Salmon Arm Shuswap mortgage contacts to make your purchase seamless

Explaining which type of mortgag and/or tailoring your financing needs for your Salmon Arm Shuswap real estate purchase is best handled by local area financing professionals:

Vic Hamilton
Bayfield Mortgage
250.833.9183

Sue Foubert
TD Canada Trust
250.833.8790

Corine Hild
Tekemar
250.832.8766

Fixed-rate mortgages:
Their interest rates won't change over the term of the mortgage. "They're great for first-time homebuyers," says Catherine Adams, Royal Bank of Canada vice president, home equity financing. "There's no surprises, no volatility. But if you want to pay the mortgage off early, there's a penalty for breaking the mortgage contract."

Variable-rate mortgages:
The interest rate fluctuates as the prime rate goes up or down. "If interest rates go up, your payment stays the same, but more of it goes into paying the interest so your amortization period increases," Adams says. "But studies have shown this works in your favour over time -- that you'll have your mortgage paid off faster with a variable than with a fixed-rate mortgage. Canadians, however, have their mittens on and are still shy of variable-rate mortgages. The 2007 survey shows only 13 per cent of those surveyed wanted variable-rate mortgages."

Open mortgages:
This offers holders the flexibility to make large payments or pay off the entire mortgages without penalty. Interest rates are usually higher for this privilege. "Open mortgages are good if you know some cash will be coming your way, but we see very few of them ever getting paid off," Adams says.

Closed mortgages:
Rate of interest and length of term will not change over the term of the mortgage, and they're generally less expensive than open mortgages, Adams says. Most closed mortgages allow the holder to pay off up to 15 per cent of the mortgage once a year without penalty.

Hybrid, convertible or combination mortgages:
These allow holders to change the type of mortgage during its term. "You can have part of your mortgage in a variable- and part in a fixed-rate mortgage to diversify the risk of your interest rate rising," Adams says.

Conventional mortgages, she notes, have down payments equal to 25 per cent or more of the purchase price of the home. "If you have less than 25 per cent down, you'll need mortgage insurance," she says. "One hundred per cent financing is available, but your credit must be clean and you must show you can cover the closing costs."

(Source: Vancouver Sun article: "Boomers drive surge in downsizing")