Mortgages
A mortgage is a formal document through which a borrower, or mortgagor, gives the lender, or mortgagee, a lien on real property which serves as security for a debt. A mortgagee is a financial institution, or in some cases an individual, who holds a mortgage against a piece of property which serves as security for a loan. A mortgagor, on the other hand, is a person who has offered a mortgage on their property in exchange for money. During the period of the mortgage, the mortgagor will have use of the property, and once the obligation has been fully repaid, the lien will be removed.
In simpler terms, a mortgage is a home loan. The actual loan amount is referred to as the principal, and the mortgagor is required to pay back the principal, along with interest, over a repayment period known as the amortization of the mortgage.
Spotlight on Mortgages
Why Use a Mortgage Agent Instead of a Bank?
This video takes a look at some of the reasons why using a mortgage agent or broker might be better than approaching a bank directly for a new home loan. It argues that a mortgage agent is able to shop several lenders for a loan at the lowest rate that fits a home buyer's situation, while a bank ... Continue Reading »
Getting Mortgage Help from the Canadian Government
After World War II, the Canadian government established and operated the CMHC, or the Canadian Mortgage and Housing Corporation, in order to improve the strength of the housing market. The CMHC website ...
Why Use a Mortgage Agent Instead of a Bank?
This video takes a look at some of the reasons why using a mortgage agent or broker might be better than approaching a bank directly for a new home loan. It argues that a mortgage agent is able to shop ...
What is the Subprime Mortgage Crisis?
Subprime means below the Bank of Canada's key interest rate, which all banks and lending institutions use to establish their own lending rates. While many banks generally charge about 3 percent or more ...
About Mortgages
Mortgages may be used for various things such as the purchase or construction of a new home, the purchase of an existing home, to finance renovations, to finance the purchase of investment property, to finance the purchase of other investments or even to refinance for purposes of debt consolidation. Refinancing is the arrangement of a new mortgage for an increased amount, whereby the old mortgage is paid off or discharged from the proceeds of the new loan.
One may use a mortgage calculator to calculate their monthly payments for the mortgage. Mortgage payments are the regular installments which are made towards the repayment of the principal and interest on a mortgage. The mortgage rate is the percentage interest that is paid on top of the mortgage principal. For instance, if you take out a mortgage of $250,000 at a rate of 10%, the monthly payments will comprise of a portion of the original $250,000, in addition to a 10% interest. Because a mortgage is a fully secured form of financing, the interest paid is normally less than what is paid on most other financing methods. The fact that the interest rates are lower with mortgages enables borrowers to even write off those interest costs against their taxable incomes. The term of the mortgage is the length of time during which a lender lends mortgage funds to a borrower. This period may range from anywhere between six months up to a maximum period of 25 years. Usually, the total length of the mortgage comprises several terms.