MORTGAGES: Homework most essential when mortgage-shopping

Continued low interest rates, and quickly rising home prices, are helping encourage those who have been on the fence about buying their first home go ahead and take the plunge.

But according to a TD Canada Trust poll of female homeowners, there are a number of things that they wish they'd known before they bought -- for example, 25 per cent said they'd wished they'd researched their mortgage options better.

"Whether you choose a variable-rate or a long-term fixed-interest-rate mortgage will depend on your comfort with interest-rate fluctuation and your ability to carry a higher mortgage payment if interest rates rise," says Chris Wisniewski, the bank's group product manager for real-estate secured lending.

"As anticipation about rising interest rates grows, more women may be interested in exploring longer-term fixed-interest rate mortgages. Either way, it's important to consider all options early because once you put in an offer, things will move very quickly."

Another 10 per cent of the women would have considered making a larger downpayment. Wisniewski points out that the bigger the downpayment, the less the homeowner has to pay over time.

"Think of it as short-term pain for long-term gain," says Wisniewski. She also recommends a shorter amortization period, which will reduce the amount of interest paid. "On a $200,000 mortgage, switching from a 35-year amortization period to a 25-year period could save you $170 per month and could take 10 years off your mortgage."

Closing costs were an area where the women polled said they were surprised by the amount they paid out.

Wisniewski says home buyers should estimate closing costs --which can include legal fees and disbursements, property land transfer taxes, adjustments for prepaid property taxes or condominium home expenses, among other things -- at about 1.5 to four per cent of the cost of the home.

The cost of maintaining the home once you've bought it rarely figures into your calculations about whether you can afford to buy it. Thirty per cent of the women polled said they wished they'd considered how much they'd have to pay out annually in maintenance expenses, things like electrical bills, heating, property taxes and insurance.

And in order to make sure you're not hit with too many surprise expenses in the short term, first-time buyers are advised to book a home inspection before they sign the deed. Inspectors will let buyers know about any structural problems and provide an assessment of the overall state of the house. Forty-three per cent of respondents to the poll said the biggest headache they faced was paying for unforeseen maintenance and repairs.

The third annual TD Canada Trust Women and Home Ownership Poll, conducted by Angus Reid, surveyed women 18 years of age and older from across the country. The sample size includes 1,003 women who had purchased a home independently. No margin of error was given.

(Source: Vancouver Province)