High-ratio Mortgage

Definition

• A mortgage that exceeds 80% of the property's appraised value or purchase price, whichever is less. A high-ratio mortgage must be insured against default by CMHC or Genworth Financial.
• A mortgage in which a borrower places a down payment of less than 20% of the purchase price of a property

Synonyms
high debt, insured loan

Related Terms and Acronyms

• Canada Mortgage and Housing Corporation (CMHC) — Company Est. 1946, Canada-wide, Very Important,
  • The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
  ➥ Insures Canadian mortgage lenders.
• Cash Back Mortgage — Definition, Important,
  • A mortgage that provides the borrower a lump sum cash payment.
• Down Payment — Definition,
  • The portion of the purchase price a buyer pays, in cash, at the time the loan originates.
• GE Capital — Company,
  • GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC."
  ➥ Also offers commercial financing.
• Gift From a Family Member — Definition,
  • A gift of cash, to a mortgage applicant from a relative by blood or marriage, which the applicant is not required to repay. In some instances it is necessary to provide a written statement to that repayment is not required.
• Loan-to-Value (LTV) — Acronym, Very Important,
  • The ratio of the principal amount of the loan to the lesser of the purchase price of the property or the property's appraised value. This can be expressed as an 80% loan, or 80% LTV.
  ➥ A widely used term in the mortgage brokerage and lending industry, especially by mortgage underwriters.
• Low-down Mortgages — Definition, Important,
  • Mortgages with a low down payment, usually less than 10 percent.
• Low-down-payment Loan — Definition,
  • A mortgage where the borrower puts down a small amount and borrows a high percentage of the purchase price.
• Maximum Financing — Definition,
  • A loan given for a property where the buyer puts down the lowest allowable down payment possible.
• Mortgage (mtg) — Abbreviation, Important,
  • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
• Mortgage Disability Insurance — Definition, Important,
  • Insurance that covers mortgage payments if a policyholder becomes disabled.
• Principal — Definition,
  • The original balance of money lent on an outstanding loan and fees, excluding interest. Also the remaining balance of a loan, excluding interest.
• Zero Down Mortgage — Definition,
  • A mortgage product that allows the borrower to financing 100% of their property.