We have lender relationships for those we can’t place with traditional lenders

Not everyone has a perfect application for an ‘A’ type mortgage product. For example, self-employed individuals with lower taxable earnings or those with a bruised credit history may not fit under ‘A’ criteria.  There are still several lending options available for those who may not be able to secure mortgage financing with a traditional ‘A’ lender.

A great mortgage broker has strong relationships with various alternative lenders to assist in these situations. Slightly higher interest rates and fees are associated with these type of applications. Alternative lending is best positioned as a short-term solution until the clients get their credit back in line or have established the required income needed to qualify with an ‘A’ lender.

Due to the new mortgage underwriting guidelines, private lending has also become more prevalent. Private lending is more expensive than alternative lending in the short term, but it can be a good option for those that don’t fit A or B qualifying criteria. Real estate investors and ‘flippers’ can benefit from these private lending solutions.

To summarize, it is valuable to have an experienced mortgage broker working on behalf of the client as brokers have a broad range of lenders to work with and can offer clients the best combination of service, price and product features available depending on the client’s situation and their future goals.

An experienced, well-informed mortgage broker has access to a wide variety of lenders and mortgage products to suit a client’s needs. Consumers want the best rates available, but the best rate is not always the best product. A knowledgeable mortgage broker will advise and place a client with a lender based on the client’s needs, wants and what is in their best interest.

A well-experienced broker will discuss the following:

• Fixed versus variable. Closed versus open: There are advantages and disadvantages that need to be discussed when deciding the term wanted/required
• Portability: Does the client plan on moving to a new home within the term of the mortgage?
• Pre-Payment Privileges: Flexibility to make additional lump sum payments against the principle and/or increase your monthly payment throughout the term.
• Payout Penalties: Three months interest or an interest rate differential; also known as an IRD. Understanding how the penalty could be calculated if the client discharges the mortgage before the end of the term.
• Interest Compounding: Semi-Annually versus Monthly.
• Structuring A Mortgage: Is a line of credit required along with a fixed term or are multiple fixed/variable terms required/wanted.
• Mortgage Insurance: “Insurability” impacts the rate and option to transfer a mortgage
• Insurer Programs. There are various Insurer programs available. Borrowed down payment (conditions apply), purchase-plus-improvements, Green Home Program, etc.

A trusted Mortgage Advisor will work and guide a client through their mortgage options and place them with a lender and mortgage product that best suits their needs.

A Mortgage Professional represents the client and ensures the mortgage secured best suits their needs.

A good mortgage broker is a savvy negotiator. Mortgage brokers are independent, trained professionals licensed to represent and provide the best advice for the clients’ mortgage needs. Mortgage brokers know where the best rates can be found, and we represent the client to negotiate the best terms, conditions and rates.

Mortgage brokers represent the customer, not the lender. Because we are not employees of a lending institution, brokers are not limited to one specific product. Instead, we seek out the best lender package to suit the client’s specific situation, whether it’s with a Chartered Bank, Trust or Insurance Company or Private Funds.  There is a wide assortment of options and features available to homebuyers today and shopping around takes a lot of time and effort. Given the new government rules that were implemented on January 1, 2018, the mortgage process can be intimidating. It pays to work with a mortgage professional who will represent the client and negotiate on their behalf to ensure the mortgage is the best option for them. Choosing the wrong mortgage option can cost thousands of extra dollars. Mortgage brokers are trained professionals who can help save the client’s money.

Obtaining Mortgage Approval to its Fullest Potential.

With the recent waves of government mortgage rule changes, home buyers/homeowners are feeling disappointed that they have been declined or not approved by their lending institution for the financing they would like or feel they can reasonably afford. Today’s consumer does not fully understand that mortgages are no longer “cookie-cutter” and “fit in the box” for an easy, straightforward approval. It now takes a knowledgeable, well-experienced broker to manoeuvre a mortgage application. You must consider the following when applying for mortgage financing, and not all lenders have the same lending guidelines. For example:

• Qualifying Ratios: Each lender has different maximum values they consider when qualifying for the mortgage financing. The government has set “debt ratios” (called GDS & TDS) for the lenders to follow but not all lenders use the guidelines to their full potential. This means each individual lender chooses a particular amount that they will allow for the new mortgage and associated costs along with individual allowable maximums for debt, such as credit cards, loan payments, lines of credit, child support and Alimony payments, etc.
• Default Insurers: For purchases with less than 20% down payment, default (mortgage) insurance is subject to the approval of an application. In Canada, there are three mortgage insurers, and not all lenders use all three insurers
• Qualification Criteria: Knowing how a lender will qualify income sources or liabilities (self-employed, pensions, child/spousal support paid or received, vehicle payments, etc. commission, bonus, etc.) is crucial. The way these are calculated varies from lender to lender and can drastically impact the debt servicing ratios, and therefore your buying power.
• Supporting Documentation: Required paperwork for a mortgage approval can be tedious. A good mortgage broker will help streamline the paperwork required to obtain your maximum buying potential. Every lender has different documentation requirements, and it is essential to know which lenders want what paperwork, especially with the various programs for those who are self-employed.
• Legal Closing Criteria: Before the advancement of a mortgage, a lawyer will advise what pertinent documentation and funds are required to close. If there are any lender “requirements” (example: property taxes, condominium documents, file specific affidavits, etc.) that could potentially hinder a “timely” closing, an experienced mortgage broker will have insight into the requirements in advance and help “pave the way” for a smooth and “timely” closing.

A good, experienced, and knowledgeable mortgage broker considers all the above and much more when completing a mortgage application. We work for you to obtain the best mortgage options available, with as little stress as possible.