If you are looking to buy a home – or refinance an existing mortgage– securing the financing can be difficult in some cases. A lot of our customers end up putting two loans together so that they can overcome the hurdles associated with financing the desired property. On the positive, even though you have two loans, you also end up avoiding private mortgage insurance (PMI) premiums as it no longer classified as a high ratio mortgage.
Combination Mortgage Calculations
Generally, one of the two mortgages will be significantly larger than the other, such as a 70% LTV first mortgage with a 10% second mortgage top up, which means that you’re putting 20% down. Even though the smaller mortgage will have a higher interest rate than the bigger one, you’re blended rate may still be affordable – this is where the calculator comes in.
For example, you enter your purchase price and the amount that you want to finance, up to 80% of the purchase price. If you’re doing this, you want to make sure that the mortgage payments fit easily within your budget, with a good bit of wiggle room. You must also keep in mind that a combination mortgage is designed to be short term so that you can transition to a single mortgage with a traditional lender with lower rates. In some cases, there are ways to work with a homeowner make a combination mortgage work for you.
If you are having a hard time finding conventional financing, or if you are looking for a private lender to fund the second loan in your combination mortgage, Amansad Financial has connections with an entire network of lenders serving Canada who work with customers that have special lending needs. Give one of our combination mortgage specialists a call today, and we will connect you with one of our private lenders who are looking to profit from the real estate industry – and we can make this a win-win scenario for you both.