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PORT PERRY STAR - Tuesday, May 18, 1993 - 35 Talk to your banker and to understand your mortgage It has often been said that buying a house is the largest in- vestment most Canadians will ever make. For first time home buyers a mortgage is usually re- quired. Although there are a lot of special offers made by lend- ers when shopping for a mort- gage, the buyer should keep the rate uppermost in his mind. For example, a mortgage of $100,000, amortized over 25 years at nine per cent carries for $827.98 a month; at 8-3/4 per cent the same mortgage carries for $811.61. Although the differ- ence of $16.37 monthly does not appear like a large sum, over a five year termit totals a savings of $982. Another area of confusion is the ability to repay weekly and bi-weekly. It is generally as- sumed that paying more fre- quently than monthly will re- duce the total period of the mortgage by several years. This is only true if the weekly and bi- weekly payments are accelerat- ed, resulting in the mortgagee - paying the equivalent of an'ad-+~ - + ditional monthly payment an- : nually. If the payments are not "HO accelerated, the mortgagee is in fact not significantly reducing the total amortization period of his loan, but rather simply mak- ing his payments more fre- quently. If the client wishes to pay only monthly, but still enjoy the benefit of paying his mort- gage off faster, he should dis- cuss a shorter amortization pe- riod with his lender. This can result in the same benefit as an accelerated payment arrange- ment. Before buying your first house, talk to your banker to find out the maximum mort- gage for which you qualify. Most banks will pre-approve you. This way you can comforta- bly go looking for a house know- ing what price range you can af- ford. Your banker can also walk you through the process of mort- . gage approval in order that when you do find the house of your choice, the financing will be quick. Courtesy, . Laurentian Bank, : Will Davidson LJ WWE SHRUNK THE MORTGAGE" Pay it down faster with our new J year protected variable rate morigage. Limited Time Only. AA i Bank of Montreal Port Perry Plaza, 68 Scugog Street, Port Perry 985-8446 How to save money with variable mortgage There was a time when inter- est rates were fairly easy to pre- dict. These days even a crystal ball might not help. One expert is predicting that there is still room for rates to drop. Another one thinks that they ould sky- rocket any day. I do know that whether you are comtemplating buying your first home, or are about to renew your present mortgage, it does pay to shop around. There are some good options to consider that can help you cope with the uncer- tainties. A unique option offered by some financial institutions is a protected variable rate mort- gage. "Variable" means that the interest rate charged on your mortgage can change, usually monthly, to correspond with the changes in the money market. "Protected" means that the mortgage also has a guaranteed ~ maximum interest rate that is locked in for five years. You could say it's a chance to have the best of both worlds! On the one hand, you have the security of knowing that your mortgage rate will never exceed a prede- termined rate and on the other hand, in a period of lower rates you also have the advantage of having your interest calculated on the variable rate. The vari- able interest rate on this typed of mortgage 'iis' usually one per: centage above the prevailing prime rate. So, if prime is six percent, the rate charged for that month would be seven per cent. So, how does this affect your payments? Your payments are based on the financial institu- tion's five year fixed mortgage rate, (for example, 8.95 per cent), and will be the same for the duration of the term. The in- terest you are paying is calcu- lated once a month at the cur- rent rate, (for example seven per cent). The saving comes about this way: the difference between the actual mortgage payments and the interest at the variable rate, (that differ- ence being 1.965 per cent in this case), is applied to your princi- pal each month. All mortgage holders that I know, want to pay EMMERSON 193 QUEEN ST., PORT PERRY,.ONT. LIL 189 (416) 985-7306 ALL LINES OF GENERAL INSURANCE JR] NATIONAL TRUST - A Division of National Victoria and Grey Trustco 9.2" 1 YEAR ANNUAL INTEREST 7.0% - 5 Year Annual Rates Subject to Change without Notice. VG off their mortgage as quickly as possible. On a go 0a qu mort- gage, amortized over 25 years, ig could save as much as 11,000 over a five year period. In fact, instead of the original 25 years, your mortgage would be paid off in 17 or 18 years by takin advantage of a protected variable rate mortgage. Most of us have neither the time, nor the nerves, to monitor the rise and fall of interest ra tes rates. So, if you are looking for security and peace of mind, into a protected variable look mortgage. Shop around, ask questions, because features vary in different financial insti- - tutions. Make sure you find the lan that meets your comfort fever. After all, it 18 5 yonr mort- gage! .. . Courtesy, Bank of Montreal, Al Knight Forder-Parks Insurance Brokers Inc. Porsonal attention ts all of your general insinance needs. © 34 Water St, Port Petry, Ontario LOL 1J2 985-8471 FACT: Most consumers utilize the services. Jor their Insurance, Investment and Real Estate Needs. Doesn't it seem wise to use a REPUTABLE MORT GAGE. BROKER when you require a mortgage? ~~ of a Broker) By representing you, PMB is your link to the marke! las ¢ forthe LOWEST POSSIBLE RATES made available through¥arious types: of Ontario Financial Institutions. The most common misconception of a Mortgage Broker is that our profession is considered to be a lender of last resort -- ~ This] is not true in our case! PMB #1 Priority is Sali Securing Your Best Interest! client! 'We specialize in in 'mortgages - 'and onl If we can't save you money, than we don't deserve you - our mortgages. wih on | emphasis 'placed on CLIENT CARE. Within our Tele atmosphere, or the 'comforts of your home or office, we will ensure you understand the wide range of mortgage produgts: avsiable and: together select one that's right for you! : . Another common misconception is the broker's Fes. : PMB' Institution philosophy is to eam' our Fee from the Lending our Client! . Not With today's technologies, PMB is kept informed with uptorthe- minute rate changes and new product announcements; PVB? When your reduire a mortgage doesn't it make. sone tg-call : Thank you for the opportunity and privilege to be of service to you! Brenda Harrison & Ken Rein hardt IT PAYS TO SHOP & COMPARE... For Fame -- By years 8. 50° 10 years -- 9.48% 25 years -- 9, 85% PAL! Casimir Biyset PORT PERRY 1 985-1789 KLE 4029 REDUCE *REUSE RECYCLE - - preor © a. A 2 wy - ER sh ME dh mE a. SEE aaa aan EE EE a aa Sea Sa SEEN ae ge JR sea aa ee Naa a EEE ME ge SEE EEE SEE SE a oa aaa aa La SE a ca a a. al ah Baa a aE AE EEE AEE SEE EE ma A em a aaa me a i EB OA al cam al came Arak 2vEE aR alk AS AEE SH eal El CM ON a . ae aaa am. Saabh SEE aEEE aE SEE Sa a al Sal ae Sn oa an aa i A Bl at a a am aah aa ANG EEE sha