subject: Top 4 Types Of Mortgage Solutions [print this page] People from all walks of life apply for various types of mortgage loans. Many a times, people do not even realize that the type of mortgage solution they have picked is not for them. However, it is not because they are deceived by the financial institutions or the banks. Rather, it is more due to stark superficial similarities between various types of mortgage loans. But, it is not in favor of people who want to get mortgage loans to meet to their essential requirements like, new house or a home renovation. Therefore, it is better to understand the four major types of mortgage loans, to ensure that you make the best pick out of several type s of loans offered by a mortgage service.
Low ratio mortgage
When you pay 20% or more of the total value or price of the house, you call it fixing the deal through low ratio mortgage. Since through this deal you make a large payment as down payment, therefore, such deals do not require mortgage insurance. Such types of protection are generally required when you are looking for high ratio mortgage services.
High ratio mortgage
When you talk of high ratio mortgage, it implies that the person who is purchasing the property is not paying more than 20% of the value of the property as downpayment. Such types of mortgage service do require protection of mortgage insurance.
Open mortgages
This is one of the most popular types of mortgage solution that is offered by mortgage service providers. In this type of deal you get the benefit of repaying the borrowed amount even at one time without paying any penalty. You do not have to make any fixed amount of downpayment nor have to pay any prepayment charges. However the rate at which a local mortgage broker can possibly negotiate the deal for you is always higher than that of the closed mortgage service.
Closed mortgage
This type of mortgage deal is considered to be most rigid of the deals that are offered by financial institution. The terms and conditions once set in the beginning cannot be changed in any circumstances, unless agreed upon earlier. Moreover, it has benefit of being available at comparatively low rate of interest in comparison to open mortgage.
Apart from the aforementioned top 4 types of mortgage solutions that a broker can negotiate for you from a financial institution, here are certain mortgage services that also offer additional solutions like fixed rate mortgage and variable rate mortgage solutions.
