Mortgages and home buyers

mortgage home buying in Toronto
Most people when purchasing a home for their family, do not have enough money available to pay for home in full, so they turn to banks for financial help. Depending on their income and expenses as well as their credit information, a bank approves them for a loan called mortgage or 1st mortgage.

In some cases bank will issue up to 95 percent of a full house value, that is determined by a professional  bank appraisal. This mortgage can be up to 35 years long, payable monthly or bi weekly. It will contain interest that is agreed on with the bank and principal, which is part of the  amount borrowed for the purchase of the home. If the homeowner is not able to pay their mortgage amount, the bank is allowed to sell the house at the house value, however if the profit is made on the sale of the home, the homeowner is issued that profit.
In some cases people apply for a loan called 2nd mortgage, it is a loan on top of their 1st mortgage and is usually given by a lender or a third party, it is a higher risk because 1st mortgagee has a 1st right to the house or its value, so the interest rate is significantly higher than for a first mortgage. This loan or 2nd mortgage however can be used towards anything that a homeowner needs, not like 1st mortgage that can be used only for purchasing a household.
Those 2nd mortgages usually are much shorter in length, so if 1st mortgage you can take for up to 35 years, 2nd mortgage is usually for 2 to 4 years.
People that pay cash for their house can use advantage of home equity line of credit, its a line of credit that is given by the bank based on the value of a home. The beauty of this program is that you can use it for anything that you would like, and have to only cover the interest portion every month. Even if you don’t pay any principal to the bank for as long as you need bank will never come after you or your property. The interest rate is usually a bit higher than a 1st mortgage.
There are several types of financing options available from bank institutions and private lander and the wise thing to do is to research the one that suits you the most by visiting mortgage specialist before making the decision.

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