At Dominion Lending Centres Vanisle - Modern Mortgage Group, we believe that communication is key. We would like to offer as many answers to your questions as possible. In order to more easily navigate this page, choose a topic from this list and you’ll be directed to the answer.
How are mortgage brokers paid?
A mortgage broker’s services are usually free because commissions are generally paid by the banks or lenders directly to the mortgage specialist. Only in the most challenging of situations and for commercial mortgages will a fee be charged. If a fee needs to be paid, your mortgage specialist will advise you of what the fee will be before you decide to proceed with the mortgage.
Why use a mortgage broker?
A mortgage broker shops your mortgage for you. Shopping your mortgage means we will find you the rates and terms for your mortgage that best match your individual needs. Once you and your mortgage broker find a mortgage with the rate and terms you are satisfied with, your mortgage broker will do all the necessary work to complete the mortgage for you.
Why use a mortgage broker?
A mortgage broker works for you, not for the bank. Mortgage brokers help secure mortgages with a wide variety of lenders: banks, credit unions, trust companies, financial institutions and private lenders. A mortgage broker can match each client to the lender who provides the product best suited to the needs of the client. We can choose from hundreds of products, not just the few products that each bank is limited to.
What is the difference between a mortgage broker and a bank specialist?
A mortgage broker has access to 100s of different products, so each client can be matched to the product that fits their needs best.
A mortgage broker can meet with clients on weekends or in the evening, if necessary.
A mortgage broker works for you, not the bank.
A mortgage broker will take the time to explain all the options available to you and answer questions about all the different products in a way that is easy to understand.
What’s my maximum purchase price?
What you qualify to purchase is determined by many factors, including but not limited to your down payment, useable income, liabilities and credit score. As mortgage brokers, we look at all aspects of your current circumstances and provide you with a breakdown of your maximum purchase price based on your individual circumstances and current lender options.
Dominion Lending Centres Vanisle - Modern Mortgage Group works with numerous lenders with different qualifying requirements, and when you provide us with a complete mortgage application, we will thoroughly analyze your individual situation to provide you with your maximum purchase price details or guide you in how to achieve your purchase goals.
What is a home inspection, and do I need one?
A home inspection is a visual examination to determine the overall condition of the home. In the process, the inspector should examine the major components of the home – i.e., roof structure, foundation, plumbing, electrical. The results of the inspection should be provided to the buyer in written form within 24 hours of the inspection. Pre-purchased home inspection can add peace of mind and make a difficult decision much easier. A home inspection can make you aware of any problems existing in the house so the cost of those repairs can be factored into your home-buying decision. The home inspector helps remove a number of unknowns and increases the likelihood of a successful purchase.
What is the minimum down payment required to purchase a home?
In general, a minimum down payment of 5% is required to purchase a home, subject to certain maximum purchase price restrictions. However, in some situations, a larger down payment may be required. In addition to the down payment, you must also be able to show that you can afford the applicable closing costs.
Generally, at least 5% of your down payment needs to come from your own resources or be a gift from an immediate family member. Borrowed down payment programs may be available for qualified borrowers. Contact us for details on current down payment requirements tailored to your personal circumstances.
What are closing costs?
Closing costs are costs required to complete your real estate transaction. Costs will vary by transaction; however, lenders generally require proof of 1.5% of the purchase price for home purchases. Costs may include legal fees and disbursements, property transfer tax, appraisal fees and title insurance. Other costs may apply, and we will help you determine what your closing costs will be. Feel free to call us to discuss your personal situation as we are always here to help.
What is mortgage loan insurance?
Mortgage loan insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, or by Canada Guaranty or Genworth (both are approved private corporations). This insurance is required by law to insure lenders against default on mortgages with a loan-to-value ratio greater than 80%. The insurance premiums, ranging from 0.5% to 7.0%, are paid by the borrower and can be added directly onto the mortgage amount. This is not the same as mortgage life insurance. To qualify for mortgage insurance, there are 2 factors to consider. Both the buyer and the home must be approved by the insurer. Your mortgage broker can explain this process and provide guidance.
What is a conventional mortgage?
A conventional mortgage is usually one where the down payment is equal to 20% or more of the purchase price, a loan-to-value of or less than 80% and does not normally require mortgage loan insurance.
How does bankruptcy affect qualification for a mortgage?
Depending on the circumstances surrounding your bankruptcy, generally, some lenders will consider providing mortgage financing. One of our mortgage professionals can discuss your personal situation and provide you with answers to your questions.
How will child support affect mortgage qualification?
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.
Can I get a mortgage to purchase a home and pay for renovations?
Yes, subject to qualification. In fact, even purchasers with 5% down payment may qualify to buy a home and make improvements to it. For high-ratio, insured mortgages, financing is available to cover the purchase price of a home as well as an amount to pay for immediate renovations or improvements that the purchaser may wish to make to the property. This option eliminates the need to finance the renovations or improvements separately. Some conditions apply.
Where the improvements are cosmetic, the mortgage loan insurance premium is unchanged from the standard schedule. For information on mortgage loan insurance premiums, contact us about high-ratio home mortgage financing.
What is a pre-approved mortgage?
A pre-approved mortgage provides an interest rate guarantee from a lender for a specified period of time (usually 60 to 120 days) and for a set amount of money. The pre-approval is calculated based on information provided by you and is generally subject to certain conditions being met before the mortgage is finalized. Examples of some conditions lenders may set would be things like “written employment and income confirmation” and “down payment from your own resources.”
Many real estate professionals will want to ensure you have a pre-approved mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range.
In summary, a pre-approved mortgage is one of the first steps a homebuyer should take before beginning the buying process.
Should I wait for my mortgage to mature?
Lenders will often guarantee an interest rate to you as much as 120 days before your mortgage matures. And, as long as you are not increasing your mortgage, they will cover the costs of transferring your mortgage, too. This means a rate promised well in advance of your maturity date, thus eliminating any worries of higher rates. And if rates drop before the actual maturity rate, the new lender will usually adjust your interest rate lower as well.
Most lenders send out their mortgage renewal notices offering existing clients their posted interest rates. The rate you are being offered is usually not the best one. Always investigate the possibility of a lower interest rate with the current lender and/or another lender. Call us; we can do all the research for you!
What are the costs associated with buying a home?
First and foremost, you have to make sure you have enough money for a down payment – the portion of the purchase price that you must pay upfront.
To qualify for a conventional mortgage, you will need a down payment of 20% or more. However, most people can qualify for a high-ratio insured mortgage with a down payment as low as 5%.
Secondly, you will require money for closing costs (up to 2.5% of the basic purchase price).
If you want to have the home inspected by a professional building inspector—which we highly recommend—you will need to pay an inspection fee. The inspection may bring to light areas where repairs or maintenance are required and will assure you that the house is structurally sound. Usually, the inspector will provide you with a written report. If he/she doesn’t, you should request one.
You will be responsible for paying the fees and disbursements for the lawyer or notary acting for you in the purchase of your home. We suggest you shop around before making your decision on who you are going to use, because fees for these services may vary significantly.
There are closing and adjustment costs, interest adjustment costs between buyer and seller, and (depending on where you live) land transfer tax – a one-time tax based on a percentage of the purchase price of the property and/or mortgage amount.
Finally, you will be required to have property insurance in place by the closing date. And you will be responsible for the cost of moving.
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