FINE 4050 Chapter 5: Chapter 5 - Debts, Loans & Mortgages
12 Dec 2015
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Minimum down payment: expressed as a percentage of house"s price or appraised value; 5% in. Fixed rate: mortgage rate is constant through term of the mortgage; new rate applies when loan is renewed. Floating rate: interest rate adjusted periodically based on movement of market interest rates. Open mortgage: can pay off part or all of the loan at any time without penalties; usually have floating rates or a very short-term fixed-rate. Closed mortgage: restrictions on the amount of extra payments you can make; penalties for paying too much. Mortgage insurance: needed for most federally regulated lending institutions to lend to high- ratio borrowers, according to canadian bank act; protects lenders against borrowers" default; insurance premium paid upfront in lump sum, dependent on level of down payment. Financing purchases of property: negotiate price; decide how much of payment will be paid from borrowing, how much will be paid through own money (down payment)
