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ATT RACTIVE Fai far TO.
HIGH INTEREST RATES

By Peter Bakonyi
Royal Lepage

Although higher interest rates
can throw a bit of a scare into
consumers, potential home
buyers and sellers alike have a
variety of attractive alternaives
that can help to offset the impact
of mortage rate increases.

Many resale homes listed for
sale have mortgages that were
taken out when interest rates
were lower. In most cases, these
existing mortgayes can be
assumed by the purchaser.
Knowing that such mortgages
exist, more and more home
buyers are asking their real
estate salespeople to seek out
homes with financing available.

However, an existing
mortgage may not be large
enough and require a substantial
downpayment that a buyer can
ill afford. For just this reason,
vendor take-back mortgages (or
balance of sale mortgages) —
foans provided by the seller
below the interest rates offered
by financial institutions and
usually often more flexible
repayment terms — are
becoming increasingly poopular.

With both vendor take-back
(VTB) financing and low-rate,
existing mortgages available, a
horne buyer who shops for this
kind of financing may be able to
avoid higher interest rates.

Real estate salespeople
normally specify on the listing if
the vendor will assist in
financing. By arranging better
financing, you can effectively
tower the overall cost of
purchasing a property.

Also, a vendor take-bac!. loan
that is part of your c/fer is
accepted or rejected almost
immediately. The buyer usually

MARV GRAVES

PENNY GANDY

knows within hours, rather than
waiting weeks for a financial
institution to set the rate for a
conventional mortgage

VTBs with interest rates from
one to three percent below the
current market rates are
commonplace, and often vendor
mortgages include more liberal
tepayment terms with no
testriction about making extra
payments or paying off the
Mortgage early.

In addition, certain fees like
appraisals are reduced or
eliminated with VTBs, Similarly,
surveys or credit checks are not
always necessary. and monthly
payments can be structured so
they aren't too much of a burden
on the buyer.

if interest rates fall below the
rate of your vendor take back
mortgage. you have the option of
paying off the loan with a
conventional mortgage that
costs less.

Selling a VTB

However, a VTB mortgage
has certain implications that the
vendor should review carefully. If
you are selling your home with a
$20,000 vendor take-back loan
and plan to move into another
house, chances are you will have
to assume a larger mortgage on
your new property to cover the
$20,000 that is tied up in your
VTB

In addition, the interest on the
vendor take-back mortgage is
taxable, but the interest that you
pay om your new mortgage
(taken out only because he
couldn't get all cash for his
house) is not tax deductible. As
a result, the seller is in a double
jeopardy situation,

Another option is to sell the
VTB mortgage to a private

IVAR FOSSEN

SHIRLEY JOY

investor. a mortgage broker or a
Jayer at a discounted price.
However, you have to be
prepared to accept less than full
value for the mortgage. The
discount for selling the mortgage
can add up to several thousand
dollars, depending on the
amount of the mortgage and the
amount of the discount.
However, in some cases
accepting this discount is
worthwhile if the VTB mortgage
helps you to sell your home. If
you do plan to sell the VTB, you
can always hold firm to your
selling price to make up the
difference the discount
represents. Your real estate
sales representative can advise
you on the most appropriate
strategy to adopt.

RRSPs can help

If. as the vendor you have a
Registered Retirement Savings
Plan (RRSP} you may be in a
position to use a new financial
maneuver because KRSPs can
be used to invest in private
mortgages,

In this case, you simply
arrange for a self-directed RRSP
which lends the funds to the
purchaser of his house. On the
closing day, the purchaser would
return the money as part of the
purchase price.

As the vendor you end up with
cash for your house, with no tax
liability, no discounted
mortgage, and an RRSP that is
growing thanks to someone
else's payments.

Peter Bakonyi {5 the branch
manager of the Royal LePage
office at 1760 Marine Drive,
West Vancouver, B.C. For

more Information contact Peter
Bakonyi at 926-0611.

PAUL COLLINS ELLEN GREG MIKE MOLE DENISE EAVES

47 - Friday, March !4, 1986 - North Shore News

FOR HIKERS t CROSS COUNTRY SKIERS
5 cabins available in Diamond Head Park, on
Gov't. leased land. These cabins vary in price
from $25,000 to $45,000. For such a low price
you can have a retreat Y way between Van-
couver and Whistler, and be just 10 minutes from
Squamish. Calt

GABE PERRON 688-5917 or 898-3187.

SUPER DELUXE
Modular home in nicely treed park, with 3
bedrooms, 2 full bathrms., family rm. as wel! as
cosy living rm., 1440 sq.ft. Built-in china cabinet
in dining m., 3 appliances & drapes and
woodstove. Asking $31,000.
JOYCE CUNNINGHAM 688-5517 or
898-9386

OPEN HOUSE
MARCH 16/86, SUNDAY 2-4
38151 LOMBARDY DR., VALLEYCLIFFE
Follow the open house signs to this well kept 4
bedroom home. Price reduced to $67,CO0. For
more info call
BEV CROFT 688-5917 or 898-5313

MOVE IN RIGHT AWAY
2404 JONE AVE.
Super tocation — ideal family home — Why pay rent? This solidly built home provides excellent
value. Invest in your own future. 2 bedrooms up, 1 down with large family room.
RON MULLINS 980-8585 / 645-9132
SHIRLEY JOY 980-8585

WHYTECLIFF

Over % acre close to park, school and beaches.
3 bedrooms, 3 bathrooms and self contained in-

law accommodation.
MICHAEL MOLE 921.8226

EASY TO OWN APARTMENT
Ocean, city, min. view, redecorated 1
bdrm., new paint, wallpaper & carpets,
gas firepl., great $53,000 mige.
assume w/o qualification. Asking
$68,900. Try $3500 down, with BC.
Gov't. 2nd.

IVAR FOSSEN 926-0473

COTTONWOOD ISLAND
INDUSTRIAL CENTRE
Ideally suited for development of In-
dustrial and Container Port facilities,
with access to deep sea channel, road,
rail & power. Approximately 700 acres
developable — purchase all or pari

with option on remainder.
PENNY GANDY 921-7534

FISH ARE JUMPING
In the river at the rear of this 3 bedroom home.
Only $49,900. Try $5,000 down and pay less than
$500 per month. But hurry.
STAN BANNISTER 688-5917 or 898-5905

4 BEDROOM HOME
Newly renovated to show home condition, ask-
ing $61,500. New woodstove downstairs with
customized venting heats the whole house for
practically free. New paint and carpets give this
home a warm family feeling. Extra extra large
covered deck overlooks 120° yard. Call and ask
for
JUDE BANNISTER 688-5917 or 898-5528

INVESTORS!!

This cleared 3.714 acres of choice commercial

property at the entrance to Pemberton is suitable

for a shopping centre, hotel, or motel. it's only -
20 miles from the ski resort of Whistler and only

3 miles to the airport which serves the ski area.

The great need for reasonable priced housing

and rooms for Whistler workers makes this pro-

perty a great opportunity for a developer.

SMALL LOG CABIN

-On large secluded end lot. Asking $26,000. Call

HELEN MAGEE 688-5917 or 892-5901 #628

RON MULLINS BRAD BEETLES. “DON HOFFMAN

ENTRAL — ~ SPACIOUS — AF ROABLE!
307-555 WEST 28TH

Ideal for the young family or retirees. Large freshly redecorated 2 Gr ste., 4 appliances incl. large
pool, clubhouse. Handy to transpn., school, shopping. All this for only $65,300.

PAUL COLLINS 922-1619, 980-8585
BRAD BEETLES 980-8585

$109,000

wed Fe ead
16 GREAT NORGATE RANCHER
Nicely decorated 3 bdrm. home, laundry rm,
large kitchen & dining area, recent carpets, 5
near new appl's., ge. sundeck, separate
workshop & storage shed in fulty fenced sunny
backyard.

IVAR FOSSEN 926-0473

LUXURY CONDOMINIUM
WATERFRONT
9.5% FINANCING -
Mave in now! In-sulte laundry, 6 appliances, view.
Hurry, one only. Call
SHIRLEY JOY 980-8585

Se RE EE Rt a OME EE Te