MORTGAGE: How to get the best mortgage - hot tips for buyers

Valerie Rasmussen, assistant vice-president, credit services, for First Calgary Savings, offers the following advice to home buyers.

Q What are your top tips for people thinking of getting a mortgage and buying a house/condo today?

A Buying your first home can be an overwhelming and daunting process. Getting the right information before you begin can alleviate stress and increase confidence as you go through the process.

Here are some tips:

- Evaluate your financial situation. Understand your current credit history, and your monthly debt obligations. This will help you plan a budget with realistic expectations and a comfortable mortgage payment that you can live with.

- Get pre-approved. Let the personal banking representative do all the work for you and don't hesitate to ask questions.

- Educating yourself on the variety of mortgage loan options and how the application and approval process works can equip you with the knowledge you need to chose the right product.

- Get all your figures and approvals in order before you get to far into the buying process. Then you can be sure to be looking at homes within your means of affordability.

- With your figures in mind, don't push your finances to the max of your ability to pay, this could become overwhelming later. Everyone has heard the term, "house poor." This can be avoided with the right planning and information prior to choosing your home.

- Wait until the time is right for you. If you plan to live in the home, you do not need to look at a home as a speculator or investor would. Market predictions can be wrong and should not prevent you from purchasing your first home. However, once you have reviewed your budget, and perhaps met with a personal banker, you may make the decision that, for example, one more year of saving could get you a better down payment and lower mortgage payments. Do what will work for you.

Q What is the biggest mistake homebuyers can make in relation to getting a mortgage?

A Borrowing too much can be the biggest mistake new home buyers can make. Many people will hear that they are approved up to a maximum limit of X dollars and immediately begin looking for the maximum priced homes they can afford. First-time homebuyers need to understand just how expensive home ownership can be -- and many bills and fees are not planned for. There are lawyers fees (closing costs), insurance set up, utilities, taxes and moving costs, and for condos, such things as condo fees and so on. Adhering to a realistic budget can help new home buyers avoid the stress of being overextended.

(prepared by Barbara Livingstone/Province)