Reason #7: A-B-C Lending Solutions.

We have relationships in place with a variety of lenders including major banks, trust companies, credit unions, monoline lenders,  alternative lenders and private lenders.

Not everyone has a perfect application for an ‘A’ type mortgage product. For example, self employed individuals with lower taxable earnings or those with a bruised credit history may not fit under ‘A’ criteria. There are still several lending options available for those who may not be able to secure mortgage financing with a traditional ‘A’ lender.

A great mortgage broker has strong relationships with various alternative lenders to assist in these situations. Slightly higher interest rates and fees are associated with these type of applications. Alternative lending is best positioned as a short term solution until the clients get their credit back in line or has established the required income needed to qualify with an ‘A’ lender.

Due to the new mortgage underwriting guidelines, private lending has also become more prevalent. Private lending is more expensive than alternative lending in the short term, but can be a good option for those that don’t fit A or B qualifying criteria. Real estate investors and ‘flippers’ can benefit from these private lending solutions.

To summarize, it is valuable to have an experienced mortgage broker working on behalf of the client as brokers have a broad range of lenders to work with and can offer clients the best combination of service, price and product features available depending on the clients situation and their future goals.

As always, let me know if you have any questions or concerns.

Sarah

Reason #6:  Options, Options, Options.

A good mortgage broker has access to a variety of lenders and products to suit your needs. Everyone wants the best rate, but a good mortgage broker will help you choose your lender and mortgage product based on other factors as well as rates.

A few of the other factors to consider, for example:

Term: Fixed or variable rates and open/closed terms: There are advantages and disadvantages to be discussed and considered.

Portability: Do you plan on moving to a new home within the term of the mortgage?

Pre-Payment Privileges: Flexibility to make additional lump sum payments against the principle and/or increase your monthly payment amount throughout the term.

Payout Penalties and IRD Calculations: Understanding how your penalty will be calculated if you break the mortgage before the end of the term.

Interest Compounding: Semi-Annual versus Monthly.

Structuring Multiple Components: Would you like to attach a home equity credit line to your mortgage? Perhaps you may wish to diversify your home investment by setting up your mortgage as part variable and part fixed rate.

Front or Back End Insurability: This has become a very complicated factor with the most recent wave of government rule changes. Insurability can impact many things, including your rate and the option to transfer your mortgage down the road.

Special Insurer Programs: In the event of a purchase, there are various Insurer programs that may be available to you. The flex-down to help with down payment, or a purchase-plus-improvements product to help with renovations might be right for you. The CMHC Green program is becoming more and more popular for those making environmentally friendly upgrades.

It is important to know all of the options before you decide on a mortgage product. A trusted mortgage broker will guide you through this, and provide you with a variety of solutions to suit your short and long term goals.

As always, let me know if you have any questions or concerns.

Sarah

Reason #4. Negotiation

A Mortgage Professional represents the client and ensures the mortgage secured best suits their needs.

A good mortgage broker is a savvy negotiator. Mortgage brokers are independent, trained professionals licensed to represent and provide the best advise for the clients’ mortgage needs. Mortgage brokers know where the best rates can be found, and we represent the client to negotiate best terms, conditions and rates. Often times, a broker can even find better rates at the client’s existing bank. Not only does this save the client money, but invaluable time.

Mortgage brokers represent the customer. Because we are not employees of a lending institution, brokers are not limited to one specific product. Instead, we seek out the best lender package to suite the client’s specific situation, whether it’s with a Chartered Bank, Trust or Insurance Company or Private Funds. There is a wide assortment of options and features available to home-buyers today and shopping around takes a lot of time and effort. Given the new government rules that were implemented on January 1, 2018, the mortgage process can be intimidating. It pays to work with a mortgage professional who will represent the client and negotiate on their behalf to ensure the mortgage is the best option for them. Choosing the wrong mortgage option can cost thousands of extra dollars. Mortgage brokers are trained professionals who can help save the client’s money.

As always, let me know if you have any questions or concerns.

Sarah

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.

Sarah