Conventional Manitoba mortgage
or Manitoba mortgage conventional
An Manitoba mortgage that does not require a mortgage
default insurance fee. Typically this is a mortgage Manitoba
loan which is 75% or less of the purchase price or property
value. The good? By having a large down payment, you
can save thousands of dollars in insurance fees. The
bad? When you sell there will be less buyers eligible
to ‘assume‘ your Manitoba mortgage because
they may not have enough of a downpayment.
Non-conventional 1st Manitoba mortgage or ‘first’ Manitoba
An Manitoba mortgage that
is used when you need Manitoba lender financing which
is greater than 75% of your house
purchase or property value. This can also be called a ‘high
ratio’ Manitoba mortgage when it is a refinanced ‘first’ Manitoba
mortgage. The good? It allows people who don’t
have large down payments the ability to buy a house.
They do this by using mortgage default insurance. (See
CMHC or GE Capital below). Another good? It allows you
to refinance your house beyond its 75% appraised value
so you can access your equity and get cash out! This
allows people that are loaded up in other high interest
debt (credit cards) or high loan repayments (car loans)
the ability to payout these debts and conserve family
cashflow. The bad? The benefit of ‘insuring’ an
Manitoba mortgage default costs a lot in premium costs
- but, thankfully, this can be added to the ‘first’ mortgage
Manitoba loan. The cost is minimized if the real estate
market is rising or stable as it allows people to buy
real estate today - rather than waiting years to save
up more of a down payment.
Manitoba mortgage Second or Second Manitoba mortgage
(Manitoba home equity loan)
An Manitoba mortgage second or second
Manitoba mortgage (also called a Manitoba home equity
loan) is usually
a non conventional mortgage Manitoba loan. Often it
is used when Manitoba mortgage financing exceeds 75%.
This is usually made available through private Manitoba
lenders rather than institutional Manitoba lenders.
A private Manitoba second mortgage or Manitoba mortgage
second is used with your mortgage Manitoba first priority.
Your personal Manitoba mortgage broker will advise
you when this makes sense. The good? Sometimes, your
current down payment amount available PLUS a new Manitoba
second mortgage allows you ’enough’ of
a down payment to qualify for a non conventional purchase.
You can then avoid paying mortgage default insurance
altogether. And that can save you thousands in default
mortgage insurance premium dollars. Also, an Manitoba
mortgage second or second Manitoba mortgage (Manitoba
home equity loan) will allow you to access your cash
in your home equity. This allows you to improve your
monthly cash flow by paying off other higher interest
debt (credit cards) AND other debt that has high monthly
payments (car loan). Also there is no default insurance
payable when you obtain a private Manitoba mortgage
second or Manitoba home equity loan as the lenders
are private and do not charge an insurance fee. The
bad? Second mortgages always have a higher interest
rate cost than a first mortgage because there is a
higher perceived risk by the lender with the borrower.
CMHC or GE Capital
Mortgage Insurance companies licensed by the Federal
Canadian Government to provide mortgage insurance for
Manitoba lenders. This insurance protects Manitoba lenders
against default by borrowers. The insurance is usually
added to the mortgage Manitoba loan. The good? This insurance
enables many more buyers to enter the market which keeps
housing demand strong. It allows people to be able to
buy with a low down payment. The bad? Premium rates range
from 0.5% to 3.75% or more of the mortgage Manitoba loan
‘Open’ Manitoba mortgage or a ‘Closed’ Manitoba
An open Manitoba mortgage
has terms from 6 months to 1 year This is an Manitoba
mortgage in which you can
prepay all, or part of the original balance without penalty.
The good? You can save usually 3 months interest charge
penalty or more for the entire Manitoba mortgage balance.
This is helpful if you plan to pay down your mortgage
Manitoba loan with a large sum, or the entire balance
of your Manitoba mortgage in a short period. The bad?
Manitoba lenders charge higher rates than for closed
terms because of this convenience. Here is a helpful
tip from your personal Manitoba mortgage broker. If rates
are going up…and you are moving…get a closed
term Manitoba mortgage. You can ‘port’ your
current Manitoba mortgage to your new place.
A closed Manitoba mortgage
has terms from 6 months to 10yrs. The good? The rates
are lower than ‘open’ mortgage
Manitoba loans. The bad? You need to be careful to pick
a term that suits your needs. Your personal Manitoba
mortgage broker can explain to you the risks of not choosing
a term that suits your needs. You may be faced with a
large penalty if you try to prepay too much or try to
switch your Manitoba mortgage to another Manitoba lender
in the middle of your term.
ARM Manitoba mortgage or Variable Manitoba mortgage
The ARM (Adjustable Rate Mortgage)
or Variable rate Manitoba mortgage is all about the ‘rate’ charged
with your mortgage Manitoba loan. Instead of a ‘fixed’ rate
the rates fluctuate. These variable Manitoba mortgages
can be either open or closed. Terms are from 6 months
to 5yrs. Rates fluctuate with prime, usually monthly
but can be every few months. Variable mortgage Manitoba
loans have been historically extremely popular. The good?
Manitoba mortgage rates are as much as 2 or 3% below
the 5 year fixed rates. This can save you up to $200
or more interest per month on a $100,000 Manitoba mortgage.
The bad? You will pay a penalty if you want to pay it
off early or switch lenders. Or you may find yourself
chasing headlines when prime rates rise. Ask your personal
Manitoba mortgage broker for advice on obtaining the
best variable mortgage Manitoba loan. The good? Most
Manitoba lenders will let you convert to a fixed rate,
closed term, without penalty. If you are lucky you can
save tens of thousands off the principal and interest.
This will take years off your amortization on your Manitoba
First a disclaimer. No Manitoba
mortgage or mortgage Manitoba loan is portable. It
is the rate and term that
are portable. If you move to a new place and want to
take your Manitoba mortgage with you, you will need a
new Manitoba mortgage with the same rate, term, and amortization
that was left on your old place. The good? The benefit
of a portable mortgage is that you may keep your low
rate and not have to pay CMHC or GE Capital fees again.
The bad? You will have to re-apply - even if you are
staying with your present Manitoba lender. And, you will
still owe a ‘pound of flesh’ as you will
have to pay legal fees.
If you would
like Gregory Stanley, CFP AMP to be your personal
mortgage broker to help you with all your mortgage
financing needs Apply