Canadian Mortgage Experts are committed to making the mortgage process simple, transparent and comfortable for all clients. Our process creates competition for your mortgage, maximizing your chances of getting the best rates and terms. The experience is friendly, quick and doesn’t cost you anything.

Brokers provide CHOICE…. if you only approach one mortgage lender, you will only ever know the rates and terms that one lender has to offer. It would be like just looking at one house before making an offer to purchase! Yes, they all have four walls, a roof and some similar features, yet each home has unique differences and details that can prove to be very important. By looking at many homes, you found the one that is just right for you. By considering many available lenders and mortgages, your government licensed mortgage broker can find the one that is perfect for your situation.

BACKGROUND

Historically, mortgage brokering as a profession arose in the 1960s to meet the demand of consumers who did not qualify for a mortgage from their bank. Traditionally, brokers assisted those individuals for whom mortgage financing was unobtainable – either because they were self employed, had poor credit or for any other number of reasons were considered an undesirable risk by the bank. Brokers were largely viewed as a ‘last chance’ opportunity for bottom of the barrel clients who had to pay high rates and fees.

Those days are no more! Mortgage brokers have had such a positive influence on the industry as a whole. Over time, deregulation allowed consumers greater choices and options, and brokers were able to begin offering the general public mainstream mortgages. Many lenders found it less expensive to deal with a mortgage broker rather than invest in a large branch network to deal with consumers directly. Accordingly, they began to offer brokers “finder’s fees” for prime mortgages placed with well-positioned clients. The subsequent discounting put pressure on all lenders to compete by lowering their rates and improving their service, thus benefiting consumers everywhere. The contemporary mortgage broker has so much more to offer their clients than the clerk at the bank.

EDUCATED, CERTIFIED AND LICENSED

In British Columbia, we are government licensed. While employees of banks and financial institutions do not need to comply with any mandatory education requirements or obtain a government license, mortgage brokers do. We complete mandatory industry and finance courses at UBC and must pass a rigorous exam. We are then licensed by the government, by a process that includes extensive background and criminal record searches. We abide by the Mortgage Broker Act and Regulations, which include stringent ethics and confidentiality protocols. By breaking these, or even stretching them, we risk losing our license. Many of us also belong to professional associations such as the Mortgage Brokers Association of BC or the Canadian Association of Accredited Mortgage Professionals. For us, this is a profession, a career in which we take great pride and build a business for ourselves.

EXPERTISE

Unlike the staff at your bank, we do one thing only, and hence we do it well: mortgages. We don’t want you to move your bank account. We don’t want to sell you investments, RRSPs or foreign currency. We don’t get shuffled around from department to department, but rather develop specialized knowledge in the area of lending and borrowing. Reputable brokers have one goal, and that’s to get you the best mortgage possible. As specialists, we have a thorough understanding of the mortgage market, all the available lenders, options, features and rates. It is what we do each and every day. Our comfortable familiarity with “everything mortgage” allows us to be a complete resource of information to our clients. Good brokers are well equipped to ensure that their clients know exactly what’s going on, every step of the way, and ensure they know exactly what they’re getting into.

INDEPENDENT

We offer absolute and unbiased advice. We are not employed by a particular lender, so we can consider all of them, based on merit and performance, not for any other motive. Because we are not limited to the loan options and guidelines of any one bank or lender, we can freely shop them all. As your personal mortgage shopper, we have instant access to all the best rate sales, specials and promotions. The clerk in your bank is not going to tell you that the bank down the street has a limited time rate special, or that another has a promotion this month for free legal and appraisals! As your mortgage consultant, we work for YOU. We will argue your cause and negotiate to get you the very best rate.

FREE

In Canada, mortgage brokers are paid directly by the lender. So except in very complicated cases of challenging specialty loans, there are never any fees for our services. If you should happen to be in a unique circumstance, any fee would be disclosed and discussed before any work commenced. That would be unusual. Normally, we receive a referral fee from the lender, and this compensation is calculated on the amount that you borrow and for what term, not the interest rate that we negotiate on your behalf. This means we have every reason to get you the best rate possible. We have access to every major lending institution in Canada. When lenders compete, you win!

WHOLSESALE RATES

As brokers we have access to wholesale lenders that do not even deal with the public. They only deal with brokers. Wholesale lenders don’t have the financial burden of expensive retail branch networks. These savings are passed on to you, the borrower, in the form of mortgage rates that are considerably lower than the retail rates you would obtain at your bank. Even the major banks, which tend to offer fairly similar rates, occasionally have ‘rate sales’ that are not advertised to the general public.

CONVENIENCE

You don’t have to stand in line to see your mortgage broker! In fact, you likely don’t need to go anywhere at all, we will typically come to you or meet you somewhere convenient, at a time that suits your schedule. This might be an evening or a weekend. When was the last time you called your banker on a Sunday afternoon? The initial mortgage consult can be done with a phone call or over a coffee. I’ve even done several over a glass of wine.

MANY CHOICES, ONE CREDIT CHECK

It is certainly possible that your own bank might give you the plan you want at a competitive rate. However, this is just a chance. You will only know if it’s anything more than a chance by actually looking elsewhere. You could go to other banks and lending companies that deal with the public… but in addition to being time consuming, stressful and overwhelming, each one would want to ‘pull a credit report’ in order to obtain your credit score, so that they know what interest rate you qualify for. Multiple hard-enquiries on your credit bureau will have a negative impact on your credit score. On the other hand, consumers that work with a mortgage broker know that only one application is required, only ONE credit report is pulled, and that it will be good for over dozens of different lenders.

SPIT AND POLISH

We are professionals and we know exactly what the lenders are looking for in a successful mortgage application. We will prepare you, help you assemble all the necessary documents and then present your application in the best light possible for approval. If there are any weaknesses in your profile, we are in a good position to help you overcome them, emphasizing the strengths to the lender that mitigate any challenges. We are motivated to get you approved, that’s how we get paid!

INNOVATIVE PROGRAMS

A broker will normally collect all the information from a client and then search for the lender who can provide the best product for the best rate with the fewest complications. Sometimes a borrower might require more flexibility than is offered by conventional financial institutions. Perhaps the application is challenged with bruised credit, the applicant might have very little in the way of a down payment, or perhaps the applicant is self-employed and ‘writes off’ most of their income as expenses. Even though these people would often be turned-down at their bank, there are actually lots of lenders out there with specific programs and loans tailored just for these very populations. Mortgage brokers are industry and market experts, and thus are knowledgeable about the programs of multiple lenders. We understand both how and where a loan can be done, and can guide you to the right source.

SATISFACTION

The market share of loans placed by brokers rises every year. People like their brokers! They use them again and again, and refer their family and friends. As expected, brokers place the overwhelming majority of alternate and private mortgages. However, the mortgage broker channel also accounts for about one-third of all residential prime mortgages originated in Canada every year. This number jumps to 44% for first time homebuyers. Discover what clever consumers already know….. Smart people use savvy mortgage brokers!

There are a lot of variables that are considered by the underwriter evaluating your mortgage application. A strong file scores highly in all categories, obviously…. but underwriters do have some discretion to grant exceptions to many of the rules. A small weakness in one category can be offset by strengths in others. A skilled mortgage broker will be able to present your application in the best light possible and know which guidelines are hard-and-fast, and which are not.

Here are some of the factors considered by lenders when considering your mortgage application:

Income and Debts: Your income determines how much you may borrow, but it is also considered relative to your other unsecured debts. A guideline is that about 30% of your gross income is the maximum that can be used towards your mortgage payment, and about 40% of your gross income is the maximum that can be used for all minimum debt payments combined (credit cards, student loans, car payments, etc.). Your mortgage broker will take a full application and provide you with an exact maximum based on your situation.

Stability: The longer you have been at your existing job, the better. If you are thinking about a career change, and you’re also thinking about applying for a new mortgage, get the new mortgage first! A stable job history goes a long way to reassuring the lender that you will continue to be employed. It is usually not possible to get a mortgage while you are still on probation.

Appraised Value: The lending value of the home you are purchasing is either the purchase price or the appraised value, whichever is LESS…. this can be a bit surprising for many buyers.

Down Payment: It goes without saying that the bigger the down payment, the higher the lender’s comfort with your application. Mortgage applications with the minimum 5% down payment need to be very strong….. if there is anything to make the underwriter uncomfortable, they may come back with a suggestion to increase the amount of the down payment. The loan as a proportion of the purchase price is called Loan-To-Value. Lenders also care where the down payment is coming from and will request documents to confirm it’s origin. Down payments from own resources are viewed more favorably than those gifted by a family member.

Credit History: Your credit score must reflect that you pay your bills on time. There are minimum requirements from best-rate lenders, and if you have a weak credit history, you may not qualify for insured financing (mortgages with less than a 20% down payment). If you have any collection items, the lender may insist that you pay them out before approval. If your credit is ‘bruised,’ speak with your mortgage broker for lousy credit about the most efficient way to raise your score.

A reverse mortgage is a loan that is designed for homeowners 55 years of age and older.  If you have a spouse, the age qualification applies to both of you.  It is secured by the equity in the home, just like an ordinary mortgage.  It allows homeowners to obtain funds without having to sell their home.

Unlike a conventional mortgage, you don’t have to make any regular or lump sum payments on reverse mortgages in Canada.  Instead, the interest on your reverse mortgage is added to the balance owing, and the balance grows over time.  If you sell your home or it is no longer your principal residence, then the mortgage must be repaid, along with the interest that has accrued.

A reverse mortgage is not available as a second mortgage, so if you already have a mortgage and you would prefer to have a reverse mortgage, you must first use the proceeds to pay out any other existing mortgages or secured lines of credit.

The benefits are obvious: there is no qualification process (credit or income) and there are no payments required.  It is a means to tap into the equity of your home without having to sell it.  Furthermore, the money you borrow is tax-free, and it also doesn’t affect the Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be receiving.  Funds can be advanced all at once in a lump sum, or in periodic increments that provide you with a regular income.

On the other hand, reverse mortgages typically carry a slightly higher interest rate than best market rates available to borrowers that qualify on the basis of income and credit.  Also, the equity in your home could decrease if the balance of the mortgage is accumulating faster than the home is appreciating in value.  Finally, the closing costs of a reverse mortgage, while similar to those of a regular mortgage (appraisal, legal, etc) also involve a fee payable to the lender.

Regardless of market fluctuations, reverse mortgages in Canada come with a guarantee that the mortgage balance owing will not exceed the market value of the home, protecting you, your heirs and your estate.  The borrower is still the owner of the home and remains on title.  There is also an option to ‘transfer’ the reverse mortgage to a new property, if it qualifies.

Find out if a reverse mortgage is the right product for you by contacting Rebecca anytime.