The Top 5 Important Types of Mortgages You Should Know

Mortgages can be a tricky subject to wrap your head around, but don’t worry! We’ve got you covered. We’re here to give you the rundown on the top 5 important types of mortgages you should know, and the pros and cons of each one.

Fixed Rate Mortgages

A fixed-rate mortgage is a loan with an interest rate that stays the same for the entire term of the loan. This type of mortgage is ideal for those who want stability and predictability in their monthly payments. With a fixed-rate mortgage, your monthly payments will stay the same no matter what happens to the interest rate.

Pros of fixed-rate mortgages include predictable monthly payments and the ability to budget with confidence. Cons include possible higher interest rates than variable-rate mortgages and the inability to take advantage of a lower rate if the market rate drops.

Variable Rate Mortgages

A variable-rate mortgage is a loan with an interest rate that can change over time. The initial rate of a variable-rate mortgage is usually lower than a fixed-rate mortgage, but the rate can increase or decrease depending on the market. This type of mortgage is ideal for those who are comfortable with taking on some risk in exchange for the potential to save money in the long run.

With a variable-rate mortgage, your payments can go up or down depending on the interest rate, so it’s important to be aware of the potential for fluctuation.

Pros of variable rate mortgages include lower initial rates and the potential to save money if the market rate decreases. Cons include the risk of higher payments if the market rate increases and the need to budget carefully to adjust to a changing payment.

Construction Mortgages

Construction mortgages are loans used to finance the building of a new home. These types of loans are typically more complicated than traditional mortgages, as they often involve multiple lenders and require more detailed paperwork. This type of mortgage is ideal for those who are looking to build their own home and have the resources to do so.

Pros of construction mortgages include the ability to customize the home to your exact specifications and the potential to save money if you are able to do some of the work yourself. Cons include the potential for delays and cost overruns if the project is not managed properly and the need for a large down payment.

Purchase Plus Improvement Mortgages

Purchase plus improvement mortgages are designed to help buyers purchase a home and finance the cost of renovations in one mortgage. This type of mortgage combines the purchase price of the home with the cost of the repairs and improvements into one loan. This can be a great option for those looking to purchase a fixer-upper and make improvements over time.

Pros of purchase plus improvement mortgages include the ability to buy a home that needs repairs and the convenience of having one loan to cover the entire purchase and renovation. Cons include the potential for higher interest rates than other loan options and the need to have a clear plan for the repairs and renovations.

Private Mortgages and Alternative Lending

Private mortgages and alternative lending products are loan options offered by private lenders, rather than traditional banks and financial institutions, such as banks and credit unions. These types of loans can be a great option for those with unique financial needs, such as those self-employed and who are unable to qualify for a traditional mortgage, as they often have more flexible terms and conditions.

Pros of private mortgages and alternative lending include the potential for more flexible terms and the ability to get approved with less stringent credit requirements. Cons include higher interest rates and the potential for predatory lenders.


Mortgages are an essential part of life, regardless of whether you are a first-time homebuyer or looking to refinance an existing loan. From fixed-rate mortgages to adjustable-rate mortgages and more, each type of mortgage has its own set of pros and cons. So make sure you do your research and know the risks before taking on any type of mortgage. After all, your home is your castle, so you want to make sure you’re making the best decision for your financial future.

Are you looking for reliable mortgage services in Ottawa? Look no further than Ottawa Mortgage Services! We understand that choosing the right mortgage can be a daunting task. That’s why we make it our mission to provide our clients with the best service and advice possible. We offer a wide range of mortgage products, from conventional mortgages to specialized products such as reverse mortgages, as well as home equity lines of credit. We strive to provide our clients with competitive rates and flexible terms, so they can rest assured they’re getting the best deal possible. Let us help you find the perfect mortgage solution for your needs! Contact us today to get started!


What You Need to Avoid After Getting Mortgage Pre-Approval

Obtaining a mortgage pre-approval is an important step in buying a home in Canada. It shows sellers that you are serious about buying a property and it also allows you to budget for your home purchase. However, it is important to know what to avoid after obtaining mortgage pre-approval in order to ensure that you still stay on track with your home purchase.

There are quite a number of things to consider when it comes to avoiding any missteps that could jeopardize your mortgage pre-approval:

Making Large Purchases

One of the key things to avoid after obtaining mortgage pre-approval is making large purchases. Making large purchases can have a negative impact on your loan approval and put you at risk of being denied for a mortgage.

When you are pre-approved for a mortgage, your lender will review your credit score and financial information to determine how much you can borrow. This is based on your current financial situation and the amount of debt you already have. If you make a large purchase after you have been pre-approved, this could affect your ability to get the loan approved.

Your lender will look at your total debt-to-income ratio as part of their review. If you make a large purchase after you have been pre-approved, this could increase your debt-to-income ratio and make it difficult for the lender to approve your loan. Additionally, making large purchases can also affect your credit score. It could make it harder for you to obtain a mortgage.

Applying for a New Loan

Another thing you should avoid doing is applying for any new loan or credit card. To obtain a mortgage pre-approval, you had to provide the lender with a copy of your credit report. This report contains information about your financial accounts, including any loans or credit cards you have. If you apply for a new loan or credit card, this account will show up on your credit report, which could have a negative impact on your pre-approval.

Missing Credit Payments

When you apply for a mortgage pre-approval, your lender will evaluate your creditworthiness and assess your ability to pay back the loan. As such, it is important to maintain your credit score and ensure that you keep up with your credit payments. Missing payments can have a detrimental effect on your credit score and may result in your mortgage pre-approval being declined or delayed.

Furthermore, missing payments can also affect your mortgage pre-approval conditions. If your lender finds that you have missed payments, they may suggest you take out a higher interest rate loan or require a larger down payment.

Changing Jobs or Leaving Your Company

It is crucial to remember that when you first apply for mortgage pre-approval, the lender will take a look at your current employment status. They will want to know that you have a steady job and a reliable source of income. If you change jobs or leave your current company after being pre-approved, the lender may need to re-evaluate your financial situation. This could result in your pre-approval being revoked, and you may have to start the process all over again.

Another reason to avoid changing jobs or leaving your company after obtaining mortgage pre-approval is that it can affect your credit score. Lenders also use your credit score to determine your ability to repay the loan, so any changes to your credit score could affect their decision. If you change jobs or leave your current company, your credit score may go down, which may cause lenders to reconsider your pre-approval.

Not Responding to the Lender

After you’ve been pre-approved, the lender will contact you regularly to provide updates and request other documents. It’s essential to respond to their inquiries and promptly provide any documents they request. Failing to do so can cause a delay in the mortgage process and potentially losing your pre-approval.


As a first-time home buyer in Ottawa, getting pre-approved for a mortgage is an integral step in the home-buying process. However, it’s crucial to remember that there are certain steps you must take during the mortgage pre-approval process and afterward. After being pre-approved, you should avoid making large purchases, applying for new credit, changing your job, or making significant financial changes. Doing any of these things could hurt your chances of getting approved for a mortgage, so it’s important to be aware of them.

Ottawa Mortgage Services is one of the most trusted local mortgage brokers in Ottawa that can help you become a homeowner. Contact us today and find out how we can help you!

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What You Need to Know about Debt-to-Income Ratio and Mortgages

A lender will assess your financial situation before granting you a mortgage to ensure that you can afford the payments and that you are stable. This is the lender’s guarantee that you can manage the mortgage.

That said, to assess your financial health, one of the things lenders look at is your debt-to-income ratio (DTI). A good DTI is vital in getting your mortgage approved and netting the best interest rates available.

What’s Debt-to-Income Ratio?

Debt-to-income ratio (or DTI) is the ratio of a person’s monthly debt payments to their gross monthly income. Lenders use it to assess borrowers’ ability to make loan payments. A lower DTI ratio indicates that a person can better manage their debt and is more likely to make their loan payments on time.

How Is Debt-to-Income Ratio Calculated?

DTI is calculated by dividing a person’s total monthly debt payments by their gross monthly income. The total debt payments include loans, credit cards, child support, and other debt-related payments. Gross monthly income refers to income before taxes and other deductions.

For example, if a person has $1,000 in monthly debt payments and earns $2,000 in gross monthly income, their DTI ratio would be 50%, which is calculated by dividing the monthly debt by the gross monthly income and then multiplying by 100.

What’s the Ideal Debt-to-Income Ratio for Mortgages?

Most lenders prefer to see a DTI ratio of 36% or less. This indicates that a person can better manage their debt and is more likely to make their loan payments on time. A higher DTI ratio may suggest that a person is overextended and may have difficulty making payments. It’s important to note that DTI is only one factor that lenders consider when making decisions about loan applications. Other factors include credit score, income, and assets.

It’s important to note that DTI is only one factor that lenders consider when making decisions about loan applications. Other factors include credit score, income, and assets!

What Can I Do to Lower My Debt-to-Income Ratio?

The first step is to create a budget. Knowing how much money you have coming in and how much is going out each month is essential for managing your finances. Once you have a budget, you can look for ways to reduce your expenses and pay off your debt.

Start by focusing on the high-interest debt first. Paying off high-interest debt is one of the fastest and most effective ways to lower your debt-to-income ratio. Try making more than the minimum monthly payments, as this will help you pay off your debt faster.

If you have multiple credit cards, consider consolidating them. Consolidating your credit card debt can help you save on interest and make it easier to manage your payments. You can also look into balance transfers, which allow you to move the balance of one credit card to another with a lower interest rate.

It’s also essential to make sure that you are making at least the minimum payments on all of your debt each month. Missing payments can lead to late fees and higher interest rates, increasing your debt-to-income ratio.

Finally, if you’re struggling to make ends meet, consider talking to a credit counselling service or a financial advisor. They can help you create a plan to get out of debt and lower your debt-to-income ratio.


As you can see, your DTI plays a massive role in your ability to get your mortgage. So, make sure to manage your DTI and ensure that it is in good shape. If it isn’t, work on it immediately so that when the day comes and the lender checks the numbers, they’ll be obliged to give you good deals! But of course, also focus on other factors like your credit score to ensure you get the best.

Ottawa Mortgage Services offers first-time homebuyers, self-employed individuals, and more the chance to get the mortgage they need to own their dream home. Reach out to us today and get the financial help that you need!

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How Mortgage Insurance Helps Increase Your Borrowing Power

Are you a first-time home buyer in Ottawa looking to apply for a mortgage? Then consider getting mortgage insurance first. Mortgage insurance is an important financial tool that helps Canadians increase their borrowing power when purchasing a home. It allows borrowers to secure a mortgage loan with a lower down payment or higher loan-to-value ratio, which can make home ownership more affordable. Let’s explore the importance of mortgage insurance and how it can ultimately help you boost your borrowing power when purchasing a new home.

What is Mortgage Insurance?

Mortgage insurance is offered by the Canada Mortgage and Housing Corporation (CMHC), the largest mortgage insurer in Canada. It provides lenders with protection in the event that a borrower defaults on their mortgage payments. Mortgage insurance also helps to reduce the risk of lending to borrowers who may not have the financial stability to meet their loan obligations. This can allow lenders to offer more competitive interest rates and loan terms, making it easier for borrowers to qualify for a mortgage loan.

In addition to protecting lenders, mortgage insurance also offers several benefits for borrowers. Most notably, it allows borrowers to purchase a home with a lower down payment or higher loan-to-value ratio. This can make it easier for borrowers to qualify for a mortgage loan and may help them to access more competitive interest rates and loan terms. Mortgage insurance can also provide borrowers with additional peace of mind, as they know that their loan will be repaid even if they experience financial hardship.

How Can Mortgage Insurance Boost Your Borrowing Power?

First, it is important to understand that mortgage insurance in Canada is mandatory when a borrower has less than 20% of the purchase price for a down payment. This is known as a high-ratio mortgage. Mortgage insurance helps reduce the risk for the lender, as it guarantees the loan will be repaid even if the borrower cannot make their payments. This allows lenders to offer higher loan amounts to borrowers with a smaller down payment.

In addition to providing increased borrowing power, mortgage insurance also provides a number of other benefits. For example, it can help to reduce the amount of interest that you pay over the life of the loan. This is because the insurance company will pay a portion of the interest on the loan, which can reduce your monthly payments.

Mortgage insurance can also help to reduce the amount of paperwork required when applying for a loan. It can help to speed up the loan process by providing the necessary documentation quickly and efficiently.

How to Get Mortgage Insurance

In Canada, mortgage insurance is offered by Canada Mortgage and Housing Corporation (CMHC). CMHC offers two types of mortgage insurance: conventional and high-ratio. Conventional mortgage insurance is required for mortgages with a down payment of less than 20 percent. High-ratio mortgage insurance is required for mortgages with a down payment of less than 10 percent.

When applying for mortgage insurance, borrowers will need to provide proof of income, credit history, and assets. They may also need to provide proof of a down payment and proof of payment of the closing costs associated with the purchase.

The cost of mortgage insurance varies depending on several factors, including the size of the down payment and the value of the property. Generally, the higher the risk to the lender, the higher the premium will be.


Mortgage insurance is an important tool that helps increase the borrowing power of Canadians. It allows Canadians to purchase a home without needing to put down a large down payment, which is especially helpful for first-time buyers. Ultimately, mortgage insurance helps ensure that Canadians can access the financing they need to purchase a home and build wealth.

Need a mortgage specialist in Ottawa to help you with your mortgage application? Ottawa Mortgage Services is here to help. We value relationships and strive to provide exceptional customer service and experienced advice. Our goal is to ensure that you have the best possible experience and that you get the mortgage that meets your needs. Contact us today to learn more about how we can help you.

Credit Card Debt

How Can Credit Card Debt Affect My Mortgage Application?

When applying for a mortgage, your credit history is one of the most important factors lenders will consider. A history of high credit card debt could negatively affect your chances of being approved for a mortgage loan.

How Can Credit Card Debt Affect Your Mortgage Application?

Credit card debt can greatly impact your ability to get a mortgage. This is because when lenders review your application for a mortgage, they will look at your credit score and credit history. High credit card debt can affect your credit score and, consequently, your ability to qualify for a mortgage. 

When lenders review your credit score, they will also look at the amount of debt you have on your credit cards. If you have a high amount of debt on your credit cards, this could indicate to the lender that you are not a responsible borrower and might be more likely to default on the loan. Therefore, lenders may be less likely to approve your mortgage application if you have a large amount of credit card debt.

How Does a Credit Score Work?

To determine a credit score, lenders look at a person’s credit report. This report contains information about a person’s credit accounts, such as credit cards, loans, and other types of credit. It also includes information about late payments, outstanding balances, and other financial activities.

Lenders then use this information to calculate a credit score. Generally, the higher the score, the better the person’s creditworthiness. Scores typically range from 300 to 850, with higher scores indicating a better credit history.

How Does Debt-To-Income Ratio Work?

DTI is an important indicator of a person’s ability to pay back a loan, as it provides a snapshot of how large a portion of their income is going towards debt payments. So how does the debt-to-income ratio work? To calculate your DTI, you’ll need two pieces of information: your total monthly debt payments and your gross monthly income.

Your total monthly debt payments include any payments you make on credit cards, student loans, auto loans, and any other form of debt. Your gross monthly income is the amount you make before any taxes are taken out. Simply divide your total monthly debt payments by your gross monthly income, and you will get your DTI.

How to Deal with High Credit Card Debt?

While it may seem daunting to try to pay off such a large amount of debt, there are some steps you can take to make the process a little easier. Here are some tips on how to deal with high credit card debt:

1. Create a Budget

If you’re not already doing so, start by creating a budget. This will help you better handle your finances and figure out where you can cut back to free up some extra cash to put toward your credit card debt.

2. Cut Back on Expenses

Once you’ve created a budget, take a close look at your spending and see where you can cut back. Even small changes can make a big difference in paying down your debt.

3. Make More than the Minimum Payment

If you only make the minimum payment on your credit cards, it will take you much longer to pay off your debt. Try to make more than the minimum payment each month to get out of debt quicker.

4. Talk to a Financial Advisor

If you’re struggling to make ends meet or are unsure where to start when it comes to paying off your debt, talking to a financial advisor can be a big help. They can offer advice on how to budget, how to make extra payments, and what debt consolidation options may be right for you.


It is important to remember that carrying debt – especially credit card debt – can negatively impact your mortgage application. Lenders will consider your debt-to-income ratio when evaluating your application, and a high ratio can make it difficult to qualify for a loan. If you are concerned that your debt may impact your ability to get a mortgage, it may be helpful to speak with a financial advisor to get more information.

If you are seeking mortgage services in Ottawa, you can work with us at Ottawa Mortgage Services. We offer services for first-time home buyers, and we also offer assistance with refinancing, pre-approvals, and debt consolidation. Get in touch with us to learn more about what we can do for you.