The devil is in five of the details

I have something shocking to tell you. Mortgage brokers are human. Gasp! But wait, so are lawyers, lenders, legal assistants and everyone else who is involved with your mortgage transaction.

Why do I choose to draw attention to this and ruin your day, you ask? It is so you will have a checklist of the things to confirm after the mortgage transaction closes so you are not gobsmacked down the road by a nasty surprise.

1. Property taxes – even if you are certain that you indicated your preference to the mortgage specialist and the lawyer and anyone else who would listen, you really should take a minute to confirm just who is paying them. If you have changed from the TIPPS program to the having the lender collect them on your behalf then you may be facing a tax shortfall at the end of the year which will now require you to double on the tax portion of the payment to make up the difference.

2. Payment frequency – there is a misconception that choosing the biweekly or weekly frequency will pay your mortgage down faster and this very untrue. If your goal is to pay your mortgage down quickly you must choose the accelerated option for either to get the benefit.

Let’s go over the numbers real quick. Based on a $300,000 mortgage at 25 years and a rate of 2.49%.

Monthly $1,970.74 25 years to repay

Biweekly $619.23 25 years

Biweekly accelerated $671.20 22.4 years

Weekly $309.54 25 years

Weekly accelerated $335.60 22.4 years

As you can see the accelerated payments are higher which means more money goes directly to the balance of the mortgage. The benefit of the weekly or biweekly non-accelerated is mainly that it would line up with your pay schedule for the payments.

3. Mailing address – if you live in one of the smaller areas and your mailing address is different than your home address you should make sure your lender knows so that you will receive your annual statement and other communication.

4. Phone number – again, make sure the lender has your new number if you have moved to a new community.

5. Online Mortgage Systems – most lenders now have an online system where you can opt to make extra payments or just check your balance. Something kind of nice about managing your mortgage on a Saturday in your PJs while sipping your coffee.

All of the above can be handled in one phone call. That’s right. One! Call your lender a week or two after your mortgage closes to allow their system to register your new mortgage.

Some lenders send a nice welcome letter after funding which will outline all of the above in which case all you have to do is take a minute to review. Have a great week my friends.

Pam Pikkert is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.

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