Frequently Asked Questions
What is a Canada Mortgage Broker?
Canadian Mortgage brokers are independent, trained professionals licensed to represent and provide you with the best advice for your mortgage needs.
Mortgage brokers primary expertise is locating funding for mortgage financing. They know where the best rates can be found. What is more, they have the knowledge required to present a proposal for financing to lenders in the best way possible to successfully obtain mortgage financing.
Why deal with a mortgage broker in your area?
Mortgage brokers represent you, the customer, not the lender. Because they are not employees of a lending institution, 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 is with a Chartered Bank, Trust or Insurance Company, or Private Funds.
There is a wide assortment of options and features available to homebuyers today. Shopping around takes a lot of time and effort. The mortgage process within today,s marketplace is very competitive intimidates many Canadian homebuyers. 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 on your mortgage dollar.
Other than rates, why should I use a mortgage broker?
In addition to rates, because mortgage based financing is the brokers primary business, he or she has developed expertise in what type of mortgage financing each lender prefers to pursue. This kind of knowledge not only results in the most favourable rates for each project, but often whether a project is funded at all.
How do mortgage brokers find the best rates?
Interest rates are a concern to borrowers. Because of their daily contact with lenders, brokers know which project or home attracts a favourable interest rate from one institution, but a higher rate at another. Some institutions, in fact, will only accept mortgage submissions from mortgage brokers.
These rates, and preferences for types of mortgages, can change daily, depending on economic circumstances or based on the size of an institutions portfolio in a particular type of mortgage. Your mortgage broker keeps current and knows which lender to approach first. As a result, mortgage rates obtained by brokers are among the best available at the time of placement.
Why should I go to a Canada mortgage broker first?
A professional presentation to a lender on the first application will get the best response and save you valuable time and money. Secondary applications with previous credit bureau inquiries may be more costly.
Often the success of obtaining mortgage approval depends on the way a proposal is presented and to whom it is sent. Your mortgage broker is trained to present your mortgage proposal where and how it will get the most immediate, positive result.
You do not call an insurance company for insurance - you use an insurance broker, because of their expertise, product knowledge and rates. So remember, call your mortgage broker first!
Do Canada mortgage brokers only do residential mortgages?
Brokers can place all types of loans provided they are backed by mortgage collateral. This includes small loans backed by a residential property to million dollar commercial loans backed by commercial property. Mortgage-backed loans in the millions are not uncommon with private pension funds and private lenders.
In addition to handling straight mortgages, mortgage brokers are often called on to assemble financing ( based on mortgage collateral) for businesses. Mortgage brokers excel in this type of financing package because of their expertise in looking at loans from a mortgaging perspective, as well as their knowledge of financial institutions interests and desires for a particular product at specific times.
How do Canada mortgage brokers get better deals than many banks?
The lenders who work with mortgage brokers include traditional sources, such as chartered banks, trust companies, as well as corporate and private pension funds.
In addition to these sources, brokers often develop professional relationships with private sources of funds, termed private lenders. These lenders can provide many various mortgage products not available at conventional sources. For best results call your Broker first.
Can I still go through my bank with my mortgage broker?
Yes, letting a mortgage broker represent you to your own financial institution can often result in a better mortgage.
When should I obtain a mortgage pre-approval for an Canada mortgage?
You should obtain a mortgage pre-approval if you plan on buying in the near future in order to secure an interest rate guarantee from the lender.
The interest rate can usually be held for 120 to 180 days. A pre-approved mortgage in Canada is based on the information you provide to a Broker in your application and is subject to verification of conditions such as employment and down payment verification.
How much can I qualify for?
Qualifying guidelines vary depending on the lenders criteria and products available. To find out exactly what you can qualify for, please submit your request for a call back for a quick approval.
Can I use money gifted to me for a down payment?
Yes, most lenders will accept down payment that is gifted from a family member. A gift letter is usually required to be signed by the donor to confirm it is not a loan.
If I have a declared bankruptcy can I still qualify for a mortgage?
Some lenders will consider your mortgage application depending on the circumstances surrounding your bankruptcy and your credit history since the bankruptcy has been discharged. The best way to determine if you can qualify for a mortgage after being discharged from bankruptcy is to call a mortgage consultant.
What is the minimum down payment required to purchase a home in Canada ?
The minimum down payment is 5% to purchase a home in Canada , subject to maximum price restrictions. In addition to the 5% you must be able to confirm that you can cover costs incurred to close your mortgage. These costs may include legal fees, appraisal fees, survey certificates etc. Subject to qualify, the 5% down payment can be borrowed with an additional default insurance premium added to the mortgage (an extra 0.15% if you are using a cash-back mortgage or borrowing the funds (from credit card, line of credit etc) as your down payment.
What is required to obtain a first Canada mortgage?
In most cases:
* Full time employment/proof of income
* Good credit rating
* Verifiable down payment
* Online Approval Application
What can I use for a down payment?
In most cases:
* Registered Retirement Savings Plan (A maximum amount of 25,000 of your RRSP Can be use towards a down-payment)
* Gift from immediate family
* Accumulated savings
* Sale of existing home
* Sweat equity
What costs are involved in obtaining a mortgage?
Costs incurred are:
* Legal costs (Usually between $600 - $1000)
* Insurance on the property and mortgage applicant
* In some cases an appraisal is requested
* Home inspection
How long does it take to complete a mortgage transaction?
If all information requested by the lender (i.e. Income verification, down payment verification and property details) are given to the broker in a timely matter than the transaction can be completed in as little as 1 weeks.