We all know that interest rates are at a historical low...don't we? If you are buying a home in Vancouver you would be mad not to take out a mortgage now as the interest rates are shockingly low in the history of Vancouver Real Estate! So what are the factors to look out for in a mortgage?

Prepayment:

1. With a prepayment privilage you can make your payments towards the principle portion of the loan over and above your monthly payments.

1. Closed Mortgages have a different type of pre-payment option. The amount you can pre-pay becomes important if you get bonus payments (like we Realtors dget with what is left over that your real estate brokerage has not taken off you), an inheritance, or a windfall like winning the lottery! 
2. An open mortgage means you can pay off the entire pricipal sum without notice. This is a great option if you are self employed or get regular bonus payments...like bankers used to get!

Portability:

Can  you transfer the balanace of your current mortgage to your new home? 

Expandability:

1. Can you increase the prinipal amount in the future? Say you want to buy another larger home...?
2. If so, what will happen to your interest rate?

There are two rate structures to choose from:

1. A fixed rate mortgage : this will remain the same rate for the length of time you have negotiated, your term. You can choose an open or closed mortgage but this depends on the term.
2. A variable rate mortgage: this fluctuates with the current market rates. Your monthly payments will usually remain constant (usually for a year or a couple of years) but the amount allocated to your principal will vary. If the interest rates go down then this may be a good option. If the interest rates go up then you may want to convert your mortgage to a fixed rate mortgage.

Choose from Three Payment Types:

1. Payment option 1: Open Mortgage offers a huge amount of flexibility, as it can be repaid in part of full at any time without penalty.
2. Payment option 2: the closed Mortgage where interest rates are fixed for the full term of the mortgage and you will have to pay a penalty to break or change the agreement conditions.
3. Payment option 3: The convertible mortgage has the flexibility to convert to a longer closed mortgage at any time without payment.

There you go, these are the other considerations when getting a mortgage. If you need a Realtor to find you a Vancouver house or a condo in Vancouver then I would be delighted to help you. Please call Russell Sharp on 604 437 4277 at any time.