Planning on getting a mortgage in Regina sometime soon? One of the questions on your mind might be this: “what’s the difference between a high ratio and a conventional mortgage?”
High Ratio vs. Conventional Mortgages in Regina
Today, we’ll discuss some of the basics of high ratio and conventional mortgages in Regina and how they differ.
High ratio mortgages
A high-ratio mortgage is a loan that requires the borrower to have a down payment of less than 20% of the purchase price. This means the lender must also cover part of the cost with mortgage insurance, which protects them if you default on payments. In addition, high-ratio mortgages usually require higher interest rates than conventional mortgages, so be prepared to pay more in interest.
On the other hand, a conventional mortgage involves at least a 20% down payment and no need for mortgage insurance since there is less risk for the lender. Because of this lower risk, lenders will offer better rates on these types of loans. In addition, conventional mortgages can also be used to purchase more expensive properties since more money is available for the loan.
Which is Right for You?
For most aspiring homeowners, this depends on their financial situation. If you have the funds available for a 20% down payment, then you might consider a conventional mortgage since it will likely save you money in the long run. However, if you don’t have enough saved up for a 20% down payment, then a high-ratio mortgage might be your best option.
No matter which type of loan you choose, make sure you understand all terms and conditions before signing any paperwork. It’s wise to do research and compare rates from different lenders so that you can find the best deal available to you.
Get a Mortgage in Regina
No matter which type of mortgage you decide, consult a qualified professional and do your research beforehand to determine what works best for you. Understanding the difference between high ratio and conventional mortgages can help move you one step closer to achieving your homeownership dreams in Regina.
Call the team at City Centre Mortgages today so we can help.