s e v e n i s a j o u r n e y

So, with an offer on a house accepted we have begun the dance of finding a mortgage. Having done this once before in the states it is not a completely new process, but there are some interesting differences here. First, the term is normally 25 years, not 30. No big deal. But where in the states a fixed term for the full 30 years is the common standard, it is not so here. The longest fixed term you can get is only 5 years, and you get nailed with significantly higher rates the longer your term. (The bank is taking a risk with rates rising.) It is also perfectly fine to split up your loan however you want between the floating portion and various fixed terms (6 months, 1,2,3,4, or 5 years). And the floating portion changes whenever the central bank changes its rates, not once a year with a limit on %change like we are used to). Interest rates (as set by the central bank) are higher here, but at least the bank rates only seem to be 1.5-2 % above the central bank rate, as oppsed to 2-3% above in the states. At least, that is my impression. With the short terms you essentially get to refinance your loan for free every couple of years, which can be good or bad. Bad if rates go up and suddenly you are payng much more. Good as you reduce the principle on the loan with each refinance cycle the debt load (and thus payments given the same interest) should drop.

The other fascinating thing is that there seems to be some actual competition for our business. There are 5 or 6 major lenders (the big banks), and about 15-20 little boutique lenders. They all have little sweeteners from free checking, to a few hundred dollars to pay closing costs, to a fee-free checking account, to no-fee credit cards. Right now we are weighing the various rates and free-bees to see which deal is best for us! If it comes down to a tie between a few lenders, then the one with the easiest application form wins! :)

Two months until settlement, the greatest challenge will be not going stir-crazy in the apartment knowing a cool house is awaiting us!

This weekend we plan to do some research on the cost of making modifications/improvements to the house (adding a garbage disposal, replacing the hot-water heater, replacing the planking and railing on the north deck, adding a sliding glass door or two, putting in a brick patio, puting solar hotwater panels on the roof, putting in a little fish pond for Azami’s pleasure). If we can afford it, we would love to make some of these changes before we move in, since it is always easier to get work done when the place is not full of stuff. Working out costs and priorities is key. There is also the simple matter that if we don’t get it done now, a few years may pass before we realize it, like how it took us 2 years to get new windows put into the back porch at 26 Locust.