Reason #4. Expertise.
Getting your financing approved to its fullest potential.
Many people leave their bank branch meeting feeling disappointed that they have been declined, or that they are not approved for the financing amount they would like, or that they believe they can reasonably afford. As of lately, the recent waves of government mortgage rule changes have put more and more consumers in this position. Most applications are not “cookie-cutter” anymore. Are you familiar with your bank’s mortgage lending guidelines? For example:
• Debt Servicing Ratios: Each lender has different maximum values they consider for both your GDS (gross debt servicing ratio) and TDS (total debt servicing ratio) to their comfort, within government guidelines. This means each lender can have an individual amount they will allow you spend on your new mortgage and associated costs, and an individual maximum on other debts like credit cards and car payments etc.
• Default Insurers: For those with less than 20% down, you require default insurance and are subject to their approval of your application. In Canada we have 3 insurers. Not every lender uses all 3 of the insurers.
• Qualification Criteria: Knowing how a lender will qualify your income sources or liabilities (self-employed, pensions, child/spousal support paid or received, vehicle payments, etc.) is crucial. The way these are calculated varies from lender to lender and can drastically impact your debt servicing ratios, and therefore your buying power.
• Supporting Documentation: Paperwork can be a pain. A good mortgage broker will work with you and the paperwork you are able to provide and represent you best. Each lender has different documentation requirements, this is very important to consider, especially with the various programs for those that are self-employed.
• Legal Closing Criteria: Your lawyer will advise you of all pertinent issues prior to closing, but a good mortgage broker will have insight in advance on the lender specific requirements, such as property tax payments, condo documents and file specific affidavits that may be required.
A good mortgage broker considers all of the above and more before submitting your application. You don’t need to worry about it. We work for you to get you the best options available, with as little stress as possible.
As always, if you have any questions or concerns, let me know.