Ask Bob: I’ve found my house and I need to get a mortgage. What should I know about getting it?

Buying or selling a home involves a lot of things, it also raises questions. In this column ‘Ask Bob’, real estate expert/broker Bob Bartikoski of RE/MAX Paradise Homes Bonaire answers a real estate question from a reader. This time:

Question: I’ve found my house and I need to borrow part of the purchase price, so I need to get a mortgage. What should I know about getting a mortgage?

When you apply for a mortgage keep in mind that just like any business transaction, the terms are negotiable between you and the bank. There are a few loan terms that are often negotiable depending on the bank.

• The amount of the loan – I usually recommend borrowing as much as you can, as long as you can afford the payments. If you have extra cash keep it in your pockets in case of an emergency
• The length of the loan until its paid off. – Usually mortgages can be from as short as 10 years or up to 30 years. The shorter your mortgage is, the higher the payments will be, but you will pay less interest over the term of the loan. Keep in mind that local banks will only allow amortize your mortgage until you turn 65, so if you are 50 years old, that means the maximum term of your mortgage loan will be 15 years.
• Believe it or not, the interest rate for your mortgage is often negotiable. At the moment mortgage interest range between 5% and 6%, depending on your income, your financial status, the amount of your downpayment and if you are a Bonaire resident or not. It never hurts to apply at least two different banks in order to get them to compete for your business so you get the lowest possible rate.
• The bank will normally try to charge you a “loan origination fee” that is normally around 1% of the loan amount. You should look at this as mortgage interest that you are having to pay at the start of the loan, before you even get to use the banks money. This fee too, is negotiable.

Do you want to buy or sell a house in Bonaire, or do have a real estate question for Bob? email him at: [email protected]. Call for free from the US: 1-866-611-7362 or Bonaire: +599-717-7362. See all our listings here.