Of Prime Interest: Getting the right mortgage

There are things you should look for to fit your goals going forward. Kelowna

Of Prime Interest column Of Prime Interest column

When purchasing a new home or refinancing or renewing your existing mortgage it is important to choose the right mortgage for you.

Lenders will differ in certain terms and conditions in their mortgages and there are things you should look for to fit your goals going forward.

•Am I allowed to pay off a certain percentage of the mortgage without penalty? Lenders will allow you to do so once each year – some on the anniversary date and others at anytime throughout the year.

•Am I allowed to increase my payments? The majority of lenders allow you to increase your payments once each year by 10 to 20 per cent of your original payment amount.

•Are monthly payments my only option? The answer is definitely no. Payment options available with most lenders are monthly, weekly, bi-weekly, accelerated bi-weekly and semi monthly. Some of these options will significantly reduce the amount of interest you pay over the life of the mortgage and as a result reduce your principal balance more rapidly.

•If I sell my existing home and purchase another one do I have to pay a penalty on a closed mortgage? Most mortgages today are portable. In the event of a sale and new purchase the lender will charge a penalty on the existing mortgage and depending on the lender will allow from 1 to 6 months for you to purchase a new home.

•What happens if I purchase a new home and require more money? You can still port the existing mortgage to the new property at your existing rate. Ported mortgage balance is $300,000 with an interest rate of 2.79 per cent and you require an additional $50,000. If the rate on the new funds is 2.59 per cent this rate will be blended with your 2.79 per cent existing rate and you will end up with a blended rate comprised of 50,000.00 at 2.59 per cent and 300,000.00 at 2.79 per cent

•Do all lenders calculate and charge the same penalties if I pay off my mortgage prior to the term being complete? Not all lenders calculate their penalties the same. The major financial institutions and credit unions have a higher posted rate and an interest rate differential penalty can be much higher than that with a mono lender.

•Can my mortgage be assumed? A potential purchaser can take over your existing mortgage terms as long as they qualify for the assumption and your lender allows for assumptions. This will avoid a penalty for you.

Of Prime Interest is a collaboration of mortgage professionals: Trish Balaberde: 250-470-8324 or trishb@creativemortgage.ca; Darwyn Sloat: 250-718-4117 or dsloat@creativemortgage.ca; Christine Hawkins: 250-826-2001 or christine@creativemortgage.ca.

Just Posted

Fire command centre relocating from Penticton to West Kelowna

Firefighting resources to be concentrated out of temporary camp

Updated: Highway 97 reopens to traffic, Peachland fire crews monitor fires this morning

Crews continue to battle the 1,000 hectare Mount Eneas blaze south of Peachland

Update: Wildfire crews continue to fight fire near West Kelowna

Evacuation alerts are in effect for properties in the Glenrosa area

Okanagan Mountain Park wildfire “stable” this morning

An evacuation alert remains in effect for those on Lakeshore Road

Updated: Complete list of B.C. Interior wildfire coverage

Up-to-date information on blazes happening the Kamloops Wildfire Centre

Okanagan Wildfires: The latest on wildfires and evacuations

A Friday morning look at the major wildfires impact the Okanagan and Similkameen.

Summerland Stomp cancelled

Wildfires in area lead to cancellation of event at Summerland Rodeo Grounds

Site C dam project plagued by problems: expert

E. Harvey Elwin expresses concern about internal BC Hydro and government documents

Tigers complete series sweep

Vernon grounds Kamloops 12-9 for Thompson Okanagan Junior Lacrosse League playoff title

Five small fires burn east of Oliver

At least one of the fires is suspected of being human caused

Seal attacks kayakers in the Broughton Archipelago

“It has to be one chance in a million of this happening.”

Victoria-area park sign removed after glitch redirects to porn site

Resident looking to learn more about workout equipment discovered the problem code

Five fires continue to burn near Keremeos

There are five fires in high elevation burning near Keremeos

Special Olympic athletes take on BC Games during special anniversary

Known as the Global Day of Inclusion, July 20 marks the first Special Olympics in 1968 in Chicago

Most Read