Mortgage Terms

After some browsing on the market you will likely find some homes of interest to you and you will need to know what is within your financial comfort level. I recommend speaking to a mortgage professional to help you examine your choices. There are mortgage calculators on the internet, and PCS can help, though there is a lot more to a mortgage than just the rate.

Here is an information sheet that looks at the basic qualifying information.

As well as examining how much debt you want to take on, getting pre-approved before actively looking is always a good idea. You don't have to use the full amount the bank is willing to lend you, consider your other financial needs and leave some room for the unexpected.

Here are some of the more common mortgage terms and considerations:

Sunsets over winter forest with Coastal Mountain Range and Georgia Strait in the background.

Sunset settles over the forest with the BC Coast Range and Georgia Strait in the background.

  • Principle is the amount borrowed for the mortgage and interest is the interest charged on the principle.
  • Amortization period, which can be up to 25 years, is the length of time it will take to pay the mortgage off. This time period, along with the interest rate, is used to calculate the monthly payments. The shorter the amortization period, the faster the mortgage is paid off, and the less interest will be paid, but the payments will be larger.
  • Term is the length of time for the current mortgage, most often 5 years, at which time you will need to renew the mortgage. Periods of one to five years, and sometimes longer, are possible.
  • Fixed rates set the interest rate so they won't change for the term of the mortgage. This allows certainty for what your payments will be and help with budgeting and peace of mind.
  • Variable rates vary according to the interest rates and can increase or decrease and tend to be lower than fixed rates. Mortgage rates have been moving up a little over the last year, though are still low. See Market Update for the latest forecast.
  • Payments are usually a blend of interest and payment on the principle (mortgage amount).
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  • Payment schedules are generally monthly or bi-weekly, and sometimes weekly.
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  • Payment flexibility is important. Mortgages often allow extra payments, or up to a certain amount that can be made on an annual basis. These payments go directly to the principle, thereby speeding up how fast the mortgage is paid off, and decreasing the amount of interest paid.
  • Prepayment penalties can apply if you pay your mortgage out early, usually because of selling your home. Often it is equivalent to three months interest, but other factors can apply. It is important to identify what this penalty is for the mortgage you are looking at.
  • Rate is the interest rate the mortgage charges, and it varies by the type of mortgage and the lender. While this is a critical factor, other factors, such as flexibility and penalties, also need to be considered when choosing a mortgage. It pays to shop around.
  • Mortgage insurance provides the lender with insurance in the case the mortgage is not repaid, and this helps buyers secure a mortgage with less than a 20% down payment.
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  • Title insurance is insurance to ensure that the buyer obtains lawful title to the property purchased, and is obtained through a lawyer or notary. Usually it is the bank that requires it. With the Torrens land registration system and the indefeasibly principle it is very unlikely that an issue will arise (see Title on the Home Ownership page).

The mortgage contract is a legal document that has a number of terms, such as requiring you to pay property taxes, insure and maintain your home, and it gives the bank the right to foreclose, to name a few. Rates, policies and practices of lenders can be different and can change over time. It is important to have a qualified mortgage profession help you through this step.

     About Gerry                                         Service and Integrity Above All

Information and Interpretation
Selling or buying real estate is a major financial endeavour with many factors to consider. While you have a wealth of information available to you on the internet, interpreting that information is another matter.

This is where I come in. Not only do I research and provide you the information you need, I take it to the next level and analyze and interpret that  information for you. I will tell you what I think, what we do is up to you.

As a client, your Realtor works for you, and this is a principle I hold dear.  I see my job as providing you with information, interpretation, services and guidance, not to push you on a course of action.

Unparalleled Service
I have a simple code, I don't sell, I service. I assume my clients are perfectly able to make their own decision once they have the information they need. I spend my time providing information, guiding people through the process, and making sure all the bases are covered, not in high pressure sales.

Over the years I have received very complementary feedback from clients. See Client Feedback.

Integrity, simply defined, is being honest and fair. This is further enhanced by one of a Realtor's prime duties, which is not to put anyone's interest above their clients, including their own.  This a duty I take very seriously. My personal outlook after over 30 years in business, is that whenever I experience high pressure sales I start to question the integrity of the person selling me.  Are they looking after my best interest or theirs?

The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. The trademarks REALTOR®, REALTORS® Realtor and the REALTOR® logo are controlled by CREA and identify real estate professionals who are members of CREA.

Blue illustration of Gerry Chwelos, Realtor, Pemberton Holmes.

Gerry Chwelos, REALTOR®


Tel: 250-8975465

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Copyright © Gerry Chwelos 2017