Mortgage Tips

Now that you know all the things you can accomplish with a mortgage, it is time to examine the best tips to get you there once you have it as one of your goals this year.

Consider all of the costs

Sit down and work out your budget before applying for a mortgage. You will need to be sure you can borrow enough to cover the purchase of the property and that you will have enough to cover all of the associated costs and fees. Make sure you have enough cash on hand for the following:6870884823_96247bde94_o

  • Down payment (on a mortgage loan it’s 10% of the purchase price that’s required)
  • Property inspection
  • Closing costs (including property appraisal, legal fees and settlement fees, home-owners insurance and property taxes, loan fees)
  • New appliances and furniture for your new house as well as lawn and garden equipment
  • Home improvement projects.

Consider your credit history

Your credit history is very important to lenders as this is one of the criteria they will base their approval upon. Try to get a copy of your credit report from TransUnion so you will have an idea of your credit position and take steps to improve if need be.

Don’t hide any information

Help your lender by providing them with as much information as possible upfront, even if you think it may hurt you. Your lender is there to help you obtain that mortgage and it’s much easier to find a solution upfront rather than during the final approval when the clock is ticking!

Deposit all income

If you receive dividends, rent or you’re self-employed, we urge you to deposit all earnings into an account as this assists in validating income.

Make more frequent payments

Under a fortnightly payment plan, a home-owner can save thousands in interest. With fortnightly payments you basically pay one additional instalment every year (26 fortnight payments = 13 months). As interest is amortized monthly the additional payments every year will effectively reduce the amount of interest you pay over the term.

Want to know more about our mortgages? For all things mortgage, visit


What a mortgage can do for you…

First off, let’s define the meaning of the word mortgage. A mortgage is simply an agreement between a financial institution and a borrower where the financial institution  lends money to the borrower against the value of  a specified property which is used as collateral/security for the loan. You can apply for mortgage financing for any of the following:

Buying a Home/ Buying Landmortgage_house

Some people choose the option of buying a home, or they may buy land in hopes of building on it at a later time. Here at First Citizens, first time home owners can benefit from significant cost savings to make home ownership affordable.

Building a home

If you already own land or you are thinking of buying land with the intention to build your own home, you will require Bridging Finance.

Bridging Finance is a special type of financing, ensuring that funds are made available in a timely manner during the construction phase. Once the dwelling has been completed, you will need to submit a completion certificate along with an updated valuation report so that the bridging financing can be converted to a long term mortgage loan.

How does this work?

Funds are released in draw downs, based on site visits conducted by the bank officer and the submission of quantity surveyors’ reports which highlight the progress of construction.

Interest is charged by the Bank only on the funds actually utilized during construction. Principal repayment is not required during the bridging phase.

The building must be constructed in accordance with approved building plans.

Home equity mortgage

If you already own your home, it is important to note that you can take advantage of the equity in your property to finance another goal.

This equity can be accessed to fund renovations, consolidate debts, expand your investment portfolio, purchase another property, go on vacation, pay off medical bills or finance tertiary expenses for your children.

Here’s an example:

If the present market value of your property is $1,000,000 and the present balance on the mortgage is $300,000 then the equity in the property can be calculated as follows:

Market Value – $1 million

Bank’s maximum lending value – 75% of $1,000,000 = $750,000

First Mortgage balance – $300,000

Then equity in the property – $750,000 – $300,000 = $450,000

Switch mortgage for cost savings:

A switch mortgage is a legal transfer of the mortgage on a property from one financial institution to another. If you currently have a mortgage at another financial institution, you can “switch” your mortgage to benefit from significant savings as most times the switch mortgage is done at a lower rate.

As you can see in the examples above, there are many things you can get accomplished with a mortgage. You can also take a mortgage for business purposes which we would explore in an upcoming post. If you are interested in a First Citizens mortgage you can always contact our experts at: or visit any one of our conveniently located branches.