** This is part three of a longer story, if you want to understand what’s going on I recommend starting with PART ONE (which is packed full of intensely awesome action), but if understanding isn’t a priority… by all means… read on!**

Two days had passed. We had gone from normal breakfast at home over coffee and listings… to Sunday morning breakfast with our mortgage agent.

We met with her because I had a lot of questions about mortgages (as a general rule… I have a lot of questions about everything… apparently I’m an ‘over thinker’).

So over coffee with the scent of bacon in the air she laid it all out.

Mulling over Mortgages

A mortgage term (in Canada) is usually 5 years, and because rates are so dang low she was setting us up with a fixed rate for that term (actually for rentals a fixed rate was our only option). That means that even if interest rates go up, our rate stays cosy and the same. We also elected for a longer amortization period, and just a monthly payment.

For those of you who haven’t gone through a mortgage saga the word amortization may seem scary and unnatural… and it is. But it’s basically just talking about how you’re stretching out the payment of your loan over lots of years (usually 25 years, divided into 5, 5 year periods), and making regular payments on it. One way to lower the whole cost of your mortgage is to shorten the ‘amortization period’ because the longer the period, the more interest you end up paying.

As for payments, there are lots of ways you can pay back your mortgage. One way to speed up the process is to increase the frequency of payments. So you could do weekly, bi-weekly, monthly or even accelerated plans … which I won’t get into but can get you ahead even faster (#talktoanexpert).

The reason we were thinking monthly and a longer A-period (not official R-state lingo) were to keep the monthly payments as low as possible to be able to offer competitive rent, and to have monthly payments so that the payment of rent lined up with when the mortgage was due. It also makes sense, since our freelancer income is so variable, to keep the mandatory costs as low as possible and just save as much as possible when there’s extra money coming in.

Figuring out which option you like really depends on what kind of person you are (#talktoanexpert). A higher mortgage payment can be a good forced savings technique, but Mimi and I are both pretty good at saving on our own, so the plan would then be to use all of the many other prepayment options in order to chip away at our loan instead. Seriously there are so many:

NOTE: options vary from lender to lender depending on your situation. But these were some of the options that we had with our current lender.

• We could pay a big lump sum at the end of the term (in 5 years)
• We could double up on any monthly payment
• We could also pay off up to 15% of the principal every year

Every mortgage is different, but there are tons of options to choose from.

Why we love our mortgage agent

It didn’t take long to realize that I would never want to go through this without Marcia (mortgage agent), and I say that as someone who really likes mucking around in the financial world. But mortgages are crazy yo! And more than being someone who has incredible patience with a barrage of questions, she also instantly inspires the confidence that she is ON IT.

Oh… and she’s also an artist. Did I not mention that? One who has made it her business to specifically help artists navigate this tricky world of lending.

She has worked her tail off for us (as you’ll continue to see over the next few chapters) with a can-do spirit that is pretty dang impressive.

She also has been with people through a mortgage story or two… so when we said things like…

“There are no other offers on the table right now, so we’re not really in a rush deciding.”

…she could remind us how quickly that could change in a way that didn’t feel like she was piling on the pressure, but instead reminded us that at some point… we needed to actually make a decision.

One, two, three… JUMP

There’s a point in every big decision when you just have to do it. There are always risks, there are always excuses that can be made.

But as much as this condo thing came out of nowhere we didn’t feel like we were reacting on a whim. That’s mainly because we had been having a lot of conversations over the past few months about our long term financial goals (#dirtytalk). We were trying to come up with strategies that a couple of freelance artists could use to build up capital, but also assets that produce income. Things like… rental properties (but also fun things like dividends, and bonds!! So many things to talk about!).

So after the numbers were crunched, the financing explored, experts consulted it was time to …. Jump.

We called our real estate agent and asked if we could put in an offer.

MACE

Man… legal documents need a lot of signatures. Which isn’t the most fun, BUT we made an amazing discovery. By the 30^th time we put our initials in the same box we realized that they spelled MA CE or MACE. Which is pretty badass…

So guys… there are bright sides to every situation.

But right… the offer…

The offer is a tricky thing. You want to get the best deal possible, but you also don’t want to insult the seller with a crazy low ball offer and have them respond with an equally insane high counter. My theory is, at the end of the day it’s your job to figure out what price you’re willing/able to pay. If you get it for the price that you’re happy paying, who cares if they would have taken less. It can drive you crazy trying to get the ‘best’ deal… and it may not really be worth the stress.

So we talked to our agent and figured out a fair offer, one that was serious but also allowed us to be within a range we were comfortable with.

As we signed the last paper the clock started ticking. 24 hours. That’s how long the seller had to give us an answer (answers include: saying absolutely nothing).

We had achieved an adult milestone.

It felt weird… so we went out for chocolate milk, bought a bunch of candy and pulled an all nighter (actually went out for fancy pizza, had half a beer and fell asleep by 10).

Now we wait….

Next time on The Mortgage Files: A love of my life lets me down when it matters most, as the 24 hour clock ticks down. Don’t miss: 24 HOURS

***Just for the record let me make clear that this is a story of OUR experiences with ONE MORTGAGE SITUATION. If there’s anything that I’ve learned about this crazy world is that every person and property brings up a whole new set of circumstances. If you have questions talk to a broker (I know a great one). ***