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A new report has been launched by Daniel Char, a mortgage broker and home financing specialist based in Richmond Hill, ON. The report by Ultimate Mortgage & Finance Solutions Inc is designed to compare the differences between a standalone mortgage and a collateral mortgage for homebuyers.
Find out more at https://www.youtube.com/watch?v=3FC08bZe6WY
The newly launched report explains that many homeowners across Canada have the choice between a standalone or collateral mortgage when purchasing a new property. Daniel Char says that if for instance, a family, couple, or individual decides to purchase a home for $500,000 and secure it with a 20% down payment at $100,000, 80% of the value of the property will be registered.
Reducing the loan to $0 is the goal of this type of mortgage. However, the expert explained that with a collateral mortgage, instead of registering the percentage of Mortgage Borrowed, the bank can register up to 125% of the value the purchase price of the home. The advantage of this option is that the purchasers have access to a line of credit that is circulating and re-advanceable.
This is also known as a home equity line of credit or a HELOC, explains the report. It goes on to explain that with the standalone mortgage option, the bank will only register what the purchaser is borrowing, but with the collateral mortgage they register up to 125% of the purchase, which can be used as many times as the purchaser wants each time they pay it down.
Another difference is the fact that with a collateral mortgage, the purchaser will be looking to create a long-term relationship with the bank or lender. Whereas with the standalone mortgage, the favored approach is to find the best mortgage rate possible and potentially switch providers once the initial term ends.
A spokesperson said: “I would describe a collateral mortgage as turning your home into a giant credit card, which can be a double-edged sword. If used correctly, you can amass great wealth quickly, but if you abuse it, you can end up owing more than your house is worth.”
To find out more, interested parties are invited to visit the link provided. Alternatively, the company website can be viewed at https://www.danielchar.com.
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