FAQ

Popular Question

A good mortgage broker will first and foremost listen to the needs of their clients to better understand their situation. This involves finding out about their immediate and longer term objectives for housing, their general knowledge of the mortgage process and their current status in that process (e.g. wanting to get pre-approved, already purchased, their mortgage is coming up for renewal, etc.). The next step is to review the clients’ financial information including income, employment, debts, down payment, credit report, and other factors. With this information, a broker can determine which financing options are available to the clients, based on products and lenders that match their criteria. Based on all of this research a broker will provide clients with a financing strategy that suits their needs and also discuss options such as which lender to consider for their financing and why. The key ingredient in this process is helping to educate the client about their choices, as needed, and determining a strategy that addresses a clients specific circumstances.

If you go to a retailer that carries only one brand, you will be limited to only those products in that one store. The same applies when you go to your bank. They can only offer you their products, but nobody else’s. Mortgage brokers offer financing solutions from banks as well as many other lenders, giving the consumer the option to compare their choices across multiple brands and therefore multiple solutions. Brokers work directly with Banks, Credit Unions, Monoline Lenders, Commercial lenders and Private lenders. Simply put, Brokers are your one-stop-shop for upwards of 30 different lenders, which means you have access to all of those products as well. Because of this, brokers often have solutions for clients that they might not get at a bank.

No, in fact, the opposite is true since clients will have the benefit of learning the details of multiple lenders, multiple mortgage products and multiple financing strategies whereas a bank will offer only their brand of products and services.

No, in fact, the opposite is true since clients will have the benefit of learning the details of multiple lenders, multiple mortgage products and multiple financing strategies whereas a bank will offer only their brand of products and services.

For the vast majority of situations, the answer is “No”, because Brokers usually get compensated directly by the lender in the form of a finders fee. A Broker might charge a fee if they are working with a private lender or a specific type of mortgage product that is not offered by most other lenders. A Broker must disclose to the client in writing if they are charging a fee in accordance with Provincial regulations, and the clients must acknowledge that by signing the form as well.

By definition, all mortgages are “closed”, meaning you cannot make changes to them without incurring a penalty or cost of some kind. Mortgage features such as prepayment privileges or lump sum payment privileges allow for changes in payment terms to be made without penalty or fee. Other features in a mortgage can include a line of credit (often referred to as a HELOC), cash-back mortgages, interest-only mortgages, and so on. There are also programs offered by insurers like CMHC, Genworth or Canada Guaranty that offer consumers access to unique features such as the Purchase Plus Improvements, Stated Income deals, flexible down payment features, home warranty features, and more. Not all lenders offer the same privileges or programs, so it’s important to speak with a broker that has access to, and knowledge of, these many options.

Mortgage features are incredibly important, and should always be understood and reviewed with your broker to ensure you are getting the most out of them. Sometimes a specific feature can mean the difference between getting an approval or not, or paying down your mortgage faster than you otherwise might be able to, saving potentially thousands of dollars in interest over time.

A fixed rate mortgage is one where the interest rate does not change at all during the term of your mortgage and is determined almost exclusively by the bond market. A variable rate mortgage has an interest rate that can go up or down during the term of your mortgage and is based almost exclusively on the Bank of Canada overnight lending rate (the rate at which the Bank of Canada lends money to other financial institutions).

This is the time period that your mortgage is set at a particular rate (fixed or variable). At the end of this time period the mortgage can either be renewed, paid off entirely, or switched/transferred to another lender. Terms typically range from one year to ten years, with the most popular term being 5 years.