FAQ

Below is a list of Frequently Asked Questions. hopefully you can find the answers to your questions here, if not, feel free to contact meDay or night, rain or shine! and I will be happy to help.

Why should I use a mortgage broker?

One of the biggest reasons to use a mortgage broker is because I get paid by the lenders to work for you!. As a broker, I have access to a huge number of lenders. Each lender wants your business and my job is to find the best rate for you out of all of them.

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How much will this cost me?

In the majority of cases I get paid by the bank (or lender) – so the cost to you is $0. In some extreme cases where there may be a small fee – this can happen with private lenders; however, in those cases you would be given plenty of fair warning, and then you would be able to decide if you wanted to proceed with the deal.

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Do I need a down payment?

In short, yes. The minimum down payment requirement is 5%. That being said, there are still programs available where the down payment can be borrowed or gifted from an immediate family member. These are generally available to individuals with excellent credit ratings.

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What is the difference between a conventional and hi-ratio mortgage?

A conventional mortgage is where the down payment is 20% or more. A mortgage is considered hi-ratio if the down payment is less than 20%. In these cases the mortgage will need to be insured by CMHC, Genworth or Canada Guaranty.

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What is default insurance?

Default insurance is offered by CMHC, Genworth and Canada Guaranty. This is a type of insurance that you pay for where the bank is the beneficiary. It means that if for some reason you should default on your mortgage, the bank (or lender) will recoup their funds.

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What’s the difference between a fixed and variable rate mortgage?

A fixed rate mortgage will have the same interest rate for the term of the mortgage – for example: 5yrs. A variable rate mortgage is tied to the prime interest rate so it fluctuates as prime goes up and down. there is no answer to which is better, it all depends on your risk tolerance. Normally you can convert a variable rate mortgage into a fixed mortgage at any time without penalty.

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What type of documentation will I need to provide?

This depends on they type of purchase you are making and can get a bit complicated. For most typical cases you will need:

  • Most recent pay stub
  • Letter of employment
  • Confirmation of down payment (3 months of bank statements)
  • Offer to purchase
  • MLS Listing for the property

There may be other documentation required if the deal is a refinance, private purchase or you are self-employed, stating income.

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How long does it take to get approved?

Approval can be issued with 48hrs of submitting the deal to a lender. This assumes that everything is in order and that we haven’t missed some important pixels of your financial picture. This is where it becomes important to ensure that I have all of the details and documentation necessary to properly structure your deal. Having to go back and add or remove things from the deal can delay the process and introduce uncertainty to the prospective lenders.

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What is the Home Buyers’ plan?

Simply put, the Home Buyers’ Plan (HBP) is a government program that allows you to withdraw up to $25,000 from your RRSP’s to build or buy a qualifying home. For a full rundown of how it works, feel free to contact me and I can explain the process in more detail. You can also download a copy of the T1036 from the forms cabinet.

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