Frequently asked questions
No! We get paid by the lender (financial institution) who agrees to finance your mortgage. This “finder’s fee” is our compensation for bringing them worthy residential customers like you. These fees are similar from lender to lender, so there is no incentive for us to favor one over the other. In very rare cases, such as if the applicant has non-standard credit or we are arranging a second mortgage for which we are not properly compensated, a brokerage fee may be charged. Otherwise only in the case of commercial financing is a fee charged.Please note that as a licensed mortgage brokerage, the Financial Services Regulatory Authority (FSRA) and the Mortgage Brokers Act govern us. All of our agents are registered with FSRA, as well as the Mortgage Professionals Canada (MPC). Please see our links to both of these associations.
A conventional mortgage is one in which the mortgaged amount does not exceed 80% of the market value of the property. This means that the borrower must have 20% or more available for the down payment or equity remaining in their home.
Mortgage loan insurance is for clients who have less than 20% down payment or less than 20% equity in their home. If this describes your situation, your mortgage is subject to an insurance premium. This premium ensures the lender that should you default on your mortgage payments they will reimburse the lender for their investment. See our links to CMHC, Genworth and CG for a breakdown of insurance premiums.
In a fixed rate mortgage, the interest is determined and set for the term of the mortgage, which means that there is no change to your principal and interest payment for that particular term. Fixed rate mortgages are most desirable when current interest rates are low.
Also referred to as adjustable rate mortgage, a variable rate mortgage is the opposite of a fixed rate mortgage. The interest rate on this loan may fluctuate during the term of the mortgage reflecting changes in current market rates as dictated by the Prime rate, which is set by the Bank of Canada.
Requesting a pre-approval allows you to shop for a property within your price range with the comfort of knowing that financing is available, subject to the lender reviewing the subject property. A pre-approval, based on your current financial review and credit check, determines the amount you can borrow, the size of your mortgage payments and your interest rate, which is then guaranteed for a maximum of 120 days.
There are a number of guidelines that govern lenders’ approvals. As a new immigrant without an established credit history or a beacon score, this can sometimes create challenges. There are an assortment of products available, however, that are dictated by down payment (LTV), debt ratios (GDS/TDS), previous credit, as well as the ability to provide proof of income whether you are a regular employee or self-employed that will help a new immigrant get a mortgage. To better understand what you may qualify for, feel free to contact us and we will research your financing options for you.
Conventional lenders such as banks prefer to deal with borrowers who have very good credit history. However, there is a wide variety of products available to suite nearly every potential buyer. Our approach is to find the product that best suits your financial scenario. Lenders are realizing that this is a portion of the market that needs attention and a large number of them specifically cater to these needs. Call us to find the one that best suits you!
There are a number of ways to achieve this. Opting for a bi-weekly payment schedule is one step in the right direction, but it is even more effective when coupled with taking advantage of your particular lender’s prepayment policy. It is not really the frequency that makes a big difference, but how much you pay. Any extra payment towards your principal dramatically improves your amortization period, thus decreasing your principal balance quicker and saving you the interest you’d pay over a longer amortization.
Yes. This option eliminates the need to finance the renovations or improvements separately. It can also be done in the case of high ratio financing, although some conditions apply. Please note that the funds for the renovations are not advanced up front. Rather, they are reimbursed to the clients after an inspection is complete to ensure the value of the work completed is accurately reflected in the homes new overall value. Please feel free to call us for further clarification.
Where child support and alimony are paid by you to another person, generally the amount paid out is deducted from your total income before determining the size of mortgage you will qualify for. Where child support and alimony are received by you from another person, generally the amount paid may be added to your total income before determining the size of mortgage you will qualify for, provided proof of regular receipt is available for a period of time determined by the lender.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.
Note: Budget 2019 proposes to increase the Home Buyers’ Plan withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019.
Under the new Canadian mortgage rules, In order to qualify the stress test will use either 5-year benchmark rate published by the Bank of Canada or customer’s mortgage interest rate plus 2%, whichever is the higher. Let us work with you to manage your way through this government regulation.