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Home Banking

A Better Way to Bank...

Home Buyer's and Borrowing Tips

Home Buyer's Tips

It Pays to Shop Around

Now that you are in the market for a mortgage, shop around. Lenders have diversified their mortgage options extensively and you may be surprised by the variety of alternatives that are available. It pays to shop around … you could save yourself valuable dollars.

Effects of Weekly Payments

Making weekly payments could save you a great deal of money and cut off years off the life of your mortgage. Be sure to check with your financial institution about what payment options are available to you and what effect these options will have before you make a decision on your mortgage.

Prepayments

Making lump sum payments at least once per year or on a more regular basis could save you valuable dollars and reduce the life of your mortgage. This of course depends on the prepayment amount and on the terms of your mortgage. Some mortgage agreements allow you to prepay all or a portion of the mortgage before the end of the term or before the loan matures. Very often, a prepayment penalty applies to compensate the lender for loss of interest expected on the original life of the loan. When you negotiate your mortgage, be sure to ask whether a penalty will apply.

Interest Rates

Comparing interest rates is fairly simple. Provided the conditions are the same, a 71/2 % 5-year mortgage is obviously cheaper than a 73/4% 5-year mortgage. But be sure to check the basis of the calculations. While most financial institutions calculate interest on a semi-annual compounding basis, there are a few institutions that also calculate mortgage interest using monthly compounding. Mortgage interest calculated on a monthly compounding basis will cost you more in the long run than mortgage interest calculated on a semi-annual compounding basis.

Borrowing Tips

Before you visit a financial institution to inquire about obtaining a loan, first make a thorough assessment of your current financial situation. Determine in advance how much money you will need to borrow, how much you can afford to pay (link to the calculator how much can I afford) each month and your spending plan.

To save you time, print off this worksheet, fill it out and take it to your financial institution when applying for a loan.

Assets:
Cash on hand	$
Savings	$
Investments	$
Cash value of life insurance	$
Home	$
Other property	$
Vehicle(s)	$
Business or farm assets(if any)	$
Personal effects	$
Other	$
TOTAL ASSETS	$


Liabilities:
	Payment Amount Frequency
Person loans(balance owing)	$
Credit cards(balance owing)	$
Charge accounts(balance owing)	$
Home mortgage (balance owing)	$
Unpaid bills	$
Business or farm liabilities (if any)	$
Other	$
TOTAL LIABILITIES	$

Your net worth
(Assets minus liabilities) TOTAL ASSETS	$
TOTAL LIABILITIES	$
NET WORTH	$