9 Steps to Buying A Home - Buyer's Guide

Section 4.
at a glance
1
What are the types of
mortgages?
Open mortgages and closed mortgages
(p. 22).
2
What kind of mortgage
terms exist?
You can choose between short term and
long term mortgages (p. 22).
3
How does payment
frequency affect my
mortgage?
When you increase the payment
frequency, you reduce the principal
amount faster, pay less interest, and pay
off the mortgage sooner (p. 22).
4
What’s the difference
between a fixed or variable
interest rate mortgage?
A fixed rate is a locked-in rate that will
neither increase nor decrease for the
term of your mortgage. A variable rate
fluctuates based on market conditions
(p. 24).
5
How do I choose between a
fixed and a variable interest
rate mortgage?
This depends on your personal
preference and on the market
conditions (see p. 24 for a detailed
comparison).
6
What is a hybrid mortgage?
A hybrid mortgage is a combination
of fixed and variable interest rate
mortgage – part of the mortgage is
financed at a fixed rate and part at a
variable rate (p. 24).
7
What is Mortgage Default
Insurance?
Mortgage Default Insurance protects
the mortgage lender in case you are not
able to make your mortgage payments
(p. 25).
8
Do I have to have Mortgage
Default Insurance?
Yes, under circumstances, for example
if your down payment is less than 20%
of the purchase price of your home or
if your salary is not paid on a regular
basis (p. 25).
Monika Tarnik-Jedrusiak
416.822.7357 ext. Lic# M13000687
monika@mortgagepal.ca
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