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Purchasing a home in itself can be stressful enough. Being bombarded with unfamiliar jargon can add to that stress. Fortunately for you, we've created a helpful cheat sheet that will make you a mortgage expert in no time!

Collateral Mortgage
While this financing tool is generally not in the forefront in terms of mortgage plans, it has definitely been around for quite some time. With a collateral mortgage, you still have some elements of a conventional mortgage such as a predetermined interest rate and term. This loan agreement is secured by the collateral security of a mortgage against your home. Depending on the lender, you may be able to have your mortgage registered for up to 125% of its value. 

Advantages of a Collateral Mortgage
- You're able to diversify your mortgage with multiple components (Ie/ Part fixed-rate, part variable-rate, part secured line of credit)
- You're able to separate different portions of your mortgage for tax purposes.
- Easy to tap into your equity for debt consolidation, renovations or to invest in property or investments easily and in a cost effective manner. In addition, there are no legal fees associated with this.

Disadvantages of a Collateral Mortgage
- Having a collateral mortgage ties you to one bank
- No freedom to switch or transfer to another lender like a conventional mortgage. If you're wanting to switch to another lender for their attractive interest rates or features, you must start from the beginning which generally means incurring legal costs of $500-$1000.
- Not offered by all lending institutions

 This concludes our 4-part series. Hopefully we have equipped you with the tools necessary to be able to make wise decisions on what plan is best suited for your needs. Good luck in choosing a plan that is perfect for you!