Chapter 1 – Broker vs Bank

Here is a 90 second video that explains the main differences between a broker and a bank:   Before I really knew about the mortgage industry, I assumed that brokers made their livings in one of three ways: charging a fee, increasing a lender’s rate, or using a small lender with high rates for the … Read more

Chapter 3 – The Main People Involved

When buying a home or other property, you’ll have to rely on a range of professionals to guide you through the process.  For first time home buyers in particular, it helps to be acquainted with these specialists and their roles.   Mortgage Broker – A mortgage expert who introduces buyers to a full range of mortgage … Read more

Chapter 4 – Mortgage Types

One of the most important pieces of information to know is your down payment percentage. This will determine whether your mortgage is conventional or hi-ratio, and both have different rules that will affect how much you can borrow.   HIGH-RATIO MORTGAGE If you have under 20% of the purchase price as your down payment, your … Read more

Chapter 5 – Term vs Amortization

It’s quite common for borrowers to confuse amortization and term. Amortization is the number of years it takes to pay off your entire mortgage. Term is the length of your contract. When your term is up, you can change your mortgage amount, amortization, and interest rate. Choosing a longer amortization reduces your monthly payment and … Read more

Chapter 6 – Variable vs Fixed

One of the questions I get asked frequently is whether to choose a fixed product or a variable product.  Which route to take ultimately depends on your preferences. Here are some things to look at when making your decision: 1. Fixed payments vs Fluctuating payments There is a certain premium that you pay to have … Read more

Chapter 7 – Pre Approvals

Before beginning the bidding war on a potential property, it helps to have an indication of how much you can afford.  Some home buyers don’t fully understand pre-approvals. Even if you obtain a pre-approval, it does not guarantee you will qualify for the financing. The main benefit of a pre-approval is that it will give … Read more

Chapter 8 – Qualifying

Several factors come in to play when a lender is deciding how much you qualify for.   Credit Lenders want to see that you have a good history of paying your bills.   Gross Debt Service Ratio (GDS) Gross debt service ratio is the percentage of your income that is going towards your home payments … Read more

Chapter 9 – Improving Credit

The majority of Canadian citizens have a credit score.  Scores can range from 300 to 900.  Anything above 680 is considered good credit and you can usually receive a full range of borrowing options.  Once you get below 600, your options will become more limited.   Your score is composed of a few different elements … Read more

Chapter 10 – Common Required Documents

Although you don’t need to provide documents during the pre-approval process, you will eventually need to confirm the information on your application. The exact documents required vary from lender to lender, but there are a few that you can expect to provide each time.   Mortgage Commitment: The mortgage commitment is the contract that the … Read more