MORTGAGE FAQS

Should i take a fixed or variable rate?

A five-year fixed rate mortgage gives extra peace of mind because it does not vary during your term. If you simply cannot tolerate any rate increases, than a fixed rate would be worth considering. It is important to realize however, that fixed rates could cost you more in penalties should you choose to break your contract early.  Statistically, variable rates have always been cheaper due to their discount off of the Prime Rate as well as the cheaper cost of exiting early. I would be happy to go over the differences with you in greater detail. 

I have a lot of high-interest debt. Should I refinance my mortgage and consolidate?

Credit cards and other unsecured loans take their toll on our finances. Often, they are higher interest making it difficult to pay them off.

In my experience, many borrowers recognize the value of consolidation. When I present the math, it's a no-brainer. Consolidation works. It establishes a plan to pay down debt and it also recovers a person's monthly cash flow. ​
​

what is the minimum down payment required?

Currently, the minimum down payment required is 5% to purchase a residential home if it is $1,000,000 or less. Lenders will also want to confirm that in addition to your down payment you have money for closing costs. Closing costs usually add up to 1.5% of the purchase price and include legal fees and land transfer tax. 

HOW MUCH CAN I AFFORD?

Mortgage Calculators online currently do not give the most accurate picture of what you can afford. Your taxable income or claimed income, if self-employed, must be accurate and your liabilities must be accounted for. So, for example, car loans, credit card payments, student loans, etc. must all be included. We must also determine the cost of property taxes which vary by property and heating costs. The best way to find out mortgage affordability is to complete a pre-approval appointment via a telephone or in-person consultation. Doing it this way ensures accuracy and no disappointments.

what is a mortgage broker?

A mortgage broker is a licensed specialist who is the middleman/woman between you and various lenders. Some of those lenders include major banks and credit unions as well as monolines accessed exclusively through the broker channel. He/she should always shop your application around to find you the best rate and mortgage terms and be willing to explain the mortgage process to you. 

what is a monoline lender?

As a mortgage agent, I work with many "A" lenders along with "B" lenders and various other private lenders. "A" lenders are either banks, credit unions or monoline lenders that offer the most competitive rates. The main difference between a monoline lender and a major bank is that the monoline does not have overhead and is not a deposit taking corporation. It strictly focuses on mortgage lending instead of deposits and investments, for example. This, in turn, often translates into better rates and optimal savings for borrowers. 

Monoline lenders are not risky or riskier than any major bank. Monolines are also federally regulated and must adhere to the Government guidelines currently imposed on major banks.

Monolines tend to have better terms written in their mortgage contracts than major banks. For example, their prepayment penalties are usually less and they offer a more generous prepayment privilege.

wHAT IS AN APPRAISAL?

An appraisal is a estimate, completed by a certified and accredited appraisal company, confirming the value of your home. Appraisals are guided by recent sale prices between 30-60 days old of properties that are comparable to yours. An appraisal may be required if the lender cannot confirm the value by its internal valuation system. 

how much down payment do i require to purchase an investment property?

Currently, to purchase an investment property, borrowers must have a down payment of at least 20%.  There are other programs that allow for as little as 5% down such as cottage properties and second homes. For more information, click HERE. Standard mortgages are available such as fixed and variable rates and extended 30 year amortizations are offered. There are still competitive interest rates offered when it comes to investment properties. Some lenders may charge a small insurance premium if the down payment is 25% or less. If you want to purchase a rental property and have at least a 20% down payment, we can help arranging optimum financing to help you save money and maintain a convenient monthly mortgage payment.

how much income do i require to qualify for purchasing or refinancing a rental property?

How much income you require for a mortgage loan depends on new mortgage stress-test requirements. The general rule of thumb is that a borrower would qualify for up top 5x their income in mortgage. So for example, if you make $60,000 a year, you could potentially qualify for a mortgage in the amount of $300,000. Of course, there is the option of a thirty-year amortization on conventional loans which could allow a borrower to qualify for more. There's also the option of consulting a mortgage broker directly to pair you with a non-federally regulated financial institution who does not have to adhere to the mortgage stress-test. Contact us today for more information 6477734849

BOOK A CONSULTATION TODAY