Arrange your Mortgage – Get Pre Approved

December 28, 2007 · Filed Under First Time Buyers and Mortgages 

Buying your first home? Second? Looking for an investment property in the St. John’s Real Estate market? The first step in buying real estate is obtaining a pre-approved mortgage.

The St. John’s real estate market is booming! Having your pre-approval in place will certainly work in YOUR favor.

A pre-approved mortgage is a mortgage for a set maximum amount and interest rate that is arranged by a lender (ie bank) prior to the purchaser finding a house.

With a pre-approved mortgage you will:

  • Know how much you can afford and what your payments will be
  • Lock in your interest rate at today’s rate (or lower if rates drop), usually guaranteed for 90 – 120 days
  • Demonstrate that you are a serious buyer, which can help in your negotiations with sellers and their agents

The key to choosing a mortgage is to know your options. The more you know, the more likely you’ll save money now and in the future. There are numerous types of mortgage options available, fixed rate, open rate, variable rate – they can even blend 2 different types to sort your needs.Payments can be set up on a monthly, bi-monthly, bi-weekly and even weekly basis. As well, you get to choose the date of the month to make the payment. By changing from monthly to a bi-weekly payments, a typical 25 year mortgage can be reduced to 21 years. Thats a LOT of interest saved.

A great way to save on interest costs and reduce the life of your mortgage is by making annual principal payments. $2000 extra a year on a 25 year mortgage will reduced the amortization period to 15 years.

There are lots of mortgage calculators on the internet. Play around with them. Try different scenarios.

Jeff Burton with RBC is a great resource when it comes to mortgages. Speak with your mortgage specialist today and determine the right options for you.

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Comments

2 Responses to “Arrange your Mortgage – Get Pre Approved”

  1. Bill on February 5th, 2008 4:20 pm

    Good advice, but find a good mortgage broker. Mortgage people that work directly FOR a bank can’t be truly objective. You could be short changing yourself out of thousands more.

  2. Stephen Winters on February 5th, 2008 4:42 pm

    I know of a few mortgage brokers that are not “truly objective” as well. Can you explain what you mean by “truly objective”?
    I have seen clients go to a bank and in the end obtain a mortgage through a broker. I have also seen clients start with a mortgage broker and end up with a bank. I guess it depends on the complete package for some people. The mortgage rate, products offered and great service. Personally I highly recommend seeing at least 2 mortgage specialists, broker and banker, and making the decision from there.

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