Obtaining a mortgage is one of the most important decisions you may ever make, and with so many choices and ongoing decisions; the right advice can have a huge financial impact.

Things to Consider When Building a Brand New Home

If you decide to build a brand new home instead of purchasing a re-sale, it is extremely important to carefully assess the following pros and cons before purchasing:

Pros

• You are the first occupant meaning no one else has lived in the home
• You get to decorate as you wish by selecting your colors, design features, and other various upgrades
• You are protected from construction deficiencies by Provincial Law

Cons

• The area is not established and is often still under construction causing excess traffic, noise, dust, etc.
• Landscaping, driveway paving, and other finishing touches might take extended periods of time to have completed due to other construction in the area
• The timely completion and occupancy of your new home can be delayed for any number of builder related reasons
• There are some closing costs that apply to new homes

What is an assumable mortgage?

An assumable mortgage is one in which a qualified buyer can take over the mortgage from the current owner on the property being purchased. Assuming a mortgage requires a simple amendment to the mortgage document registered on title. This type of mortgage can offer the qualified buyer with a better than market interest rate in some cases and also cut legal costs associated with obtaining a brand new mortgage.

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Learn to Save $40,000 - Biweekly!

Most mortgage payments are made on a monthly basis. However, arranging to make accelerated biweekly mortgage payments can have a dramatic effect on the amount of money you have to pay and the time frame before it is all paid off.

Under a biweekly mortgage, instead of making the payments once a month, you make half the payment every two weeks. If your mortgage is $1,000 per month, under a biweekly system it would be $500 every two weeks.

You make 26 payments per year, which is the equivalent of 13 monthly payments rather than 12. The extra payment is than taken directly off the principal, reducing the payment schedule accordingly.

The effect of accelerated biweekly mortgage payments can be dramatic. For example, if you currently have a $150,000 mortgage loan at 7.5 percent fixed interest, you will have paid approximately $330,000 at the end of 25 years. That's a $180,000 in interest!

However, if you use a biweekly payment system, you will pay $290,000 and have it completely paid off in just over 20 years. You save a staggering $40,000 and you pay the loan off nearly 5 years earlier!

An increasing number of mortgage companies are now offering a biweekly payment option. It is even possible to convert your current monthly payments into a biweekly schedule.

Be wary of independent companies offering to do this for you for a fee -- you can do it for yourself by simply phoning your lender or contacting Alberta Equity Mortgages

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Beware of Online Applications

When applying for a mortgage online, make sure application form is secure. A secure form encrypts the data you send to the mortgage broker greatly reducing unauthorized access to your personal information. To tell if the web site you are at is secure; look for a little yellow lock on the bottom status bar of your web browser. By double clicking on it, it will bring up additional information about the security of the site.

Also, make sure that the broker you send your information to has privacy policies in place. Some third party companies are just out to collect your information to sell it banks and other brokers.

The website should have visible contact information, such as phone numbers, addresses, and emails. It should be at least affiliated with the BBB and the Canadian Institute of Mortgage Brokers and Lenders (CIMBL). Most importantly, make sure that it is a Canadian website.