Mortgage Articles

There aren't too many Canadians who are able to save up enough money to pay cash for their home. This is why we have mortgages. A mortgage is a loan made to assist a borrower to purchase a property. The property is held as collateral and interest is charged on the loan. Typically a mortgage will be paid back over 25 years (this is called the amortization), and the amount of interest charged is renegotiated every 1-10 years (this is called the term). Over the long run, borrowing money isn't cheap, despite interest rates being at an all time low! So, if you need to borrow money in order to buy a property, your number one goal should be to keep your cost of borrowing as low as possible. Bolded and italicized for emphasis. Now, contrary to what years of marketing messaging would have us believe, this doesn't always mean choosing the mortgage with the lowest rate. Although choosing a mortgage with a low rate is a part of lowering your borrowing costs, it's not the only factor.

Tell us a little about your finances and the type of property you’re looking to buy. These mortgage affordability calculators will help you understand how much house you can afford. Or if you'd like to get started straight away with our mortgage experts, you can do just that here .

You'd think an online calculator is a pretty straight forward device, one that you should be able to place your full confidence in, and for the most part they are. Calculators calculate numbers, the numbers are reliable, but how you interpret those numbers... not so much, especially if the goal is mortgage qualification. If you rely on the numbers from a "What can I afford" or "Mortgage Qualification" calculator without talking to a mortgage professional, you are going to be misinformed. Don't be fooled, while an online mortgage calculator can help you calculate mortgage payments, or help you assess how additional payments would impact your amortization, they will never be able to give you an exact picture of what you can actually afford and how a lender will consider your mortgage application. While mortgage calculators are objective, mortgage lending isn't. It's 100% subjective. A lender will consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase, and then compare that with whatever risk profile they currently have the appetite to lend to. Simply put, they don't just look at the numbers. An online calculator is a great tool to help you to run different financial scenarios and to help you assess your comfort level with different payment schedules and mortgage amounts, but please don't rely on an online calculator for mortgage qualification purposes, you will be disappointed. When the time is right, the very first step in the mortgage qualification process is a preapproval. A preapproval will take a look at all the variables on your application, assess your financial situation, and provide you with a framework to buy a property, based on your unique circumstance. Securing a preapproval comes at no cost to you and you aren't obligated to buy. It will simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do. If you would like to talk more about your financial situation, please contact us anytime!

If you've heard about the government recently making changes to the rate they use to stress test mortgages, this is all the information you need to know!

Okay, so here we are... we have worked together to secure financing for your mortgage. You are getting a great rate, favourable terms that meet your mortgage goals, the lender is satisfied with all the supporting documents, we are broker complete, and the only thing left to do is wait for the day the lawyers advance the funds for the mortgage. Here is a list of things you should NEVER do in the time between your financing complete date (when everything is setup and looks good) and your closing date (the day the lender actually advances funds). Never make changes to your financial situation without first consulting me. Changes to your financial situation before your mortgage closes could actually cause your mortgage to be declined. So without delay, here are the 10 Don'ts of Mortgage Closing... inspired by real life situations. 1. Don't quit your job. This might sound obvious, but if you quit your job we will have to report this change in employment status to the lender. From there you will be required to support your mortgage application with your new employment details. Even if you have taken on a new job that pays twice as much in the same industry, there still might be a probationary period and the lender might not feel comfortable with proceeding. If you are thinking of making changes to your employment status... contact me first, it might be alright to proceed, but then again it might just be best to wait until your mortgage closes! Let's talk it out. 2. Don't do anything that would reduce your income. Kinda like point one, don't change your status at your existing employer. Getting a raise is fine, but dropping from Full Time to Part Time status is not a good idea. The reduced income will change your debt services ratios on your application and you might not qualify. 3. Don't apply for new credit. I realize that you are excited to get your new house, especially if this is your first house, however now is not the time to go shopping on credit or take out new credit cards. So if you find yourself at the Brick, shopping for new furniture and they want you to finance your purchase right now... don't. By applying for new credit and taking out new credit, you can jeopardize your mortgage. 4. Don't get rid of existing credit. Okay, in the same way that it's not a good idea to take on new credit, it's best not to close any existing credit either. The lender has agreed to lend you the money for a mortgage based on your current financial situation and this includes the strength of your credit profile. Mortgage lenders and insurers have a minimum credit profile required to lend you money, if you close active accounts, you could fall into an unacceptable credit situation. 5. Don't co-sign for a loan or mortgage for someone else. You may have the best intentions in the world, but if you co-sign for any type of debt for someone else, you are 100% responsible for the full payments incurred on that loan. This extra debt is added to your expenses and may throw your ratios out of line. 6. Don't stop paying your bills. Although this is still good advice for people purchasing homes, it is more often an issue in a refinance situation. If we are just waiting on the proceeds of a refinance in order to consolidate some of your debts, you must continue making your payments as scheduled. If you choose not to make your payments, it will reflect on your credit bureau and it could impact your ability to get your mortgage. Best advice is to continue making all your payments until the refinance has gone through and your balances have been brought to zero. 7. Don't spend your closing costs. Typically the lender wants to see you with 1.5% saved up to cover closing costs... this money is used to cover the expense of closing your mortgage, like paying your lawyer for their services. So you might think that because you shouldn't take out new credit to buy furniture, you can use this money instead. Bad idea. If you don't pay the lawyer... you aren't getting your house, and the furniture will have to be delivered curb side. And it's cold in Canada. You get the picture. However just in case you don't, I included it below.