There are many different types of mortgages. The two basic types of mortgages are Conventional Mortgage and High Ratio Mortgage. If you can’t afford the 20% down payment for a conventional mortgage, a High Ratio Mortgage allows for a smaller down payment so you can own a home – and you can own it now.
In Canada, mortgage insurance is required under Bank Act Law for those making less than a 20%down payment on a property. So if you purchase a home with a High Ratio mortgage, you will pay mortgage insurance.
Mortgage insurance is a win-win situation for both home buyers and lenders. Lenders rely on mortgage insurance to protect themselves from financial losses in case a loan is not repaid. This means you can get access to home ownership earlier at the lowest cost, and with a small down payment. It also means you will begin to build equity in your home sooner.
At First & Second Mortgages our goal is to create alternatives for home buyers with less than perfect credit. Your second mortgage in Canada is just a phone call away. Call First and Second Mortgages at 1-866-405-1228 and get started now.