Mortgage Questions

I have included a video that I think makes a very strong point. When you are dealing with a financial institution ask questions about the products you plan on using and get the answers in writing.  This is applicable to all products but I will concentrate on mortgages.

When you are first buying a home it is very exciting and very stressful. You will deal with your mortgage rep and lawyer and you will likely run into things that you don’t quite understand. Ensure that you ask questions and have things explained to you until you do understand. Some common questions would be:

• Is the mortgage portable and assumable?
• What are the exact prepayment privileges?  When can prepayments be made and how much?
• Can the mortgage contract be broken without selling the property?
• What is the penalty if the mortgage contract is broken and how is it calculated?
• Can you increase the payment amount and the payment frequency?
• If you are in a variable rate mortgage and want to lock in, what fixed rate do you receive?  Posted less a certain percentage, or is it negotiated?
• If I take a cash back mortgage does the penalty increase and by how much?
• If you accept mortgage life and disability insurance can it be canceled at any time?

Ensure that you ask questions as not asking may cost you in the long run.  Be wary of mortgages with very low rates.  Many are “Value” or “No Frills” mortgages which offer little or no prepayments and you may not be able to break the mortgage contract unless you sell your property.  These mortgages can be very restrictive.

I am still working on my ebook, The Mortgage Reduction Guide which will be a little more specific with some questions that may end up saving you hundreds, or thousands of dollars on your mortgage.  Make sure you ask for ask for a real pony or be left disappointed and possibly with less cash in your pocket!  I love that commercial.