LENDERS know the rules on
mortgage lending.

Thev should a owas thes ther weore
therm. Tots ampontiave thar ver asa ber
rower earn them and know bow te nee
tite vour own rules. Mortgage fending has
changed drantanealh : Spat we
decades This now aver competes busi
ness and these changes are
more i vour tiveur, “Phe
followme are a few of the
more Basic aspects of
Inortwage dending that
Vou TMUSt, repeat, must
know.

B Amertization Period ---

This is the period of time

it takes to reure a debt

throug: a series of consis:

tempt periodic payments.

‘The longer the amortiza-

tien period the less cach periodic payment
will be. The shorter the amortization peri-
od the quicker vou will fully retire the
debt.

& Mortgage ‘Term -— A contractual time
period at the end of which the outstanding
balanee is due and payable. Not to be con-
tused with the “amortization period”. At
the end of a mortgage term (6 months, |,
2, 3, 4.5 years) the outstanding mortgage
balance is duc. Usually the lender will
undertake a new mortgage teeny at that
time with a different: set of contractual
terms, such as a different interest rate

Tip: When negotiating, your morigage
term, try ta tie its renewal to the 3 or 4
monihs before 4 United States Presidential
election when rates are typically low tor
political reasons. No, we are nor
Americans, yet we are tied clasely to what
goes on south of the 49th. The odds are
thar Canadian rates will also be stable and
as low as possible to mirror their American
counterpart.

@ tnterese Rate and Compounding
Frequency — All mortgages will have an
interest rate (rent paid for the use of the
borrowed money). Obviously, as the inter-
est rate increases so does the monthly pay-

ment required to service the repayment of

the mortgage. Compounding frequency is

the number ot times mnteress gs calouhated
per vear with thar imterest added to the
prior ourtandiig balanee Phe more com
pounding foper sear the higher the
anna ettecive unierest rare Papute vou
vnderstind the hanpaat
frequeney when shoppin

Uap sd
for a tory
A
ght toorepay the
prinuple durnig the tern oft
the mortgage An open
morteare aflows vou te
rep part er atbad the pram
aple dunag the term: of the
Meritage with no penal,
Usually vou will pavoa
Slightly higher moterest rate
for an open mortgage. The
question toaask is how open
Is pene:
@ fnsured Morty aes
Banks require mortgage
mnstiiraace in order to make loans when a
loan to value ratio cxceeds 75%. The
Borrower pays a fee, usually a percentage
of the mortgave amount that increases as
the Joan to value ratio increases. “Phis insur-
ance does not cover the Borrower. ‘This
insurance covers any loss the Lender may
suffer if the Bocrower fails to make pay-
ments with the Borrower paving the fee
(nice if we could get dife to be that way).
The fee tor insured mortgages ranges up to
3.73%. Most people just add this cost te
the mortgave and thas OK as an investor
bur asa homeowner it makes cconentic
sense to pay cash or take a 3 year personal
toan to pay this iee up-front. A $3,000 fee
that is tacked on to a 25 year amortized
mortgage at 7% will require repayment of
$6,303.00 whereas a personal loan at 8%
over 36 months will only require repay-
ment of $3,780.00, The term commonly
ssed te describe this type of foan is “high
ratio” insured loans. CMHC is the nermat
institution that provides Lenders with this
insurance.
@ Mortgage Fees —- There are numerous
tees thar the Lender will charge vou for in
advancing a mortgage to vou. These
include appraisal fees, application: tees, a

See Buy-downs page 85

Friday. Octoner 9 '498

Masako’s moniker

HEF pick for the name of a new development at Furry Creek,“Oliver’s Landing,” entitled
Masako Bellwood to a $5,000 shopping spree at Park Royal. She celebrated her purchas-
es — aVCR and a izip for two to Cozumel — with United Properties’ vice president Terry
Forbes and husband David Bellwood. See story, p2ge 57.

sia

Nortt: Shore

News - 47

Feature Listing

ate seinas oe :
AY A GLANCE ...

ADDRESS: 4654 Keith Road

Sameer ererenscaneesesveseovecns

LOT SIZE: 130W x 163D

PeeeePeeer rere eee rrr rire rer erie rr iit iii

INTERIOR SIZE: 2150 SQ. FT.

DOPE Ove mew EEE EEOC EOE OR REOD ERODE DOORS

NUMBER OF BEDROOMS: 4

Peeves er ece es eanessenseeesesesennerenureee

NUMBER OF FLOORS: 3

Preece re encscc en reenerseseeaeresresenerreoes

ASKING PRICE: $649,000

Preerererr ree Pe Per rscir rrr ee

OPEN HOUSE: Saturday 2 - 4:30pm

PreveRTeCe Tre ee Peererir ets

LISTING AGENT: Craig Tomlinson
Angell Hasman & Assoc.

PO TPTUTIVICE PEELE ee eee

SPECIAL FEATURES: Sunny & bright thru-out
with established mature garden.

NEWS photo Mike Wakefield

4654 Keith Road

nN

Rare Opportunity in Caulfeild

Fabulous split-level home converientiy located only 1/2
block from Caulfeild Elementary School and minutes to
the shopping centre. Tastefully decorated and recently

updated, this 2150 sq. ft, 4 bedroora
and 3 bathroom home is quiet, sunny
and totally secure. The fully fenced
flat yard is a child's wonderland and
a gardener's paradise as it's gates
enclose one of the
established gardens in Caulfeild.
Don't miss this unique opportunity.
Cail for your private viewing.

premier }

an

Craig Tomlinson

Angeli Hasman & Associates Realty Lid.

760-2587