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High Ratio Mortgage For Maximum Borrowing Against Property

If you want to avail the maximum borrowing against your property then always go for High Ratio Mortgage. High Ratio Mortgage can fund you up to 90% to 95% of your property price. But, such loan usually require loan insurance or a guarantee. Hence, it is also sometimes termed as insured mortgage.

High Ratio Mortgage is generally available for traditional residential homes, investment properties and multi-unit residential complexes like apartment buildings. For a self-employed borrowers getting finance on low-doc programs, any loan that crosses 75% of the real estate security is deemed as High Ration Mortgage.

Since this type of mortgage is of high risk, all the traditional mortgage lenders in Canada are required to insure all of their mortgage loans, which exceeds the conventional mortgage maximums.

Advantages of High Ration Mortgage

The main advantages of the High Ratio Mortgage is that it allows for property purchase who has minimal down payment savings in their bank account. Existing home owners can use the equity to borrow for renovations, debt consolidation or else for personal use. The rates and payment options are identical to the conventional mortgages. The biggest truth of High Ratio Mortgage is that many people would not have been able to buy a home because of the ready cash required to make a substantial down payment.

Disadvantages of High Ratio Mortgage

The disadvantages of High Ratio Mortgage is that it is risky if the buyers are not able to manage the regular payments. This is because the options for a high ratio mortgage buyer are limited. They accept higher rates and the financing cost. The terms of their loans are usually longer and this in turn produce larger profits for the lenders thus adding a philip to the banking system.

High Ratio Mortgage has become much more prevalent these days in the mortgage industry and it caters to such borrowers who have a steady cash flow but fails to make any large amount savings in their bank\’s best savings account for the down payment.

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