Buying a condominium (home) usually requires taking out a mortgage. That means that you borrow the money to buy the condo, using the condo as collateral for the loan.

You want to be sure that you end up with a mortgage that you can live with. There are tons of options available to you that let you customize your mortgage to suit your financial needs, wants and goals.

MORTGAGE BASICS

Mortgage payments are made up of a principal sum (the amount borrowed) and interest (the cost of borrowing the money).

The optimum plan for any type of mortgage is to minimize the amount of interest you end up paying. Lenders offer options to you on how to achieve this: a larger down payment means that your home ultimately costs less because a smaller mortgage means less interest. A shorter amortization, the period over which the loan will be repaid. A weekly or bi-weekly payment schedule, instead of monthly. Additional lump sum payments.

Prepayment

Make sure that you have some form of prepayment clause in your mortgage that allows you to pay down your mortgage with a lump sum or an extra payment without penalty.

Portability

Portability means that you can transfer the terms and conditions of your mortgage to your next home. For example, this may allow you to keep a low interest rate if you sell one condo and buy another.

Assumability

Assumability means that you may be able to assume (take over) the existing mortgage on the property. There may be attractive features attached to it, such as a lower interest rate than the prevailing one in the market.

An assumable mortgage may be a selling feature for you when you are selling.

Expandability

This lets you expand the principal on a first mortgage at the lender’s agreed-upon rate of interest. This may be a cost-effective way to underwrite a renovation or upgrade to your condo.

TYPES OF MORTGAGE

Conventional Mortgage

A conventional mortgage is for an amount which does not exceed 75% of either the appraised value of the property or the purchaser price, whichever is less. Your down payment is a minimum 25% of the purchase price.

High-ratio Mortgage

With a high-ratio mortgage, you contribute less than 25% of the cost of the condo as a down payment and your down payment may be as little at 5%.

A high-ratio mortgage requires mortgage loan insurance which have premiums between 0.5% and 3.75% of the mortgage amount (additional charges may apply).

This premium can be added to your mortgage payments or paid in full on closing.

Second Mortgage

This is usually a higher interest rate and shorter amortization than a first mortgage. Secondary financing is usually used to make renovations to a condo.

Foyer

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type:__________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Special Feature: ________________________


Living Room:

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Special Feature: ________________________

Dining Room:

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Special Feature: ________________________


Den, Study, Family Room, Solarium

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Special Feature: ________________________


Kitchen

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Cupboards/storage fair __ good __ excellent __

Number of Appliances _____

Special Feature: ________________________


Master Bedroom

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Ensuite Bath: yes __ no __

Walk in closet: yes __ no __

Special Feature: ________________________


Bedroom # 2

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Ensuite Bath: yes __ no __

Walk in closet: yes __ no __

Special Feature: ________________________


Bedroom # 3

Approx. size ___________________________

Walls : fair __ good __ excellent __

Flooring: type: _________________________

fair __ good __ excellent __

Light Fixture: yes __ no __

Windows: fair __ good __ excellent __

Ensuite Bath: yes __ no __

Walk in closet: yes __ no __

Special Feature: ________________________


Bathrooms:

#1 Tub __ shower __ sink __ toilet __

#2 Tub __ shower __ sink __ toilet __

#3 Tub __ shower __ sink __ toilet __

#4 Tub __ shower __ sink __ toilet __

Special Features: _______________________

____________________________________

Parking: Owned ___ Exclusive Use ___ # __

Underground __ Above ground __

Balcony: yes __ no ___

Locker: yes __ no ___

Party Room: yes __ no __

Swimming Pool: yes __ no __ indoor __ outdoor __

Squash: yes __ no __ Tennis: yes __ no __

Sauna: yes __ no __ Exercise/gym yes __ no __

Other: __________________________________

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Concierge: 24 hour yes __ no __ Executive ______