Are you currently shopping around for a mortgage?
When considering which mortgage to use, asking as many questions as you want is always advisable. Purchasing a home and the mortgage that you will set up to finance your purchase are often the two largest financial decisions that you will ever make. You must know all of the details of both your potential new home as well as the mortgage and the process involved in getting one. As an experienced mortgage broker in Grimsby, Hamilton and St. Thomas areas, below are some of the most important and common mortgage questions people ask us:
Common Mortgage Question #1: How much does a mortgage broker charge?
In most cases our services are free, as a seasoned mortgage broker, we are typically compensated by the lender, not our clients. Not all brokers abide by this but we do. Yes, lenders pay us for placing your mortgage with them, so you access the benefit of our many years of experience for free.
Because we work for you and not a bank, lenders know that they have to offer our clients very competitive rates. This means not only do you get exceptional service, but also at a lower rate than you can directly with the bank, and all this for free.
What other service can present that value?
None that I can think of!
You can end up saving thousands over the term of your mortgage and be assured that the mortgage that you get is the one best suited to your needs at the lowest cost possible.
Conversely, commercial mortgages and private mortgages tend to involve more complicated transactions and the lenders typically do not compensate the broker so we do have to charge a broker fee. In any cases where a broker fee would be applicable, any fees are always discussed early on in the process. It’s best to call your mortgage broker for details regarding your situation.
Common Mortgage Question #2: Why Not Just Use My Bank?
When dealing directly with your bank you are dealing with an employee whose job is to get their employer the best deal, not you. It is our job to get you the best deal because we work for you.
Because we have access to dozens of lenders and they are all competing for our business, coupled with the lever of experience that we bring to the table, your bank just isn’t able to offer you the same number of products, rates or expertise as we can.
Whether you are purchasing a new, refinancing or renewing your mortgage, utilizing our services can reduce stress and save you money. Lenders will often have rate specials throughout the year that are not available to the general public. We are notified of these deals on a daily basis, so we always know who has the best offers.
We are also well-positioned to negotiate a better deal than your bank because we have access to products and rates that are not made available through your bank. A Hamilton mortgage broker will also work to find you the best deal for your situation.
Common Mortgage Question #3: Can I Get a Mortgage if I Have Bad Credit?
Mortgage brokers have access to a variety of lenders across Canada. Even if you have been turned down by your bank, some lenders use different and more flexible criteria. This means that, even with bruised credit, we can often find ways to make your home ownership dreams a reality.
Common Mortgage Question #4: What About Shopping Around for a Mortgage Myself?
Good question! First, many of the lenders that we have at our disposal don’t deal directly with the public. Every time you apply for a mortgage, the lender will pull your credit report. If you have a large number of credit reports that have been pulled up in a short period, it can impact and lower your credit score.
Using a mortgage broker means just one application gets filled out and only one credit check is made. Any lenders we deal with will then rely on this one, rather than having to pull their own. Mortgage brokers also have access to other loan products, and rate specials that aren’t made available to the general public. Let us do the heavy lifting for you!
Common Mortgage Question #5: What Advice Do You Have for a First-Time Home Buyer?
Your mortgage broker is the best place to start before you begin shopping for a home. They will help you get pre-qualified for a mortgage, which means you will know exactly what you can afford. This also works to streamline the process of buying for the real estate agent because they will only show you the homes that match your price range. You won’t waste your time looking at houses you can’t afford, and won’t miss out on houses that you can.
Common Mortgage Question #6: How Much Do I Need for a Down Payment?
When putting less than 20% down, the federal government mandates that the mortgage needs to be insured by one of the mortgage insurers, typically CMHC or Sagen, the two primary insurers. Homes valued up to $1 million can qualify for this insurance if needed, but once the price reaches $1 million or more, you must have a minimum down payment of 20%.
You can purchase homes up to $500,000 with as little as 5% down. For any amount that exceeds $500,000, you need to put down 10% of the amount above the $500,000 mark.
For example, if you purchase a $700,000 home you would need 5% or $25,000 for the first $500,00, and 10% or $20,000 on the remaining $200,000 for a total required down payment of $45,000.
We hope this has helped in your journey to home ownership and specifically with learning a bit more about what questions you should ask when you are shopping around for a mortgage.
Visit our FAQ page for even more information. If you are looking for a mortgage broker or still have more questions, we are more than happy to serve you in the Grimsby, Hamilton and St. Thomas and surrounding areas. Contact us today for more information!