Rick White Sutton Group West Coast Realty

Cell (604) 828-3847 | EMAIL rwhite@sutton.com |

WHAT YOU NEED TO KNOW ABOUT MORTGAGES

STANDARD MORTGAGE OPTIONS

  • A mortgage is a loan, generally used to buy a property.
  • How much you pay depends on how much you borrow.


STANDARD MORTGAGE TERMS


Principal                       =        How much you borrow


Interest rate                  =        How much the bank charges you to borrow the nmoney


Amortization Period   =         How long it takes to pay off the mortgage


Lender                          =        Mortgage Company, bank or lending institution


  • Mortgage Terms and Rates are often negotiable, depending on the lender.
  • Do not be afraid to negotiate interest rates and mortgage terms with different lenders.
  • They are offering you a product and talking to more than one lender helps you make an informed decision.


WHAT TYPE OF MORTGAGE IS BEST FOR YOU ?

  • Fixed rate mortgages: Your interest rate is locked in for a specified period called a term.
  • Your payments stay the same for the mortgage’s term so you will not pay more if interest rates increase over time.

Variable rate mortgages:        

  • Rate of interest you pay may change if rates go up or down.

Conventional mortgages:        
  • Require a down payment of 20% or more of the property’s value.
  • You are not required to get mortgage default insurance with a conventional mortgage.
 
Closed mortgages:                  
  • The mortgage cannot be paid off early without paying a prepayment charge.
 
Open mortgages:                    
  • A mortgage that can be paid off at any time during the term, without having to pay a charge.
  • The interest rate for an open mortgage may be higher than for a closed mortgage with the same term.
 
WHAT MORTGAGE FEATURES ARE BEST FOR YOU ?
 
Portable mortgages: 
  • You sell existing home, you can transfer your mortgage to your new home and keep your existing interest rate. 
  • You may be able to avoid prepayment penalties by porting your mortgage.
 
Prepayment privileges: 
  • You can make lump‐sum prepayments or increase your monthly payments without having to pay a charge.
  • This can help you pay off your mortgage quicker and save on interest penalties.
 

WHAT TYPES OF MORTGAGE PENALTIES MIGHT YOU HAVE TO PAY ?

You may have to pay penalties if you prepay large portions of your mortgage early or if you break your mortgage due to unforeseen life changes, such as marital breakdown, death of a spouse or relocating for a job. It is your right to know how lenders calculate prepayment penalties. Read your mortgage contract carefully and make sure you understand how penalties will be calculated before you sign.


HOW MUCH DO YOU NEED FOR YOUR DOWN PAYMENT ?

  • A down payment is the portion of the property’s price not financed by the mortgage.
  • You will need a down payment of at least 5% of the purchase price of the home.
  • For example, to buy a home for $300,000, you will need at least $15,000 as your down payment.
  • If your down payment is less than 20%, you will need mortgage default insurance.
 
CONTACT ME TO DISCUSS YOUR REAL ESTATE NEEDS
 
Mobile:        604.828.3847
eMail:          rwhite@sutton.com
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