Page 24 - Real Estate Now-Mar/Apr 2022

A Review of Mortgage Terms

Mario Toneguzzi courtesy of REALTOR.ca
or first-time homebuyers, navigating the mortgage world can be
quite overwhelming. There are a lot of different terms, concepts
Fand options that can be confusing for anyone embarking on the
journey of homeownership. Russell Anderson, District Vice President of
the Calgary Central District with TD Bank, advises people to do their
homework.

“It’s always great to read a little bit before you head in to talk to
anybody. First and foremost, if you’re a first-time homebuyer,
you need to go in and speak to somebody face-to-face and ask
your questions,” says Anderson.
How much are you able to afford? What sort of benefits are you
looking for? What do you want to achieve in the end? Based on your needs, your bank can provide different options,
he says. Anderson recommends people do their homework early before they start house hunting.
“Go in and ask early. Even if you think you’re a couple of years away from buying a house, it doesn’t matter,” he says.
“You don’t want to wait until the moment you think you’re ready.”

Pichu Kalyniuk, Account Manager with Canada Mortgage and Housing Corporation, says many first-time buyers are
doing a lot of research online and through social media.

“At the end of the day, however, you do need to speak to somebody. You need to speak to a trusted mortgage
professional who can guide you through the ins and outs of a mortgage,” says Kalyniuk.
Trying to understand all of the mortgage jargon can be a challenge. Here’s a breakdown of a few common terms and
concepts.

The basics:
Mortgage
A loan secured by real estate/property that you pay off over time. You’ll be paying back the money you borrowed to
your lender (with interest) and eventually, you’ll be mortgage free!
Getting pre-approved for a mortgage should be a first step when looking for a home to buy. Pre-approval means that
a lender has qualified you for a loan based on your current income and credit history. A pre-approval usually specifies
a term, mortgage amount and guaranteed interest rate for the next three months – even if mortgage rates go up
while you’re house hunting.
Down payment
The amount of money you put towards the price of a home. Whatever you don’t put down is the amount you are
borrowing.
Amortization period

The total number of years it takes to pay off your mortgage loan completely. You choose the number of years when
you apply for a mortgage loan. Most first-time buyers pick the longest amortization period available. If your down
payment is less than 20%, your maximum amortization period is 25 years. If your down payment is greater than 20%,
you could have an amortization period of up to 30 years.

24 | REAL ESTATE NOW | denise@BCislandhomes.ca