charged on the second is higher than the first, reflecting the higher risk to the lender, but over a short term, still more cost effective than paying the high cost of the CMHC/GE Capital insurance premium. They can be used to finance up to 90% of the purchase price or value of the home.


Fixed-Term Mortgages
With a fixed-rate mortgage, the interest rate is set for the term of the mortgage so that the monthly payment of principal and interest remains the same throughout the term. Regardless of whether rates move up or down, you know exactly how much your payments will be and this simplifies your personal budgeting. Mortgage terms with fixed rates range from a 6 month, 1,2,3,4,5,6,7,9,10,15,18, and 25 years.
In a low rate climate, it is a good idea to take a longer term, fixed-rate mortgage for protection from upward fluctuations in interest rates.


HELOC (Home Equity Line Of Credit)
HELOC is a combination of a Revolving Line of Credit and fixed term mortgage products under one credit limit. You can choose to use it only for the flexibility of a revolving credit facility, or you can customize it to suit your needs. The interest rate for the line of credit portion is set by the bank, but currently the range is from PRIME +0.50% to PRIME + 0.75%. The maximum limit that can be registered on a property is currently at 65% of it's value.


High-Ratio Mortgage - CMHC Insured / GE Capital Insured
A high-ratio mortgage is a loan that is above 80% and up to 95% of the purchase price or appraised value of the home, whichever is less. These mortgages must me insured against loss by either Canada Mortgage and Housing Corporation (CMHC), a Federal Government Corporation, or Genworth Financial, a private insurer. The premiums(*) can be added to the mortgage amount or paid at closing, and are as follows:

<
For Mortgages Up To:
80%
No Insurance Required
For Mortgages From:
80.01-85%
Premium is 1.75%
85.01-90%
Premium is 2.00%
90.01-95%
Premium is 2.75%

A little-known benefit of CMHC-insured mortgages:
When interest rates fall, many borrowers want to renegotiate their mortgages but a few have the right to do so, unless their mortgages are fully open. But if you obtained a longer-term mortgage, insured by CMHC, you can prepay it on payment of 3 months interest penalty - a lot cheaper than the Interest Rate Differential (IRD), which is the difference between the mortgage rate and current rates, on the outstanding balance, for the rest of the mortgage term. For example, if the difference in the interest rate was 2%, and the outstanding mortgage amount was $100,000 (which is locked in at 8%) and it had 2 more years to go until maturity, the IRD penalty would be approximately $4,000, whereas the 3 months' bonus would be $2,000. (To help you with the payment of the penalty, we have "cash-back programs" that will give you up to 3% of the mortgage amount).

Also, if you obtained an insured mortgage after April 1'st, 1997, the premium you paid on the mortgage is now portable to another property (if you closed before this date, it is not portable, meaning that if you bought another home and your mortgage needed to be insured, you must pay the applicable premium again. NOTE: This insurance is for the benefit of the lender against default. It is very costly and there is another way we can arrange a mortgage for you with a low down payment. That is with a 1'st mortgage and a 2'nd mortgage. For your unique situation, it may be less costly to consider this option. At homefund.com, our computers can quickly do a "break-even" analysis to your best advantage. Banks, on the other hand, cannot offer you this option as they cannot provide secondary financing over 80% of the purchase price or value of the property.


Mortgage For Self-Employed
Target Customer: Self employed and commissioned sales borrowers with good credit who cannot meet GDS/TDS requirements based on verifiable income. Same customer that requires financing up to 95% with non verifiable income.
Type of Product: A residential mortgage financing program for primary residences on a purchase, switch, or refinance.

Key Features:

  • Simplified Credit Adjudication: Waives standard GDS/TDS!
  • High Ratio Insured Financing: Includes refinances up to 90%!
  • Standard product Lineup Available: Includes all our mortgage products

Eligible Loan Purchase: - For a purchase and switch on conventional; for a purchase, switch, and refinance on Insured! LTV Ratio: - Up to 65% on conventional deals; up to 95% on Genworth Financial insured! Additional Features: - Full appraisal required on Conventional; Genworth will obtain and review appraisal on high ratio! - Maximum property value of $500,000! - Product is available for all fixed term from 6 months to 10 years! - Product is available on both variable products!

Borrower Qualifications:

  • Down payment must come from own resources (conventional and high ratio)
  • Uninsured: Most recent NOA for confirmation that taxes are filed and no tax arrears.
  • Insured: Three most recent NOA's for confirmation that taxes are filed and no tax arrears.

Mortgage Insurance Premiums (Insured): $300.00 Application fee Purchase/Switch: Refinance/with additional funds: 65.01% to 75% 1.00% 1.00% 75.01% to 80% 1.64% 1.64% 80.01% to 85% 3.00% 2.90% 85.01% to 90% 5.00% 4.75% 90.01% to 95% 6.00%


Multiple Term Mortgages
If you wanted the lower rates of a short term mortgage but wanted the security of a long term, why not choose both. Yes, "build your own mortgage" product. You can split your mortgage in as high as 5 parts, all having different terms, rates, and amortizations, but one total monthly payment. This way, you are spreading the risk. But, be prepared to be "hands-on" and watch the market very carefully here. This is not for everyone, as the time and stress levels are quite high. Refer to the section "Choosing a term that you can live with" for some more suggestions.


Open Mortgages
An open mortgage allows you the flexibility to repay the mortgage at any time without penalty. Open mortgages are available in shorter terms, 6 months or 1 year only, and the interest rate is higher than closed mortgages as much as 1%, or more. They are normally chosen if you are thinking of selling your home, or if expecting to pay off the whole mortgage from the sale of a another property, or an inheritance (that would be nice).


Pre-Approved Mortgage
A Pre-Approved mortgage is a Free and No-Obligation deal that lets you know before you go looking for your home or signing an offer to purchase, how much you can afford to borrow based on your qualification and personal credit rating. At homefund.com, we'll arrange for you the most competitive rates with longest rate guarantee period that goes up to 120 days - if rates go higher, your rate will not be affected, and if rates go lower, you get the lower rate. This protection is solely responsible for savings thousands of dollars for many people who obtained a pre-approval and the rates increase afterwards.

Too often in the past, the mortgage was left to the very end, but with our Online Pre-Approval or by simply calling us at 416-410-2886 or toll-free at 1-888-588-6666, things just got very simple. We can take care of this important process within hours. Once you are Pre-Approved, you can confidently negotiate an offer on a home. A seller also prefers to negotiate an offer of a purchaser who has been pre-approved. With more lenders, lower rates, and no-cost, no-obligation, make homefund.com your choice for your pre-approval.


The 50/50 Wise Mortgage
Features: - 50% of mortgage amount is in the 5 year fixed discounted rate. - 50% of mortgage is in the 5 year ARM (Adjustable Rate Mortgage) Ideally suited for: - Customers who are unsure whether to go Variable or Fixed. This product eliminates the biggest dilemma facing mortgage borrowers in today’s economy. - Customers who want a low interest rate and are more risk-averse than a typical ARM client. And only 50% of the mortgage is subject to interest rate risk. - Customers who want added flexibility in paying down their mortgage. The two portions operate independently of each other, so your customers can choose to make prepayments on the fixed portion which has the higher interest rate or they can choose to pay down the ARM portion aggressively which in turn further minimizes their future interest rate risk!


The 6 Month Convertible Mortgage
When rates are on their way down, or you may feel that they will in the near future, a 6 month convertible mortgage offers you the short term commitment at fixed payments, with an added advantage that while within the term, the mortgage is fully convertible to a longer term from 1 year to 10 years, at the drop of a dime. At the end of the 6 month period, the mortgage becomes fully open, where one can renew with the existing lender or transfer to another lender. Even though it is offered at many financial institutions, there are differences from one to the next - let a homefund.com mortgage specialist help you sort through the maze.


The Adjustable Rate Mortgage (A.R.M.)
The Adjustable Rate Mortgage (A.R.M.) provides a lot of flexibility, especially when interest rates are on their way down. The rate is set to Prime + 0.75% and can be adjusted monthly to reflect current rates.

This mortgage is fully convertible at any time without any cost to a term greater than the term outstanding at the time of conversion, and you will receive the discounted rates for the chosen term. This product is available for mortgages up to 95% of the purchase price, on approved credit.


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