Question 1

When is the right time to buy a house?

Accepted Answer

How to know the time is rightThe right time to buy is different for everyone. It might not always be when the market is low and interest rates have fallen. It probably is the right time if you – have stable and reliable employment, saved for a down payment, have built good credit, plan on settling into one place for the next few years, and ready to make a big investment.

Question 2

How will child support or spousal support affect my mortgage qualification?

Accepted Answer

Qualifying for a mortgageIf you are paying child or spousal support, that yearly amount will be deducted from your income before we can determine how much mortgage you qualify for.

If you are receiving child or spousal support, we will add the yearly amount to your income to help determine the size of mortgage you qualify for.

Question 3

How long does it take to get a mortgage secured?

Accepted Answer

Securing a mortgageIf you have an accepted offer and you’re ready to secure financing (assuming you have been pre-qualified by your mortgage broker), we recommend a two-week period to remove your subject to financing clause. Your broker will submit your application with all the supporting documents. The lender and (possibly) the insurer will both have to review and sign off on the clients and the property. Sometimes the lender or insurer will request an appraisal be done on the property. This can take a few days to a week to get set up and completed. We try to be an efficient as possible but there are many elements to securing a mortgage that cannot happen in an instant. Plus, having a subject to financing protects to buyer!

Question 4

Should I use a mortgage broker?

Accepted Answer

Use a mortgage broker today!YES! A mortgage broker is a free, individualized service that will make your mortgage progress smoother and less stressful. We do all the hard work for you! If you’re on the fence about using a mortgage broker, check out our google reviews and see what other people had to say.

Question 5

What does GDS and TDS mean?

Accepted Answer

GDS & TDSGDS (gross debt service ratio)
 is a percentage of the household income being allotted for house related funds. Example: mortgage payment, property tax, strata fees, pad rent, and heat. Most lenders have a max GDS of 39% of your household income.

TDS (total debt service ratio) is a percentage of your household income that includes your GDS plus any other liability payments you have. Example: vehicle loans, credit cards, line of credit, child or spousal support ect. Most lender have a max TDS ratio of 44% of the household income.

Question 6

What goes into a pre-qualification?

Accepted Answer

Get Pre-Qualified!Your mortgage broker will start by filling out a mortgage application with you. This includes getting your personal information like birthdate, home address and social insurance number. Next will be getting your employment information, including how long you have worked at your company, whether you earn a salary, hourly, or commission wage. A list of assets and liabilities will be taken, including pulling your credit. Then based on qualifying ratios and interest rate, your broker will be able to give you a mortgage amount you qualify for. All income needs to be verified with tax documents and paystubs. It is important you do not change your financial situation between your qualification and purchasing a home. Anything like car payments, lines of credits, furniture financing will affect your qualifying amount and might inhibit you from getting your dream home. Wait until you have moved in to any big purchases.

Question 7

What is the difference between a Mortgage Broker and a Mortgage Specialist at my bank?

Accepted Answer

Mortgage Broker vs Mortgage SpecialistMortgage Broker

2. 
    In BC, a mortgage broker is licensed under the BCFSA.

4. 
    A Mortgage Broker brokers your mortgage. Meaning we have multiple lenders available to us and can find the best fit for our clients. We work as the link between our clients and the lender.

6. 
    Mortgage Brokers only focus on mortgages. We spend all day everyday immersed in the mortgage world which makes up up-to-date and knowledgeable on all things related to mortgages.

Mortgage Specialist

2. 
    A Mortgage Specialist does not require any formal training or license. Some banks offer in house training.

4. 
    A Mortgage Specialist only has products available to them that their bank offers.

6. 
    Mortgage Specialists are often trained in selling more products than just mortgages. In this scenario, a mortgage specialist might try to sell you on products other than a mortgage to make profit for the bank.

Question 8

What is the difference between a Co-Signer and a Guarantor

Accepted Answer

Co-Signer VS GuarantorWith the current costs of homes, interest rates higher than the last few years, and stringent stress tests, first time buyers are finding it more and more difficult to qualify on their own. We are often asked about co-signers so we thought we would share some info.

A co-signer should be an immediate family member or spouse, be able to contribute to the mortgage payment and will go on title of the property. They sign all the same mortgage documents as the purchaser, and they share equal responsibility for the debt. Being a co-signer can affect further qualifications for other loans and mortgages and the debt will appear on their credit bureau. It’s important to remember that a co-signers income and current debt is taken into consideration.

A guarantor should be an immediate family member or spouse who can provide a guarantee the mortgage debt will be paid. However, they will not be on title of the property and have no ownership in the property. A guarantor won’t be called upon to repay debt unless the mortgagor defaults. Unlike a co-signer, the mortgage debt will not appear on their credit bureau. Not all lenders will allow for a guarantor but instead ask for a co-signer.

Even though there are general guidelines for co-signers and guarantors, each lender will look at the whole deal differently and adjust their requirements depending on the risk.

Question 9

What is the purpose of using a Mortgage Broker?

Accepted Answer

Lets save you money

Why use a Mortgage Broker you ask? Why would you not. More and more Canadians are using a Mortgage Broker to help them secure financing for home purchases, refinances, switches, bridge loans and even reverse mortgages. A broker only does mortgages, so we stay very up to date on the ever-evolving, sometimes stressful market. We watch bond yields, interest rates, lender terms and privileges, and we help you strategize to meet your goals. Often times we can beat the big 5 banks for interest rates, which will save you thousands of dollars over the course of our mortgage term. Using a broker is becoming the new preferred way to secure financing, try it for yourself! It costs you nothing.

Question 10

What does the appraised value of a home mean?

Accepted Answer

Lets Talk Value

An appraised value of a home is determined by an ACC accredited appraiser. The appraiser visits the subject property and makes notes about the property type, house size, building materials, location, views, slope gradience in relation to other sold properties in similar areas. They then come up with a fair market value for the subject property by using one or more appraising methods. The main three methods are 1) Sale comparison approach 2)The cost approach and 3) The income or capitalization approach.

Lenders require appraisals sometimes to confirm the value of the home is not considerable over or under the sale price. Appraisals are used to determine value when a homeowner is refinancing or during a non-arms length transaction. If a lender is concerned about a home’s, integrity an appraisal could also be ordred then.

Reach out to your mortgage broker if you need suggestions on which appraiser to use!

Question 11

Why do I have to use a Notary or a Lawyer?

Accepted Answer

The Logistics

You need to use a Lawyer or Notary because final mortgage documents are legally binding. The lawyer or notary will go over the documents with you, they will witness the signing and they also are the ones to register the new buyers on title with Land Title Office. They are authorized to hold money in-trust for things like your deposit and down payment. They also are responsible for the disbursement of funds from the sale. Lawyers and Notaries are an extremely useful and an important part of your transaction.

BUYING