Friday, May 21, 1999 - North Shore News ~ 51

lorigage renewal strategy importani

FOR many people, the
most important finan-
cial decisions they will
make this year will
involve their mortgage
— either for the pur-
chase of a new home or
for the renewal of a
current mortgage.

The wrong decision on a
mortgage can cost the bor-
rower hundreds, if nor thou-
sands, of dollars. Despite this,
some people spend more
time planning their shopping
to save a few dollars on gro-
ceries than they do planning
their mortgage strategy.
Remember, when you are
negotiating 4 mortgage vou
are going up against the Big
Bad Banks (BBBs). You can
be assured that they will be
prepared,so vou had better be
too, otherwise they'll proba-
bly get the better of you.

The first thing you should
check out are the current
interest rate offerings. There
are various Internet sites,
such as <www.canadamort-
gage. come, where you can
get the latest rates. Current
rates are also printed periodi-
cally in the business or real
estate sections of the newspa-
pers.

It is important to check
around because there are a
number of lenders that are
offering discount rates. For
example the Vancouver-based
Citizens Bank of Canada was
recently offering one vear and
five year rates of 5.75% and
6.15% as compared to 6.30%
and 6.95% trom the BRBs.
You may or may not want to
go with one of the discount
mortgage lenders but veu can
still use their offered rates as
ammunition in negotiations
with your bank.

In fact, when you are
negotiadng with vour lender
for a new or renewed mort-
gage the best strategy is to
have another offer in hand.

home
economics

Therefore you may want to
talk to another mortgage

yours. Depending
on how well you negotiate
and how much your bank
wants vour business, vou
should be able to get up to
1% off the posted rate, which
of course will save vou
31,0004 year on a $100,000
mortgage. In addition, vou
should be able to negotiate
the waiving of any renewal
fees on your mortgage.

The other issue that
should be clear in your mind
when you go into the bank is
the term vou want for the
mortgage. Sonte lenders will
try to get you to take a
longer term mortgage, telling
vou that it is for your own
good as it gives vou security

against interest rate increases, +

Well, the fact is that the
BBRs don’t rack up billions
of dollars in profits every year
by doing what's good for
you.

They make those kind of
profits by doing what's good
for thent and it ts good for
them to have vou docked in as
a customer for a longer peri-
od of time.

While the longer term
mortgage does otter the secu-
rity of knowing what youll
will be paying for a longer
period of time, it does have
disadvantages. One disadvan-
rage is that if you have.to ter-
minate the mortgage before
the term is up you'll probably
have to pay your BBB a three
month interest penalty, You
don't want this to happen

tos Julie Iverson

because three months inierest
can run into the thousands of”
dollars and believe me, vou
need the money mere than
they de (sce billions of dol-
lars of profits above ).

The other disadvantage is
that vou will be paying a
higher rate for the longer
term mortgage. On May 1
the posted five vear mortgage
rate was 6.95% as compared
to 6.30% for the one vear
rate, So if rates go down or

stay the same over the five
vears vou would clearly be
better off having taken five
one -vear terms rather than a
five vear term.

How much better off
sould vou be if rates staved
at 6.30% for the tive vears?
Well in order to compare the
two stritegi¢s, bet’s assume
that vou used the money you
saved from the lower manth-
Iv payments with the one year
terms to pay down your

Mortgage principal cach
month, Ifyou did this ana
$100,000 mortgage, atthe
end of the five vears you
would have an outstanding
mortuage balance of

This compares toa bal-
ance of S90.987 that you
would owe if vou had taken
the five vear mortyaye, So
vou are better off by an
amount of $3,528 tor taking
the one year terms instead of

the five year term. OF course
if interest rates fell during the
five vear period vou would be
ahead by even more,

But what trates go up?
Well if the one vear rates go
up aby small amount bur still
stav below the five year rare
of 6.95%, vou are obviously
better off with the one year
terms because you are always
paying a lower interest rate.

See Shorter page 9

Watch out

RESIDENTS of Blueridge and Seymeur Heights recently got 2 new sign to let criminals know that it’s tough
to get away with crime in their neighkcurhood. North Van District Mayor Don Bell (left to right), residents
Shirley Lees, Don Lees, Eric Anderson and Const. Mark Brown were on hard to see the new sign in place.

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ADDRESS: 3420 Mathers

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LOT SIZE: 100° x 180"

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INTERIOR SIZE: 5,100 sq. ft.

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NUMBER OF BEDROOMS: 4+ den

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NUMBER OF FLOORS: 2

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ASKING PRICE: $869,000

OPEN HOUSE: Sunday 2 - 4pm
LISTING AGENT: Don Eilers & Lauren Kent,
889-9449

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SPECIAL FEATURES: Unusual privacy ina
convenient location.

NEWS photo Paul McGrath

AT PREIS EDP TETNA ST SPI STEN SETTERS CMO TMS NTT PAR A AAS

Feature Listing
3420 Mathers

Stunning 180° view

Staggering close in 180-degree views from every room
in the house. This four bedroom and den home was
thoughtfully designed for the family who enjoys space
to move around in and loves to entertain. The kitchen
with granite countertops and bathroom with radiant
heat have recently been updated as well. The oversized
.39 acre lot offers privacy surrounding the swimming
pools and decks with
ample room for kids to
play. This is the best
value in the Westmount
area with schools and
shopping nearby.

Don Eilers & Lauren Kent

Re/Max Masters Realty