Shopping for a mortgage

Buying a home not only involves an emotional experience, but it can also involve a financial experience. There are many financial aspects to consider. Your home buying experience can be made much smoother when you understand the mortgage process and some basic mortgage terms. Here's a guide to help you through the mortgage process.

Q: What is a mortgage?
A: A mortgage is a financial commitment you make to a lending instuition. It consists of:
" principal: the repayment of the orginal amount  borrowed on a monthly basis
" interest: the cost of borrowing the principal amount, repaid on a monthly basis
" taxes: real estate taxes paid to city or municipality
" insurance: homeowners insurance on the home. Also any mortgage insurance, which is paid to protect the mortgage company.
The total of these four items is known as the PITI (principal/interest/taxes/insurance)

Q: What kinds of mortgages are available?
A: Open, fixed, variable. A fixed term (for example, 10 or 20 years) as well as a fixed interest rate. The interest rate and term are fixed at the start of the mortgage. The monthly amount for the payment of principal and interest will not change during the term of the mortgage.

With an open mortgage, the interest rate will be adjusted up or down when the mortgage is renewed. The monthly amount for the principal and interest payment will go up or down when the mortgage is renewed.

Q: How much down payment do I need?
A: Down payments range from a minimum 5% down, to 60%, 70% or even more.

However, you can become a homeowner, even if you don't have a large down payment put aside. With as little as 5% down, Carl can assist you with completing an application for mortgage financing available through Canada Mortgage and Housing.

Over the phone or in person? Carl will review the entire process with you.


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Carl Bretzlaff, RE/MAX Real Estate (Edmonton North Branch)
#102 12650 - 151 Avenue NW, Edmonton, Alberta T5X 0A1
Tel: (780)457-3777 Fax: (780)457-2194
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