Frequently Asked Questions About Mortgages
When it comes to mortgages, there are a ton of questions clients have but often find answers difficult to come by. As mortgages can be complicated products, Dan has answered some of the most frequently asked questions so you can make an informed decision.
1. Does it cost to use a mortgage broker?
Ninety-five percent of the time we get paid by the lender, so there is no cost. The other five percent is only in private mortgage situations, where it costs to use a mortgage broker.
2. Can a mortgage broker get a better rate?
Most of the time the answer is yes! For example, I deal with over fifty-seven lenders that offer different rates for different situations. That is the benefit of using me, as I can find the best rate for the situation.
3. Are all mortgages alike?
No, there are many types of mortgages, and classifications of mortgage which will affect your rates, penalties, pre-payment privileges and flexibility. That is why you need to go to a professional broker who can weed through all the differences.
4. Do I have to bank with the lender I chose?
No, we only require a void cheque from the institution you want to use, you can virtually use any bank or credit union.
5. Are there penalties to break a mortgage?
Unless you are in an open mortgage, the answer is YES! Now depending on which mortgage lender you use, the penalties can vary from a thousand dollars to tens of thousands. Currently, Banks and Credit Unions calculate their penalties very different from mortgage companies and thus have extremely high penalties.
6. If I have a co-signor, do they have to be on a title?
Co-signor means co-owner and yes they are on title. A guarantor will guarantee the mortgage but will not be on title.
7. What is a collateral mortgage?
There are two ways a lender can register a mortgage loan: they can use a mortgage charge or a collateral charge. A collateral charge is registered under the Personal Property Security Act (PPSA) of Canada, and can only be registered or discharged (not transferred) from your lender. Some banks will put you into a collateral mortgage which limits you or will cost you if you want to leave that lender.
8. What is the minimum down payment?
The minimum downpayment for anyone is five percent. It doesn’t matter if you are a first-time homebuyer or on your tenth home. The loan will have to be insured by one of the three insurers in Canada, and you will have to pay a one-time premium for that.
If you have any more questions about mortgages, get in touch with Dan Balch. With over twenty-two years of experience, I have been helping my clients achieve their home-ownership goals. Having successfully obtained mortgages for clients that had no hope of procuring mortgages, I’ve been nicknamed Dan as I treat each client’s case with the utmost care and respect, while providing you with a wealth of information. To learn more about how I can help you, please click here or contact me by clicking here.