An easy guide finding the right mortgage for you:
The world of mortgages can be a difficult place to navigate. There are many lenders with many different options to choose from. Getting good advice from a knowledgeable and trusted professional is key. We tapped into our Avalon Industries Chief Financial Officer, Rob Lowther, to give you a starting guide to finding the right mortgage for you.
Getting stated & choosing a financial institution:
1. Determine how much mortgage you can afford
- Set a realistic budget and determine how much you want to spend on a mortgage each month
- Use an online mortgage calculator (you can start with your bank) to figure out roughly how much you can afford to spend each month
2. Choosing a lender
- Approach a variety of lenders/banks to get several quotes and opinions
- A good mortgage broker will go to several institutions to find you the right deal and give you multiple options
3. Look at a lenders reputation
- How long have they been lending?
- What customer service options to they offer?
- Make sure they are stable - especially if they are lesser known
4. Things to look at in your mortgage
- Read all paperwork carefully
- Look at all requirements for documentation to qualify and at terms for pre-qualification
- Look at any penalties associated with moving the mortgage
- Determine ability to make extra payments
Your Mortgage: Finding the right mortgage terms for you
After choosing a lender comes choosing the mortgage terms. Here are some simple tips to guide you through.
1. The term of your mortgage
- The term is typically 1 to 5 years
- You are locked in for those years before you can move a mortgage
- Length of terms affects your interest rate
- It's good to have a portable mortgage - this means you can move it to a new property - make sure you check with your lender for details.
2. Type of mortgage
- Fixed - interest rate does not change over term of mortgage
- Variable - interest rate can fluctuate over term of mortgage
3. Payment frequency
- Monthly
- Bi-Monthly
- Bi-Weekly
- Weekly
Rob recommends you set your payments to coincide with your work payment schedule so it is easier to budget.
Wrapping Up: Finding the right mortgage for you
With due diligence and research you will be able to find the right lender and mortgage for you. Once this is done you can relax and enjoy buildering your new home with Avalon.