Canada’s mortgage market has changed a lot in the past few years and will no doubt continue to change even more in the years to come. Not surprisingly, home financing options and qualification rules have also changed. As a result, homeowners now have access to a vast array of specialized mortgage products.
Our expertise is shopping for all of these products and providing you with the best possible solution based on your specific needs. We understand the Canadian mortgage market and have the knowledge and expertise to make sure you get the best offer, every time.
Frequently Asked Questions
What is a Mortgage Broker Agent?
A mortgage broker agent is an independent professional that will work with multiple lenders to find you a mortgage that will suit your needs. They will find a lender with the best rates and terms for your situation. There is usually no fee to work with a mortgage broker if you qualify under standard lending guidelines. Your mortgage professional gets paid a commission or finders fee from the lender. If there is a fee, this will be disclosed and documented up front.
Why use a Mortgage Broker
Mortgage planners, aka mortgage broker, are independent, trained professionals licensed to represent and provide you with the best advice for your mortgage needs.
A mortgage broker’s primary expertise is locating funding for mortgage financing. They know where the best rates can be found. What’s more, they have the knowledge and experience required to present a proposal for financing to a lender in the best way possible ensuring optimal results.
Intermediaries
Mortgage Brokers are not employees of a lending institution, therefore brokers are not limited in the product they can offer you. Brokers seek out the best lender package to suit your specific situation, whether it’s with a Chartered Bank, Trust or Insurance Company, or even from Private Funds.
There is a wide assortment of options and features available to home buyers today. Shopping around takes a lot of time and effort. The mortgage application process in today’s very competitive marketplace intimidates many Canadian home buyers. It pays to work with a mortgage professional that will represent you and ensure the mortgage you get is the one best suited to your needs.
Choosing the wrong mortgage can cost you thousands of extra dollars. Mortgage brokers are trained professionals who can help you save thousands by choosing the right mortgage.
Expertise
Mortgage brokers negotiate for a living and understand the mortgage market in fine detail. The interest rate alone makes up a very small part of the total contract and there are many other considerations to be mindful of when organizing your mortgage. A broker has the expertise to know which lender to place your mortgage with and how to ensure your terms and conditions are optimal. It has been said that in Canada there are two types of buyers. Educated buyers and victims. Don’t be a victim; deal with a mortgage professional and get the right advice up front!
Superior Rates
Mortgage brokers are in daily contact with lenders and know which applicants and property types attract favorable interest rates from one institution, but higher rates at another. Some lending institutions, in fact, will only accept mortgage submissions from mortgage brokers directly.
Interest rates and lender appetites for certain types of loans can change daily depending on several economic factors. The size of an institution’s portfolio in a particular type of mortgage, for example, can change their willingness to lower rates and attract new business. Your mortgage broker keeps current and knows which lender to approach first. As a result, mortgage rates obtained by brokers are the best available at the time of placement.
What are costs of obtaining a mortgage?
Some of the costs associated with obtaining a mortgage are legal fees, appraisal, home inspection, and utility hook-ups. We usually recommend that you have approximately $2,500 set aside to complete your property purchase.
What is the difference between insured and conventional mortgages?
Your mortgage is insured when you have less than 20% to put as a down-payment on your purchase. By law, banks cannot lend more than 80% of the value of the home unless it is insured by CMHC (Canada Mortgage and Housing Corporation), Genworth, or Canada Guaranty. These insurers protect the lender against default. An insurance premium is charged and is added to your mortgage amount. A conventional mortgage is when you have 20% or more to put as a down-payment on your purchase. In most cases, there is no insurance premium charged. Occasionally, the lender may still need/want to have the mortgage insured through CMHC, Genworth, or Canada Guaranty depending on the location of the property or type of property being purchased.
What are the costs of the CMHC, Genworth, or Canada Guaranty Premiums?
The amount that would be added to your mortgage will depend on the amount you have put as a down payment. The premium is a percentage of the mortgage amount. You can visit our Mortgage Qualifier calculator to see the current premiums and run your own scenario.
Your amortization is how long your payments are spread out. You can amortize your mortgage all the way up to 30 years, and even to 35 years with some lenders.
Why is getting a pre-approved mortgage so important?
Getting a mortgage pre-approval is important for many reasons. It is important to know what purchase price you are qualified for before you go home shopping, this will ensure you are looking in the right price range. You need to ensure that you can comfortably afford not only your mortgage payments but all of the other costs of owning a home, such as property taxes and utility bills. If you have not owned a home before, these amounts may be a bit surprising. Your mortgage professional will help you take a look at the entire picture. You need to ensure that you will qualify for a mortgage based on the lender’s criteria. If there are issues, it is better to discover them at the pre-approval stage so that you and your mortgage professional can work on fixing those issues prior to your search for a home. If you are not able to qualify for a mortgage at this time, we can assist you in taking the steps necessary to qualify for a mortgage in the future.
Once I am pre-approved for a mortgage, I will have no problem obtaining a mortgage, right?
It is important to note that a pre-approval qualifies you as the applicant. Your mortgage professional will have confirmed your income, credit and down-payment at this stage. However, we are not able to pre-approve the property you will be purchasing. This is still subject to lender/insurer approval. Therefore, it is important that you always put a “subject to financing” condition on your offer to purchase. Your real estate agent will assist you in writing the offer to purchase. Also, a pre-approval is only valid if there is no material change in your financial situation and the supporting documentation matches what has been verbally communicated. If something has changed since you received your pre-approval (i.e. changed jobs, acquired new debt etc), please contact your mortgage professional so that they can review your file.
What happens when I find a home?
Once you find a home, you and your real estate agent will write an offer to purchase.
Once the negotiations have been completed, your real estate agent will forward a copy of the offer to purchase and property highlight sheet to your mortgage broker. They then submit the mortgage for final approval to the lender.
Once the lender/insurer approval has been obtained, the lender will send a mortgage commitment to your mortgage broker outlining the details of the approval along with any paperwork that may still be required. Your mortgage broker will then contact you to go over the approval and ask you for the paperwork required to complete the mortgage file.
Once the paperwork has been received and approved by the lender, your mortgage file will be complete and you can remove your “subject to financing” condition on your offer to purchase.
Once you have removed all of your other conditions, such as “subject to home inspection”, you have purchased your home! Your next step will be to go to your lawyer to sign the legal paperwork required in order to complete your purchase. You should expect to go to the lawyers approximately 10 days prior to the possession date. When you go to your lawyer, you will be expected to bring the remaining down-payment and monies to cover the closing costs. Closing costs can include property tax adjustments for the property, title insurance, legal fees and disbursements, among other things. These funds must be in the form of a certified cheque or bank draft.
Once you have completed the paperwork at the lawyers, you will then wait to take possession of your home on the possession date negotiated. On possession day your lawyer will receive the funds from your lender and they will send the funds over to the seller’s lawyer along with your remaining down payment and property tax adjustment.
Once these funds are with the seller’s lawyer, the seller will release keys to you. If you are using a real estate agent, the agent will get the keys from the seller or seller’s agent and will typically meet you at the new home. You will do a quick walk through with your real estate agent to ensure everything is as agreed and you can then start moving in.
Congratulations!
Can I still go through my bank with my broker?
Yes, letting a mortgage broker represent you to your own financial institution can often result in a better rate than you could get on your own.
How do Brokers get better deals than many banks?
The lenders who work with mortgage brokers include traditional sources such as chartered banks, trust companies, corporate funds and private pension funds.
Brokers and banks actually work together and the broker channel can be a very useful source for banks to lend their money. In addition, banks understand that brokers are shopping the entire market and know where to get the best rates. As a result, banks often allow brokers to lend their money at a lower rate than the bank will offer directly. Lending high volumes of money at lower rates is still very profitable for the banks.
For best results always call your Broker first.
Do Brokers only do Residential Mortgages?
Brokers can place all types of loans. This includes small loans registered on residential property to million dollar commercial loans registered on commercial property. Brokers deal with business loans, leasing loans, even collateral or vehicle loans. Contact us to discuss your plans as there may be many options available to you.