Why use a mortgage broker?
YOUR lending institution will only advise you on their own product. You could visit every institution out there, one by one if you had time......
Or, you can talk to talk to a mortgage broker who will shop for the best mortgage for you from all available lenders including many you would not usually think of 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, 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.
Banks which use brokers, offer lower rates for the brokers to source and bring clients to them and because brokers fund many mortgages we are offered best rates without having to haggle.
Many of the non-bank lenders choose not to spend millions on marketing and instead work with brokers, allowing clients of these institutions to offer better & more flexible products at generally lower rates.
Are there fees for your services?
NO! There are no fees on conventional mortgages as we receive payment for placing the mortgage from the financial institutions, however, in some circumstances lender/broker fees may apply.
How does a mortgage broker get paid?
MOST Financial Institutions pay a referral fee to the Broker for doing all the legwork and credit research for them (the job of a loans officer). Since this service is valuable, a commission is paid by the lending institution to the mortgage broker. In some rare circumstances, a client's financial requirements, credit, or job situation is more complicated and in these cases fees payable to the Mortgage Broker and/or the Lender may be charged.
What is required to obtain a first Mortgage?
In order to a mortgage, you'll need to provide us with:
- Employment verification with proof of income
- Verification of your source of down payment
- An online application
Can I use gift money as a down payment?
Yes, most lenders will accept down payment funds that are a gift from family. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan.
Should I wait for my mortgage to mature?
No. You should contact us up to six months before your mortgage matures so I can secure you the best rate available at that time. Doing this will protect you from any increases before your renewal date. You will also benefit from decreases should they occur. Most lenders send out their mortgage renewal notices only a month prior to renewal, offering existing clients their posted interest rates. The rate you are offered is usually not the best. We will investigate all of your options and find the solution that best suits your needs.
Should I go with a Fixed Rate or Variable Rate?
That's a great question......here are some of the differences:
Fixed Rate Mortgage
The mortgage rate stays the same for the whole term and the mortgage payments are consistent during the term of the mortgage.
Variable Rate Mortgage
The mortgage rate varies with fluctuations in the bank prime rate. As a result, mortgage payments may vary during the term of the mortgage. A minimum term commitment is often required (usually 3 years). You may have the option to "lock-in" the mortgage at a fixed rate during the term.
What's the difference between a Closed Term and an Open Term?
Closed Term Mortgage
The mortgage contract is typically written for terms of 1 to 10 years. Penalties may be triggered if the borrower wishes to end the contract before the term expires (early repayment).
Open Term Mortgage
The mortgage contract is written for a short term (usually 6 months or 1 year). No penalties are triggered if the borrower wishes to end the contract before the term expires.
Should I take a short term or a long term mortgage?
The options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6 month terms to 10 year terms. Savings can be had by taking a variable or floating rate mortgage. Typically the shorter the term or guarantee of the rate, the lower the rate will be. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision.
Cash-backs and gimmicks, do they save me money?
Be very careful! Some of the gimmicks used to entice you to take a mortgage at an institution may seem very appealing but the long term effect could be costly. A 3% cash back may seem great on closing, but a 1% discount in your rate may save you considerable more over the 5 years. It is important to look at the numbers. We have the software available on our system to compare your options. Give us a call to do the math.