Lintott Law
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Real estate transactions: The basics of mortgages

When an Alberta couple decides to buy their first house, they may have many concerns and questions. Although they will likely use a realtor to search for their perfect home, they'll also need a savvy real estate attorney. It also helps to gain an understanding of mortgage financing options as they are typically an integral part of many real estate transactions

A mortgage is a property loan that can be obtained from a bank, mortgage company, insurance company, loan company or credit union. Mortgage brokers often act as go-between between the lender and the borrower, pledging to arrange the best possible loan from one of many lenders. The goal is to secure a mortgage for the borrower at the lowest possible interest rate.

The interest the buyer will have to pay for the loan is a crucial component of a mortgage. The mortgage payment will depend on the amount that is borrowed, called the principal, and the interest rate attached to it. The amortisation period is the length of time it will take to pay back the loan, and an amortisation schedule will show the total payments (including interest) paid over the life of the loan. Understandably, a higher downpayment means a lower loan amount and less interest paid.

Real estate transactions can be complicated with many hidden challenges that may catch first-time homebuyers unaware. However, with an experienced Alberta real estate lawyer in their corner, these issues can be anticipated. A lawyer can assess the circumstances and needs of the buyers and assist with the intricacies of obtaining a mortgage while ensuring all documents comply with legal requirements before they are signed.

Source:, "How a mortgage works", Accessed on June 16, 2017

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