H ob : | = | i. - | ; { : ' LER CETTE OL hats Pa EY Pee: _ vice-president, . Real BUYING A house; whether it’s your first or your 21st, is a big step, and, for most people, the old saying is true — it is stiil one of the biggest investments made by an in- dividual. With all the concerns about the house itself — is it the right size? Conveniently located? How’s the plumb- _ing? and so forth — recent history has taught homebuyers to be particular- ly aware of one other crit- ically important element of buying a house. Mortgages. More specifically, mortgage inter- - est rates. Those three little words are capable of striking fear in the inner heart of even the most experienced homebuyer. . Interest rates today are the lowest in over five years. “The current low rates mean that more families who are renting can afford to buy,’’ said Robert Keller, senior ‘lending at National Trust. “Consumers are more confident now that mortgage ‘rates have stabilized at cur- "+ rent low levels,”” he added. Keller points out however, it is important for homebuyers to realize that a ' mortgage is quite simply, a ‘loan. It is a special kind of loan, which uses real estate, © in the form of your family ‘home, as security, and which can usually be. paid back over a longer period of time. “All borrowers, including mortgage borrowers, must realize that the rate they pay for their loan is related to the rate which the lender, whether it’s National Trust or anyone else, has to pay someone else, for the use of those funds,’’ said Keller. “‘People have to be realistic and balance their legitimate apprehension about mor- tgage rates with the other factors which have equal weight in a decision as im- portant as home and shelter for you and your family,’ said Keller. - tance of understanding all the elements of purchasing a- house to avoid an over em- phasis on the mortgage rates, which like other loan rates, are set by market forces. National Trust, like most lenders, counsels’ their customers to approach such a major purchase as a house from the proper perspective. “Too many people fail to take the time to sit down and figure out the single most important clement in financ- ing their home. That is, to determine how much you ‘can afford to pay, on a regu- | lar basis, based on your family income, to. own that home,” said Keller. . Committing any more than 30 ‘per cent of BTOSS - family income to owning a home including payments of interest, principal and realty taxes, could place a family in Lenders stress the impor-- financial jeopardy. Costs associated with home ownership such as heat, hydro and taxes to name a few are usually higher than the new home- owner, flushed with the joy of finding the perfect house, initially anticipates. This is why the 30 per cent ceiling is important. To illustrate, assume a family income of $2,000 per month, including a spouse’s income, if applicable. That . would mean. a maximum house servicing cost for that family of $600 per month. If realty taxes average $1,200 per year ($100 per month) that leaves $500 per month available to cover mortgage interest and principal. If mortgages are available, at 12 per cent for example, that family could afford a $48,000 mortgage (slightly more if rates are 11 per cent). To determine the house price range that such a family can consider, they add the amount available for a down payment (usually 25 per cent of the total price). _ A $16,000 downpayment will allow the family to pur- chase a $64,000 home for example, and siill live within ‘ reason. of course interest rates, as everyone well- knows,: do vary — and the length of time a lender will allow a - borrower to “‘lock-in’’ at a certain rate also varies. BOB SMITH PAULA OFF: & BRADNER 925-1111 43 - Friday, April 17, 1987 - North Shore News BUILDING YOUR OWN HOME? \yronderfu a 8 beautiful lots for sale " Magnificent — views a Fully serviced _a Priced from $125,000 — _ PHASE IT “Take Caulfield /Woodgreen Exit off | Upper Levels—follaw Westport Road turn right on Westwood Drive. For detailed information and site plan call Brent Francis or Bob Smith- Sutton Group-West Coast Realty = 925-101, - ADEVELOPMENT BY =~ Brririsn Pacietc PROPERTIES . IMITED At this unique North Vancouver Waterfront location. SOMETHING SPECIA EXTRA LARGE CORNER SUITS. 2040 SQ. FT.! Rarely do you find such space in a con- do matched with such a spectacular city and harbour view. 2 bdrms and den. Immaculate condition. REDUCED ‘to $338, 000. FABULOUS WESTHILL VIEW! | NEW HOME — 5000 SO. FT.- QUALITY! QUALITY! . Only the best is going into the con- 2 struction of this incredible family. home. 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