Avoiding a Mortgage 80 20 Mortgage Insurance [mortgagecalculator-tips.blogspot.com]
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www.jacklyns.ca | jacklyns@dominionlending.ca | 604-916-4727 C Hi, Jacklyn Saunders here with Dominion Lending Centres. This video is about the new rules that will be put in place on INSURED mortgages only. An insured mortgage is when you put less than 20% down. We call this type of mortgage "high-ratio". If you are considering buying a home and have 20% or more to use for a down payment (also known as a conventional mortgage)-- this will not affect you at this moment. The gov't states these changes are in place to support the long-term strength of the Canadian housing and mortgage markets and promote savings through home ownership The new rules will take effect on July 9, 2012. The new rules include: The maximum amortization (with is the amount of time it will take you to pay off your mortgage completely) has been reduced from 30 years to 25 years for INSURED mortgages only right now. Limiting the amortization period will reduce the interest payments you make on your mortgage, helping build equity in your home more quickly and pay off your mortgage sooner. This decrease will result in a mortgage payment increase -over the life of the mortgage, this increase will result in a substantial reduction in total interest payments, meaning more of your money goes towards the principal of the mortgage rather than the interest. Another change is in regard to refinancing. The limit has been decreased from 85% of your home's value to 80%. So if you wanted to refinance and take out ...
mortgagecalculator-tips.blogspot.com New Insured Mortgage Rules in Canada - June 2012
An 80 20 mortgage loan is also referred to as a zero or no money down loan later. There is actually two loans, mortgage home regular home accounts for 80% of the price of the house and a second mortgage or loan capital consisting of 20% of the cost. The idea behind this type of loan is to avoid mortgage insurance (PMI) since the net worth of mortgage payment.
- No cost refinanceAlmost all mortgages require a form of mortgage insurance, if you are unable to doA deposit of at least 20 percent. By acquiring a second mortgage or home equity loan for 20 percent of the costs you can get around this requirement, the second property loans as a deposit.
There are variations on this type of loan, a loan 80-15-5.
This means that the borrower was a big mortgage to 80 percent of the purchase price of the house, a mortgage on his back 15 percent, and made a 5 percent down payment. This can be a good option if you have somethingThe money for a down payment, but not enough to cover the entire 20%. - No cost refinanceThe second mortgage may be a second or a fixed mortgage may be a line of credit. If there is a fixed second mortgage so the interest rate is usually fixed for the duration of the loan. Most mortgages are fixed rate second half from 30 to 15 that the second mortgage is amortized over 30 years, but is payable in 15 years.
The advantage of going with the credit line as a second mortgage is that interestis usually much lower than the second mortgage interest rate fixed. You can also use an interest only loan can save you hundreds of dollars in mortgage payments every month.The 80 percent first mortgage can be a fixed interest rate (15 years or 30 years), with variable interest rate (typically 1.5, 1.7 or 10/1fixed period ARM) or interest-free loan only. Normally, the interest rate for mortgage loans second highest rate for the first loan. But because the borrower has to payMortgage insurance that cost less than a traditional mortgage, the mortgage interest rate higher for the second loan.
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