FAQs

Q

Why should I use a mortgage broker and do you charge a fee?

A

The #1 reason to use is Mortgage Broker is that they save you MONEY!

As a Mortgage broker, I work for my clients, not the Lenders.  I continually shop for the Best Rates with the Best Terms possible. I am also a great resource for credit counseling,and rate and payment options. My goal is to help you retire your debts as quickly as possible. Normally all the fees for my services are paid by the Lender and only in rare cases an additional fee might be required as in regards to a private lender transaction.

Q

Should I take a Fixed or Variable Rate Mortgage?

A

This question has a different answer for each borrower and is certainly one issue that we will discuss when setting up your mortgage terms. Most first time home buyers choose a Fixed Rate Mortgage as it gives the borrower certainty, and peace of mind over the full term of the loan as the interest rate and your payment remain constant. With a Variable Rate Mortgage, the interest rate is normally lower than a Fixed Rate Mortgage but it is a bit riskier as the Rates are allowed to float up or down according to Prime Rate. Historically over time, Variable Rate Mortgages have been lower compared to a Fixed Rate Mortgage, saving interest charges and providing for a lower payment. Of course the borrower can lock in their mortgage quickly to a Fixed Rate Mortgage should the rates increase.

Q

Do I really save with Bi-weekly payments?

A

The quick answer is yes and no. Often times a bank may offer you bi-weekly payments but then they lower your bi-weekly payment to less than half of what would have been your monthly payment, so the borrower doesn’t actually save much interest over the term of the mortgage.  The real advantage is Bi-Weekly Accelerated payments where half of a typical monthly payment paid, is paid every two weeks. The borrower is only paying the same amount, per month as a monthly payment but is actually paying an additional 2 payments per year which creates significant interest savings over the life of your mortgage. Ask me how we can arrange your Bi-weekly payment to coincide with your pay cycle. 

Q

Do I have to pay a CMHC mortgage insurance premium?

A

Mortgages are classed as either Conventional or High Ratio. All lenders require that mortgage insurance be purchased if the mortgage is High Ratio, being the downpayment of your home is less than 20% of the purchase price. The insurance is a guarantee to the lender should the borrower default on the mortgage.  The insurance premium can be paid in one lump sum but is normally capitalized in with your mortgage. What is interesting to note, is that the mortgage rate for a High Ratio Loan is typically less than the Conventional Mortgage rate as there is less risk to the Lender. I will be happy to calculate the best rate and best terms for your circumstances.

Q

Why is a home Appraisal needed, and how much will it cost?

A

Each Lender has their own set of rules regarding whether or not a home appraisal is required but as a general rule, home appraisals are not required on high ratio mortgages, where the downpayment is less than 20% of the purchase price. If it is a conventional mortgage or if you are refinancing, then most likely the lender will want an appraisal to determine to see if the price is in line with the properties fair market value. Most home appraisals are in the range of $300.

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