Real Estate Understanding each step of the home-buying and mortgage process is key to ensuring the biggest investment of your life matches your unique needs — now and into the future.
Jim Murphy AMP, President and CEO, CAAMP
Whether you’re in the market to purchase your first home, looking to buy another property or if it’s time to renew or refinance an existing mortgage, the services offered by a mortgage broker are truly invaluable.
This is the first expert you should consult, even before you enlist the services of a real estate agent to help you find your dream home.
The very first step is to secure a preapproval through your mortgage professional. That way, you know the amount for which you qualify prior to heading out home shopping, avoiding the risk of falling in love with a home you simply can’t afford.
Mortgage brokers are knowledgeable about the various mortgage products and rates available in today’s market, as well as the issues and trends that may affect you and your mortgage over the long term.
“If you don’t understand something your mortgage professional has explained to you, be sure to ask questions until you feel comfortable.”
When qualifying for a mortgage, there are three key variables that determine your mortgage qualification amount and interest rate:
In simple terms, this is determined by your past record of making payments. The higher your credit score the better. Be sure to pay down or pay off your monthly debts, including credit cards, lines of credit and other loans.
This is an extremely important factor when qualifying for a mortgage, so steady or rising income is to your advantage.
A lender will take into account the property being purchased, in particular its location and condition. A property appraisal will also be required.
Once a mortgage broker sits down with you in order to fully understand your income, type of work and total assets, as well as whether you’re new to Canada or self-employed, they’ll be able to then negotiate on your behalf with multiple lenders – including banks, credit unions and trust companies – based on your specific financial and credit situation.
“Although rate is important, there are many other questions that are just as critical when it pertains to your mortgage.”
And this is a service that’s generally free to the homeowner. In the vast majority of cases, mortgage brokers across Canada are paid by the lender once they successfully place your mortgage. So it’s in a broker’s best interest to ensure you receive the best possible mortgage product and rate tailored to your unique requirements.
If you don’t understand something your mortgage professional has explained to you, be sure to ask questions until you feel comfortable. The more knowledge you gain throughout the mortgage process, the more comfortable you’ll feel taking on likely the largest financial obligation of your life.
It’s important to keep in mind that, although rate is important, there are many other questions that are just as critical when it pertains to your mortgage.
Are there penalties for breaking the mortgage early? What are the prepayment options ?
These considerations can end up costing you thousands of dollars down the road if you neglect to read the lender’s fine print.
A mortgage professional’s job does not come to a close once your mortgage has been finalized. There are often updates from the Bank of Canada, the real estate market and the government that may affect a homeowner, depending on what type of mortgage you have.
Your mortgage professional will help you stay on top of that activity to ensure you’re always equipped with the mortgage to best meet your requirements throughout the life of your mortgage, not just within a single term.