You want to buy a house in Chilliwack and need a mortgage or want to remortgage your current home? Some people think their only option is to go to their local bank - preferably the one that already has their chequing account! However your options are much greater then that. Let's explore some of them :-)
1) Mortgage Lending Centres- are located in the larger metropolitan areas like Vancouver, and are used by the mortgage brokerage industry extensively. These types of lenders are policy and documentation driven with stringent policy standards. Rates are usually competitive.
2) Local Financial Institutions - these lenders are usually easier to deal with because they're local. These lenders are in a position to be more creative and are able to work with policy but are able to make exceptions within reasonable limits. They are also more in tune with the local markets and have the ability to approve those difficult deals without going to a head office.
3) Mortgage Investment Companies - these are large mortgage brokerage firms that manage and invest private funds on a large scale. They are easier to deal with however rates are usually higher and loan-to-values are usually much lower (75.0% or less) than the standard 80% through conventional sources. A good source when one does not qualify through the conventional lenders.
4) Private lenders - these are individuals that administer their own funds and use a mortgage broker to obtain/arrange their mortgages. All financing details are processed through the private investors notary or solicitor. Rates are established based on the clients circumstances but are within reason so that it is affordable to the borrower. Loan to value ratios are maintained at a very strict level of 75.0% or less depending on the deal. Brokerage fees are charged when private funding is used and these fees are payable to the mortgage broker and paid by the borrower from the mortgage proceeds.
Mortgage Brokers - can use any of the above resources and sometimes you'll find that the relationships they've developed within these various sources can help insure that you get get a better rate.
Remember! The posted Rate - is only the Posted Rate - typically you can negotiate, or competitively shop a better rate depending on your specific financial qualifications. But you do have to ask ~ in many instances you will not be offered the best rate available unless you ask!
What do These Mortgage Terms Mean?
*Amortization is the amount of time needed to reduce the loan to $0. A conventional mortgage is 25 years, but amortization can range anywhere from five to 35 years. The shorter the amortization, the higher your regular payments will be, but the less you'll pay in interest over the life of the loan. Generally, amortization is several mortgage term periods.
*The mortgage term is the period of time that the mortgage agreement is in effect. These typically run from six months to 10 years. At the end of the term, you will either repay the full mortgage amount, or the mortgage is renegotiated at then-current market rates and conditions.
*Another decision when deciding on a mortgage term is whether to have a fixed rate or a variable rate. With a variable-rate mortgage, the interest rate changes as the prime lending rate changes and they generally offer the lowest rates.
*With a fixed-rate mortgage, the interest rate is set for the length of the mortgage term. Fixed rates, while slightly higher, offer you the security of knowing how much you'll pay in principal and interest on each regular mortgage payment.
Payment frequency. You can choose to make your mortgage payments monthly, semi-monthly (twice a month), bi-weekly (every two weeks) or weekly. The bi-weekly and weekly payments can be accelerated allowing you to reduce your mortgage principal more quickly.
A down payment - The amount of your own money that you use to buy your home - often expressed as a percentage of the purchase price.
If you or someone you know is thinking of Buying or Selling property in Cultus Lake, Chilliwack, Hope, Abbotsford, Langley or anywhere in the Fraser Valley Area of B.C. - or if you would like more information please give Liz Moras of Landmark Realty Chilliwack a call at- 604-799-0459 or e-mail at lizmoras@gmail.com.
Copyright © 2009 By Liz Moras, All Rights Reserved. All photos taken by Liz Moras and copywritten. Please do not use without permission. Information provided by this author is only an opinion, it is not guaranteed, may be based on information collected from several sources, and may be time sensitive. It is not necessarily representative of the opinions of Landmark Realty Chwk. Ltd.
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