Thursday, October 14, 2010

5 Mortgage Mistakes and How to Avoid Them

Here are some mistakes a lot of people make:
  1. Not knowing what you can afford.  For a Broker, knowing what you can afford is not just about looking at your income. There are many elements to consider. We’re here to review the whole picture.
  2. Forgetting to include all expenses.  There are certain expenses that come with homeownership. Your broker will help you consider what is or may be on the horizon.
  3. Not planning for the futureOur expert advice that could help you save thousands of dollars over the lifetime of your mortgage.
  4. Hiring the wrong team.  As mortgage experts, we draw on our experience to help you find a mortgage suited to your needs.
  5. Skipping the home inspection.  A home inspection is a great bargaining tool when negotiating a sale price, and could help you avoid costly surprises after you purchase. 


So what's a person to do? 

Develop A Mortgage Strategy

Keep in mind, the best mortgage for you should be specific to your needs, but important considerations include:

Interest Rate Alone Does Not Guarantee The ‘Best’ Mortgage. Think about flexibility as well as value, so that you can choose to pay down your mortgage debt quickly, save on interest costs and ensure the flexibility required when making a housing change. 
Consider A Prepayment Clause In Your Mortgage. It will allow you to pay a lump sum or an extra payment towards your mortgage — without extra costs — giving you the freedom to repay more principal in a year if you choose. 
Payment Flexibility. Does your mortgage allow for increased mortgage payment options? 
Amortization Period. Shortening your amortization reduces the overall interest you pay, but increases your actual payments. 
Payment Frequency.  A more frequent payment schedule — for example, bi-weekly instead of monthly — may help you pay down your mortgage faster. 
Can You Refinance?  What are the costs if you choose to refinance your mortgage? If you are in a closed mortgage, consider the the fact that their may be pre-payment costs. 
Portability. Can you transfer the terms and conditions of your mortgage to your next home? This may allow you to keep a low interest rate if you sell one home and buy another. 
Assumability. Are you able to assume (take over) the existing mortgage on the property? It may have attractive features, such as a lower interest rate than the prevailing market. In turn, an assumable mortgage may be a selling feature for you when you decide to move on in the housing market. 

Remember that I am here to serve your needs.  If you want to chat feel free to reach out. My mobile number is 416.819.0912.

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