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ATB Mortgage Solutions:
Choosing Your Mortgage
It is very important that you select a mortgage with options that are well suited to your personal and financial needs. We recommend that you read the following section to familiarize yourself with the mortgage options available. As well, be sure to ask questions when meeting with your mortgage specialist. The following information should help you choose
the mortgage options that are right for you.
1. Your Down Payment
The first factor in choosing your mortgage is your down payment: the
amount of money you can pay on the purchase price of your home before
you arrange the mortgage. The larger your down-payment, the less you'll need to mortgage.
Down payment requirements range from 5% to 20% of the purchase price,
as follows:
- Conventional Mortgages:
ATB Financial offers conventional mortgages for new and existing homes.
Conventional mortgages have the lowest carrying costs because they do
not have to be insured against default. Conventional mortgages are available
for up to 80% of either the purchase price or the appraised value of
the property - whichever amount is lower. Your down payment must be 20%
or more. With all conventional mortgages, you are responsible for the
cost of having your property evaluated by an independent appraisal company,
together with the legal fees related to preparing and registering the
mortgage and completing the purchase of your property.
- Low down payment insured mortgages:
ATB Financial offers insured mortgages for both new and existing homes
with lower down payment requirements than conventional mortgages. The
carrying costs are higher because they include a premium for insurance
to cover default of payment. Low down payment mortgages are also referred
to as High Ratio mortgages. These mortgages are available for a minimum
down payment of 0%. With all low down payment insured mortgages, you
are responsible for appraisal and legal fees as well as an application
fee for the insurance.
2. The Amortization Period
The Amortization Period is the entire period over which you choose
to pay for the mortgage. It is not be confused with the shorter Term Period (which is the shorter period of time during which your interest rate applies). You can choose an amortization period of up to 40
years, although you may enjoy considerable interest savings by selecting a shorter period. (Save Money by Reducing your
Amortization)
3. The Types of Mortgages
Open Mortgage:
- An Open Mortgage term offers full flexibility on paying the mortgage
in full or making any additional payments at any time at no cost. If
your preference is to completely payout the mortgage at any time at no
fee, then an open mortgage may best meet your needs.
Closed Mortgage:
- A Closed
Mortgage term offers a lower interest rate in comparison
to an open mortgage of the same term, PLUS the flexibility of
pre-paying your mortgage at no
cost. (Save Money with 20% +
20% Pre-payment Privileges)
If you will make regular
payments and perhaps limited pre-payments, a closed mortgage
will best meet your needs.
Convertible Mortgage:
- A Convertible Mortgage offers a lower rate than
an open mortgage of the same term. If you want the ability to change
to a closed term longer
than 6 months without a fee, the 6 month closed convertible
mortgage will best meet your needs.
4. Interest Rate Options:
Fixed Interest Rate:
- A Fixed interest rate means the interest rate and payments remain
constant to the end of the term. Fixed interest rates are available
for closed
and open mortgages.
Variable Interest Rate:
- With a Variable interest rate, the interest rate fluctuates with
money market trends. Your actual payments may not change during the
term but
if rates go down, more of your payment is applied toward the principal.
Variable interest rates are available for open mortgages.
5. Term Length of Your Mortgage
Term Length is the period during which the interest
rate applies. You can choose terms from 6 months, 1, 2, 3, 4, 5, and
7 years. Your tolerance for
risk and analysis of where interest rates are going will help you
define the best term for you. The longer the term the lower the risk (as you'll know for a longer period of time exactly what you'll need to pay).
Outlined
below is a description of three different term objectives, based on risk
tolerance.
Which Risk Profile do you most closely match?
 Degree
of Risk: Safety |
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Description:
You want stability and your monthly mortgage cost to remain consistent
for a long period of time.
You want peace of mind and are concerned about increasing rates.
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Recommended Term:
Longer terms of 4 years or greater at a fixed interest rate
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| Degree
of Risk: Moderate
Risk |
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Description:
You want some stability and your monthly mortgage cost to remain
consistent for a medium period of time.
You want some peace of mind.
You want to take advantage of possible lower interest costs.
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Recommended Term:
Medium term of 3 years at a fixed interest rate
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| Degree
of Risk: Higher
Risk |
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Description:
Your budget can absorb an increase in your mortgage payments should
interest rates increase.
You want to take advantage of lower interest rates.
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Recommended Term:
Shorter terms of 6 months and 1 year at a fixed interest rate or
any term at a variable interest rate
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For more information on ATB Financial's mortgage solutions, visit any
branch of ATB Financial, or call us today at 1-877-424-4045 (toll
free). For the branch hours and address of the ATB Financial location nearest you, please use the Branch
Locator.
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