If you are buying a house and need a mortgage--shop around!  Banks are very competitive now and will actually reduce their rates a bit if you ask them or tell them that you are checking around.

Once you have the mortgage in place, you will need a lawyer to finalize the deal.  

 

Mortgages:

1.  Fixed rate -- the bank will set a term of 5 years (for qualifying purposes) and an amortization of 25 years.  You can negotiate a different term and amortization period.  Obviously the lower the amortization period, the higher the payments.  In any event, a fixed rate gives you the satisfaction of knowing that your payments are going to stay exactly the same, for at least the first 5 years.

2.  Variable rate -- the bank will lend at the rate of something like 1% above prime.  This can sound wonderful, but be careful because if rates go up, so does your payments!  However, the banks do allow you to change it to a fixed rate mortgage if it looks like rates are going to skyrocket.

3.  Credit line mortgages -- these are now more popular as one can access any equity when ever you wish.  For example, if the value of your property and or your home is $400,000 and you have borrowed $300,000 on your credit line already, you do have access to the other $100,000.  The only problem is, if one is not careful with their withdrawals, the balance can quickly grow, which defeats the purpose of paying off one's house!

 

Payment options:

1.  Monthly -- is the standard payment choice (12 payments a year).  Its easy and simple but you pay for the entire 25 years and save no money on interest.

2.  Bi-monthly -- this is twice a month, usually on the 15th and 30th of every month (24 payments a year).  Basically you divide your monthly payment into two installments and it does save you some of the costs on interest.

3.  Bi-weekly -- this means every second Friday (or whichever date you choose) and you make 26 payments a year.  You save much more on your interest cost and payout the mortgage much earlier.

4.  Weekly -- this is the best and you pay a payment once a week (52 payments a year).  You save a ton in interest and pay off your mortgage about 7 years early!   It's not as scarey as it sounds because you take the monthly mortgage payment x 12 then divide by 52.  You just start paying earlier and make about 2 extra mortgage payments a year.  It is well worth it in the long run!