Introduction to Mortgages

What is a Mortgage?

A Mortgage is an interest in property provided by the borrower as security for a loan. The borrower (mortgagor) receives funds, the lender (mortgagee) has an interest in the property until the loan is repaid.

Sources Of Mortgage Funding

Chartered Banks

Trust Companies

Life Insurance Companies

Credit Unions

Loan Companies

Finance Companies

Mortgage Brokers

Private Placements

Sellers

Requirements for Application

Cheque for appraisal of the house and application processing

Copy of Agreement of Purchase and Sale

Copy of Listing and Survey of the house

Verification of your annual income

Verification of amount you are investing in your new home

Types Of Mortgages

Conventional Mortgages

Loan cannot exceed 80% of the appraised value of the property

High Ratio Mortgages

Loan can exceed 80% of the appraised value.

The mortgage must be insured if arranged through a bank or trust company.

NHA Mortgages (Granted under National Housing Act 1954)

Lenders are insured against loss by The Canada Mortgage and Housing Corporation (CMHC) e.g.

Collateral Mortgage

Loan secured by a Promissory Note and then further secured by means of mortgage on the property.